Over 1,200 Singapore employers penalised as income filing breaches cross S$1 million

More than 1,200 employers in Singapore were prosecuted last year for repeated failures to submit employee income information on time, with penalties imposed by the Inland Revenue Authority of Singapore (IRAS) exceeding S$1 million.

The enforcement action follows widespread non-compliance under Singapore’s Auto-Inclusion Scheme (AIS), a system designed to simplify tax filing by requiring employers to transmit employee earnings directly to IRAS.

According to the tax authority, over 12,000 AIS employers missed the filing deadline in 2025, resulting in inaccurate or delayed tax assessments for more than 160,000 employees. Of these, 1,207 employers were identified as repeat offenders and prosecuted, marking one of the largest enforcement exercises linked to employment income reporting in recent years.

“These repeat offenders would have received multiple letters, emails and/or calls from IRAS to remind them of their filing obligations,” IRAS said in a media release. “The majority of these employers are in the food and beverage, wholesale trade, and construction industries.”

Compliance gaps despite broad AIS coverage

The AIS now covers a significant portion of Singapore’s workforce. A total of 123,000 employers are enrolled in the scheme, enabling over two million employees to benefit from pre-filled tax returns, the No-Filing Service (NFS), or Direct Notice of Assessment (D-NOA) for the Year of Assessment 2026.

Under the scheme, employers must electronically submit their employees’ 2025 employment income information by 1 March 2026, ahead of the annual tax filing season. The requirement applies regardless of company size, including firms with fewer than five employees, as well as employers that crossed the five-employee threshold during 2025.

IRAS said more than 11,000 new employers joined the AIS this year and will be submitting employee income data for the first time, following notification letters issued in January 2026.

Despite the scheme’s scale and maturity, the authority noted that non-compliance remains a persistent issue, creating downstream problems for employees whose tax assessments depend on timely and accurate employer submissions.

“Employers who fail to file on time commit an offence and cause significant inconvenience to their employees due to missing employment income information,” IRAS said.

Fines, personal liability and jail terms

IRAS warned that enforcement will remain strict. Employers that fail to submit income data by the deadline can be fined up to S$5,000 under Section 94(1) of the Income Tax Act 1947.

In addition, key personnel, including company directors and precedent partners, may face fines of up to S$10,000 and/or imprisonment of up to 12 months if they fail to respond to IRAS notices.

The tax authority said the penalties imposed in 2025 reflected repeated non-compliance rather than first-time lapses, underscoring its focus on habitual offenders.

Common reporting errors flagged

Beyond missed deadlines, IRAS highlighted recurring inaccuracies in income submissions, which it said could lead to undercharged taxes and further penalties.

Common errors include the omission of taxable benefits-in-kind, failure to declare income or benefits provided outside payroll systems, incorrect reporting of accommodation benefits, and under-reporting of stock option gains.

Submitting inaccurate information is itself an offence, IRAS said, and may result in penalties of up to double the amount of tax undercharged.

To encourage corrective action, the authority urged employers to proactively disclose past errors under its Voluntary Disclosure Programme, which allows for reduced penalties where disclosures are made promptly.

As IRAS expands digital enhancements to the AIS, including extended back-year filing of up to four years and easier amendments to submitted data, the authority signalled that convenience will be matched by continued enforcement.

“The AIS brings significant benefits to both employers and employees,” IRAS said. “But those benefits depend on timely, complete and accurate reporting.”