What is a Benefit-in-kind?
A benefit-in-kind (BIK) is any non-cash benefit of monetary value that you provide for your employee.
Generally, all gains and profits derived by an employee during his time of employment with a company are taxable, unless they are specifically exempt from income tax or are covered by an existing administrative concession.
You can refer to these links below to learn more about the tax treatment required for the BIK pay items awarded to your employees from the IRAS website:
- Tax Treatment of Employee Remuneration (Link here)
- List of Benefits-in-Kind Granted Administrative Concession or Exempt from Income Tax (Link here)
Processing BIK to automatically reflect in Appendix 8A in Talenox
If you would like for your BIK pay items to reflect in Appendix 8A generated by Talenox, you can follow the steps below to process BIK pay items as part of payroll for your employees:
1) Firstly, you'll have to create your own tag for Appendix 8A items, by clicking on "Manage Pay Item Tags".
2) Select the "Add New Tag" option and key in the Name of the BIK you are trying to map over to Appendix 8A. The selected Mapping Field ensures that your BIK item is mapped to the correct section in Appendix 8A, when keyed into payroll.
3) After creating your own tags, you can now key in your "Benefits in Kind" pay item under the Ad Hoc Payment/Deduction tab in payroll:
4) Next, key in the Amount and Remarks for your BIK pay item.
Description keyed into the Remarks section should correspond with the name of the tag you have created previously in Step 1. This ensures that the correct pay item tag will be included for this BIK. Once you have tagged the Benefits-in-Kind to the right field, it'll reflect in the correct section in Appendix 8A.
For items like Gifts, an employee should not reimbursed in payroll for the item received. Therefore, there is one extra step needed before you can fully process payroll for your employee for the month.
5) Key in a "Deduction (from Net salary)(no SHG)" pay item to remove the amount from payroll for the employee. Please do remember to key in any Remarks as well 👍🏻
After processing all your BIK pay items for your employees for each payroll month, you might be trying to generate your Appendix 8A submission for the financial year.
You can refer to this guide for a step-by-step run through of how to do so! 😄