A Comprehensive Guide to Monthly Income Tax Payments on CardUp:
If you're considering using CardUp for your monthly income tax payments, it's crucial to understand the specific requirements and considerations to ensure a seamless process. Here's a comprehensive guide to setting up monthly income tax payments on CardUp:
Important Considerations for Setting Up Monthly Income Tax Payments on CardUp:
Mandatory Requirement of GIRO:
It's essential to have GIRO set up for your income tax payments. Even if you schedule payments through CardUp, GIRO should not be terminated. IRAS mandates this to avoid the need for full settlement in case of termination.
Limitation to 11 Months Payment on CardUp:
CardUp pays in advance. You can only set up 11 months of payments on CardUp, not 12. The reason for this is that the first payment of each new tax cycle should be deducted through GIRO, as mandated by IRAS. This ensures that your GIRO remains active and valid.
Advance Payment:
When you set up your income tax payment with CardUp, it functions as an advance payment method. This means that you're paying your taxes ahead of time using your credit card, which offers additional benefits such as earning rewards points or cashback.
Selecting Payment Dates on CardUp:
Due to IRAS's notification to banks for GIRO deduction and the processing time for updating account statements, you can only select the 2nd and 3rd week of each month as the payment due date on CardUp. The 1st and last week of each month are typically blocked due to this purpose.
Dual Payments in the First Month of Tax Payment:
In the first month of tax payment, two payments will be recorded on your statement of account: one for the GIRO deduction (current month's tax due) and one for the payment through CardUp (next month's tax due).
Payment Process and Timeline:
Payments made through CardUp are transferred directly to IRAS's bank account. It takes IRAS 3-5 business days to update your statement of account, reflecting the payment as an "e-payment" or "electronic payment".
Visualising the Payment Schedule:
To visualise the payment schedule and understand the timeline of payments through CardUp, consider the following example:
| Method | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 |
| GIRO | Will always happen | No Giro, pulled from CardUp Month 1 | No Giro, pulled from CardUp Month 2 | No Giro, pulled from CardUp Month 3 | No Giro, pulled from CardUp Month 4 | No Giro, pulled from CardUp Month 5 | No Giro, pulled from CardUp Month 6 | No Giro, pulled from CardUp Month 7 | No Giro, pulled from CardUp Month 8 | No Giro, pulled from CardUp Month 9 | No Giro, pulled from CardUp Month 10 | No Giro, pulled from CardUp Month 11 |
| CARDUP | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | NO deduction as payment settled |
Start Date: May 2024
- GIRO deduction: Meant for May tax due
- CardUp payment: Meant for June tax due
June 2024 onwards:
- Only CardUp payment (GIRO no longer experiences deduction): Meant for July 2024 tax due and so forth.
End Date: March 2025
- Last payment due on CardUp for April 2025 tax due
- Note: There's no further requirement to make a tax settlement in April 2025 as everything has been paid in advance.
By understanding these details and visualising the payment schedule, you can effectively navigate the process of setting up monthly income tax payments on CardUp, ensuring compliance with IRAS requirements and a clear understanding of the payment timeline.
With this comprehensive understanding, you can confidently leverage CardUp for your monthly income tax payments, knowing the intricacies of the process and the expected outcomes.