How to prepare IR56M

*** Only the format of IR56M in HRPro 17.06 or above have sought approval from the Inland Revenue Department (according to Sep 2019 Specifications) ***

Hong Kong companies are required to submit Form IR56B reporting employees’ remuneration, but for payment of non-employees for its services, it has to furnish IR56M for such kind of remuneration.

For Hong Kong companies, other than those remuneration paid to employees, there are, such as:-

  • Subcontractors

  • Consultant

  • Agent

  • Brokerage

  • Contributing artists, entertainers, athletes, writers

These people do not belong to employees and they should submit IR56M.

This section provides an overview of IR56M: Notification of Remuneration Paid to Persons Other Than Employees

  1. Define your Tax File No., Name and Designation in Taxation Module Setup

  2. Define whether you wish to ignore the $25,000 Income Limit in Taxation Module Setup

  3. Define the pay type(s), especially for IR56M in Payroll Module Setup, Pay Type Tab.

  4. Define the IRD Category (NE) in Pay Type Table when Pay Type Table is turned on.

The IRD Category (NE) is to select which category the pay item belongs to in the IR forms for Non-employee (IR56M).

3. Define the Non-Employee for IR56M in Employee Master, Inland Revenue tab.

4. Generate IR56M Batch (make sure the April to March batches that contain the Incomes for the Non-Employees are all posted)

5. Print the IR56M checklist.

6. Print Taxable Income Report by IRD Category or Taxable Income Report by Pay Type and distribute to persons other than employees.

7. Export, manipulate and import back to IR56M Batch (if any, Web Client Only).

8. Perform IR56M Amendment (if any).

9. Output IR56M Data File and the Control List, send the disk together with the control list.

10. Print IR56M forms in IR56M Amendment (for all employees) and distribute to the Persons Other Than Employees, see also IR56M Sample Output.

11. If you have multiple employers per database, go to Step 4 and select another employer to generate a different IR56M batch.

12. When the whole cycle is completed, click the Post button on the IR56M Amendment toolbar to protect (closed) this taxation year.