Many employees receive the EA Form from their employers in March, allowing them to begin completing their personal income tax returns.
The CP8A form (EA form) is the annual employer must prepare for the employee’s salary list, listing the employee’s past year taxable and tax-free income or benefits, monthly withholding tax (PCB), employee provident fund, and other numbers, for the salaried persons tax purposes.
From A through G, there are seven categories in EA forms.
It’s vital to remember that the income entered in sections B and C is taxable, and the total is the amount that the employee must put in the BE form’s “B1” (statutory employment income) field.
To avoid an inaccurate tax return, the employee should double-check that the amount of taxable income in these two categories on the EA form is right and that there is no over- or under-addition.
Seven categories of EA forms:
Part A: Employee Information
Employers will fill in this part with information about their employees, such as their name, position, employee number, ID card number, and employee provident fund number.
Part B: Employment Income, Benefits, and Housing (Excluding tax-free allowances, additional cash rewards (Perquisites), gifts, and benefits)
Only the four types of income stated are normally reported in item 1 if the remuneration package is reasonably straightforward and the employer does not provide major benefits such as a car or housing.
If the deal includes material benefits, the employer must use the Tax calculation to determine their worth. If the employee is unsure about the amount, he or she should consult with the employer.
Part C: Other Benefits and Pensions
This column will show the employee’s pension as well as any annuities or other monthly payments.
Part D: Total Deductions
1. monthly withholding tax paid to the tax office this year
2. CP 38 deductions (the tax office sends a “payroll deduction order” to a taxpayer’s employer, demanding that unpaid income tax be deducted directly from the employee’s salary; the total amount deducted is displayed here.)
3. Islamic Assistance (also known as Zakat)
Part E: Total contributions to approved pensions, provident funds, funds, or organisations.
This column will indicate the name of the relevant provident fund, usually the Employees’ Provident Fund; and the total amount paid by the employee. The employer’s portion does not need to be indicated here.
Part F: Arrears payments and other payment information from prior years
The payment must be stated in this column if an employee is not paid employment income in the current year and the payment is received in the tax year in which the tax return is filed, according to the Inland Revenue Department. If a payment was intended to be received in 2014 but instead arrived in 2015, the payment should be recorded on the EA form for the 2015 tax year.
Part G: Total tax-free allowances/additional cash awards/gifts/benefits
This column must include the entire amount of the eight tax-free allowances, additional cash awards, gifts, and benefits awarded by the company to the employee during the previous year.
This tax-free allowance is distinct from Part B employment income, and it cannot be used more than once. Because it is marked as tax-exempt, the employee does not need to include it on Form BE when filing taxes.
