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Company helps employees to file tax returns】A clear understanding of the difference between employer's tax return BIR56A and IR56B
It is the statutory responsibility of employers to file tax returns for their employees. They are required to submit the BIR56A Summary Table and IR56B Individual Remuneration Report on time, covering any employees with remuneration income, to avoid late penalties and legal risks and to ensure tax compliance.
Summary of key points
What is an employer tax return?
The Employer's Return is a mandatory document for employers in Hong Kong to report to the Inland Revenue Department (IRD) every year on the salaries and pensions of their employees.
Employer's tax return including BIR56A and IR56B
Once the tax season arrives every year, apart from the profits tax In addition, the company will receive an Employer's Tax Return from the Inland Revenue Department (IRD), which consists of two common forms: BIR56A and IR56B.
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- BIR56A: The concept of a master schedule allows companies to file a uniform return on what employees are subject to tax
- IR56B: Detailed income report for each employee, including their salary, allowances, etc. for the year
Employers are required to make timely returns
The Inland Revenue Department (IRD) requires completion and return within one month from the date of receipt, and you may choose to submit the form in paper form or by using the [ ] option. Tax Ease (eTAX) ] Submit e-forms on the One-Stop Tax Payment website.
When will I receive my employer's tax return? What should I do if I don't receive it?
Normally, a company will receive a tax return from the Inland Revenue Department (IRD) in the first week of April each year. The IRD will send out the documents according to the registered address of the company, so as long as there is no change in the address of the company, it will not be missed in general.
However, in case you really haven't received it by mid-April, you can call IRD to enquire about it, fill in the application form, or log on to eTax to check it directly.
What will happen if I am late in filing my employer's tax return?
Under the Inland Revenue Ordinance, a company that fails to submit BIR56A and IR56B by the deadline may be fined.
What is more troublesome is that once a company has a record of late payment, the Inland Revenue Department (IRD) may be more stringent in scrutinising the company in the future, and the tax risk will be relatively higher.
By submitting your tax return on time, you are not only complying with the law, but also avoiding unnecessary troubles in the future.
Does every company need to submit an employer's tax return?
That's right! As long as you are a legally established company in Hong Kong, you are required to file an Employer's Tax Return regardless of the size of your company.
Provisions relating to the Inland Revenue Ordinance
Under sections 49 and 52 of the Inland Revenue Ordinance, every employer with employees in Hong Kong must file returns on employee remuneration within the time required by the Inland Revenue Department.
All employees (including part-time employees, posted and seconded employees, retired employees)
Many people assume only full-time staff need to be included in IR56B — not so! Any employee who received remuneration from the company during the year of assessment must be reported.
This includes:
- Part-time employees (e.g. those who work only 2-3 days a week)
- Staff seconded/deployed from other departments or companies (even if the main employing unit is not our company)
- Former employees who have retired but are still in receipt of pension or consultancy payments
company director
Even without a formal employment contract, a director who receives pay is treated as an employee for tax purposes and must be reported to the IRD. Directors' remuneration carries the same tax obligations as ordinary staff — their status is no reason to skip the return.
Beneficiary shareholders
A beneficial owner is usually someone who is not named as a director or officer but actually holds shares in the company and shares in profits or decisions. If they receive salary, bonuses, consultancy fees or other remuneration from the company, an IR56B must be filed.
Do companies without employees have to file tax returns?
If the company employed no staff at all during the year of assessment, it can tell the IRD it has no employees — but this must still be formally reported on form BIR56A.
That is to say, the Even if you don't need to submit IR56B If you are a taxpayer, you will still need to return the BIR56A and mark "No taxpayer required" on the form.
What you need to know to file a tax return! Employer Tax Liability at a Glance
Tax liabilities include in-service, out-of-service and out-of-hong Kong situations. The following are the forms that need to be submitted according to each situation:
| tabular | use | Deadline for submission |
|---|---|---|
| BIR56A / IR56B | Annual remuneration declaration | 1 month after issue |
| IR56E | New staff declaration | 3 months after joining |
| IR56F | Imminent Departure Declaration | 1 month prior to departure |
| IR56G | Declaration of Absence from Hong Kong (Subject to Payroll Deduction) | 1 month before departure |
| IR6036A / IR56M | Declaration of Expenditure on Outsourced Labour/Commission | Submitted at the same time as BIR56A |
What is the difference between IR56B and BIR56A? Both should be submitted!
Although IR56B and BIR56A often appear together, they actually have different functions. IR56B reports the payroll information of each employee individually, while BIR56A reports the payroll of individual employees and is responsible for the consolidation of the company's master list of employees who are liable to file tax returns.
IR56B Teaching and Learning
IR56B is an individual form filed for each employee, reporting their salary, allowances, bonuses and other income for the year. It is usually filed once a year, and may also be filed separately when an employee leaves the company or Hong Kong.
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Documents required for IR56B
Prepare the basic information of your staff before filling in the form:
- Staff Information
- Marital Status and Spouse Information
- Employment
- Duration of Employment
- Total payroll
- Other Information
- Information on Housing Subsidies
Guide to Filing IR56B
Fill in every field accurately — especially the employment period, total income and holiday pay — so the figures match your internal payroll records.
The Inland Revenue Department (IRD) has also provided information on how to fill in the form. IR56B Demo Reference.
Who can sign the IR56B form?
Form IR56B is usually signed and filed by the company's responsible person, authorised finance or human resources department.
BIR56A Teaching and Learning
BIR56A is usually issued by the Inland Revenue Department on its own initiative. If you do not receive it, you can make use of the "BIR56A" function. Request for employer's tax return on salaries and pensions "You can also call the IRD for more information or log on to eTax to view the application directly.
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Information required for BIR56A
- Company Address and Contact Information
- Number of staff (total number of staff to be reported for IR56B)
- Name, position and date of signatory
- Attachment List of IR56B Forms
Guide to Filing BIR56A
Confirm that each employee with earnings is listed on the IR56B form and then sign the BIR56A and file it with the IR56B.
The Inland Revenue Department (IRD) has also provided information on how to fill in the form. BIR56A Model Reference.
What should I be aware of when filing tax returns for my employees?
Common Mistakes
Even experienced HR or employers may accidentally step on mines when handling tax returns, such as the following seven situations, which many people mistakenly think that there is no need to file a return:
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- The Company has no employees
- No actual operation of the company
- The Company recorded a loss
- Company closure in progress
- Remuneration to persons other than employees
- Remuneration of directors as directors, not as employees
- Employees are part-time in nature
All of the above situations still require filing. These mistakes may look minor, but if repeated year after year the IRD may consider the company non-compliant, which can affect future tax reviews.
Points of Attention
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- BIR56A form must be completed and returned within one month of issue.
- Must maintain at least 7 years of employee payroll details
- Personal data and total remuneration should be checked with the staff before submission.
- Retain 2 copies of Form IR56B (one copy to be used as a voucher for the company's employee tax return expenses and the other copy to be issued to the employee for work records and personal tax filing purposes).
- Even if the employee has left the company, he is still required to file an employee tax return and send a copy of the IR56B form to his address.
What will happen if the company does not help employees to file tax returns? Both the employer and the employee are in trouble!
employers
When a company fails to file tax returns for its employees, there are two scenarios: if the Inland Revenue Department (IRD) determines that the failure to file is due to negligence, it may be subject to a fixed penalty; but if the IRD determines that the failure is deliberate, it is possible that criminal liability may be involved.
employee
If the company does not report an employee, the IRD may not know they have income. If the employee also does not report it, neither side has filed — and once discovered, it is treated as tax evasion!
The employee will have to file late, pay the back tax and a penalty. Future loans, immigration applications and credit records may all be affected.
How to file your employer's tax return, 3 ways to find out!
Paper Submission
The traditional way: after the IRD posts the forms, the company completes them and returns them by mail. For small companies with few staff and no electronic system, paper filing is the simplest option.
Allow enough time for postage — late filing is still penalised.
Submit Online
Complete and upload the forms online via eTAX. No printing, signing or posting, and you get instant confirmation of submission. Suitable for most SMEs.
Integrated Mode
Employers do not need to use an authorised signatory's TaxSmart or SmartEase+ account to assign any employee or agent to generate the data file through the following tools:
- IR56B Form Preparation Tool: Free software provided by the Inland Revenue Department for completing employer tax returns
- Customised software approved by the Inland Revenue Department (IRD): Programmes designed by the employer and approved by IRD
After uploading the information file to the employer's electronic tax filing service platform, the system will generate a text checklist (cover page), which can be mailed to the Inland Revenue Department to complete the return after the person in charge or agent has signed the form by hand.
Employer's Tax Return Frequently Asked Questions
How long do I have to keep the data records?
Under the Inland Revenue Ordinance, companies are required to retain information relating to tax returns for at least seven years, including payroll records, copies of tax returns, payroll vouchers, and so on.
Can an employer's tax return be deferred?
Yes! However, you must apply to the Inland Revenue Department (IRD) for an extension of time before the deadline and state the reasons for the extension. If you fail to apply and submit the form late, it will be regarded as an offence and you will be fined.
Can I change the wrong information after submitting?
Yes! If an error is found, you should submit a corrected form (e.g. a revised version of IR56B) to the Inland Revenue Department (IRD) as soon as possible, instead of just making random verbal changes or supplementing the letter with explanatory notes.
Do I need to file an employer's tax return for the expenses of outsourced workers?
Required! When a company has paid remuneration to an informal employee, e.g. freelancer/self-employed person, outsourced contractor, etc., during a tax year, a separate return called IR56M is required to be filed.
This form is used to report to the Inland Revenue Department (IRD) income from commissions, consultancy fees, one-off remuneration, etc. paid by the company to non-employees, and is different from the IR56B used by employees in general.
In principle, any person who does not have a formal employment relationship with the company, but provides services and receives remuneration, is covered by the IR56M.
Can only the person in charge of the company sign the employer's tax return?
Not necessarily, as long as the accountant or executive is authorised to sign the statement, he or she can sign it, but it is necessary to ensure that the signatory has substantive understanding and authorisation of the contents.
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Hong Kong Professional Tax Returns Agent Service: Longford Business Consultants
Filing returns for employees looks like simple paperwork, but it involves classifying staff, matching the right forms and tracking deadlines. For many SMEs, one wrong IR56B or a forgotten IR56M can lead to IRD follow-up or even penalties!
Long Peak Business Consultants provides professional tax filing services in Hong Kong, familiar with the corporate tax filing process, and can assist with matters related to the Employer's Tax Return, self-employed tax filing, and other tax-related issues. Whether you are just starting a business or need a systematic tax filing process for your company, you can contact Long Peak for professional accountant support that is reliable and time-saving.