Tax clearance
before your employee leaves
Foreign Employees · PRs · Work Pass Holders
When a foreign staff member resigns, gets posted overseas, or leaves Singapore for more than three months, you must file Form IR21 and withhold their final pay until IRAS grants clearance. Miss the window and payroll — and compliance — both stall.
Tax Clearance · IR21
- File by: 1 month before cessation of employment
- E-filing processing: Typically 7 working days
- Paper filing processing: Typically 21 days
- Clearance Directive: Within 3 working days after processing
- Outcome: Pay tax / release monies
- 1 month Filed before departure
- 7 days E-file turnaround
- 6 Exemption categories
- 2 Filing options
- 2 Directive outcomes
Overview
An employer obligation, not an employee one
Unlike annual filings like Form IR8A, IR21 isn’t a yearly requirement — it’s triggered by an event. When a non-citizen employee’s working relationship with Singapore changes in a defined way, the employer — not the employee — must notify IRAS and get tax clearance before releasing the employee’s final pay.
When tax clearance is triggered
- The employee stops working for you in Singapore (resignation, termination, contract end)
- The employee is assigned to an overseas posting
- The employee will be absent from Singapore for more than three months
Employer's withholding obligation
As soon as you, the employer, become aware that an employee’s cessation, departure, or extended absence is impending, you must begin withholding all monies otherwise due to them — salary, bonuses, unused leave pay, commissions, and other payments. This obligation starts at the point of awareness, not only once Form IR21 has been filed or a Clearance Directive received. Monies stay withheld until IRAS issues its Clearance Directive telling you whether to pay tax from the withheld sum or release it to the employee.
- Confirm the trigger and check exemptions — We assess whether the departure genuinely requires clearance, and under which of the trigger categories.
- Begin withholding immediately — As soon as the impending cessation or departure is known, before the form is even filed.
- File at least 1 month before the employee ceases employment — Via myTax Portal (CorpPass) for e-filing, or by mailing a completed paper form to Inland Revenue Authority of Singapore, 55 Newton Road, Singapore 307987.
- Declare the employee’s year-to-date earnings — Including salary, bonuses, gratuities, reimbursements, allowances, unused leave pay and overtime.
- Await processing — E-filed IR21s are typically processed within 7 working days; paper filings within around 21 days.
Within 3 working days of processing, IRAS issues a Clearance Directive via myTax Portal, followed by post within 5–7 business days. It will be one of two outcomes:
- Outcome A — Directive to Pay Tax: You remit the stated amount to IRAS within 10 days, from the monies withheld.
- Outcome B — Notification to Release Monies: You’re cleared to pay the withheld amount to the employee — no tax is owing.
- Singapore citizens — Never require IR21 tax clearance.
- SPRs staying in Singapore — Permanent Residents who quit but aren’t leaving Singapore permanently.
- Long-serving, lower-income non-citizens — Worked in Singapore 3+ years, earning under $21,000/year.
- Short-term, lower-income non-citizens — Worked 183+ days over the prior two years, or 183+ days in a calendar year, earning under $21,000/year.
- Very short-term workers — Non-citizens who worked 60 days or fewer in a calendar year — excluding directors, public performers and professional advisors.
- Short overseas postings — Posted abroad 6 months or less, keeping a valid pass with the same employer, and still paid by the Singapore entity throughout.
Why HeySara
Tax filing that doesn't rely on you remembering a date
ACRA-registered agents
Deadline reminders, not surprises
One team, full picture
Straightforward pricing
Employee leaving soon?
Tell us their pass type and departure date — we’ll confirm if IR21 applies and file it on time.
FAQs
Yes — the obligation applies across work pass types, including the Personalised Employment Pass, unless the employee falls into one of the exempt categories.
