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. This is because 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 cash-back.
Available Due Date Selection on CardUp
1. Due to the administrative period for IRAS to validate your bank GIRO deduction and update your Tax account statements, you can only select the 2nd and 3rd week of each month as the payment due date on CardUp. The first and last week of the month are blocked due to this purpose.
2. For the below reasons, the available start due date selection for recurring income tax begins 7th May
Source: IRAS - "Generally, most taxpayers should receive their tax bills, also known as Notice of Assessment (NOA), from the end of Apr 2025 to end Sep 2025"
Source: IRAS - "For monthly deductions, they are on every 6th of the month and a provisional instalment plan will begin May each year."
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
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 made through CardUp (next month's tax due).
The following example may help you visualise the payment schedule and understand the timeline of payments through CardUp:
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 | Giro deduction will take place | No Giro deduction, pulled from CardUp Month 1 | No Giro deduction, pulled from CardUp Month 2 | No Giro deduction, pulled from CardUp Month 3 | No Giro deduction, pulled from CardUp Month 4 | No Giro deduction, pulled from CardUp Month 5 | No Giro deduction, pulled from CardUp Month 6 | No Giro deduction, pulled from CardUp Month 7 | No Giro deduction, pulled from CardUp Month 8 | No Giro deduction, pulled from CardUp Month 9 | No Giro deduction, pulled from CardUp Month 10 | No Giro deduction, pulled from CardUp Month 11 |
CARDUP | Payment Charged | Payment Charged | Payment Charged | Payment Charged | Payment Charged | Payment Charged | Payment Charged | Payment Charged | Payment Charged | Payment Charged | Payment Charged | NO deduction as payment settled |
For example, if your GIRO start date is May, you can expect
In May
GIRO deduction: Meant for May tax due
CardUp payment: Meant for June tax due
Please keep in mind that for the May tax statement, you will see two payments made to IRAS. One will be a GIRO deduction for May's tax due, and the other will be through CardUp for the June's tax due.
June onwards:
GIRO no longer deduct. Only CardUp payments meant for July tax due and so forth will take place
The last due date will be in March of the following year
As an advance payment, this pays off the last instalment due in April of the following year
Note: There's no further requirement to make a tax settlement in April next year 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.