IRAS – Tax Clearance (IR 21) for Non-Singapore Citizen Employees
When a non-Singapore Citizen employee ceases employment, goes on an overseas posting, or plans to leave Singapore for more than three months, employers must notify IRAS at least one month in advance and withhold all monies due to the employee from the date of awareness. This process is known as tax clearance and applies to all work pass holders as well.
When is Tax Clearance Not Required:
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- Worked ≤ 60 days in a year (except directors/public entertainers/professionals).
- Worked ≥ 183 days in a year and earned < $21,000.
- Worked ≥ 183 days over two years and earned < $21,000.
- Worked ≥ 3 continuous years and earned < $21,000.
For these scenarios, no Form IR21 is needed, but income must be reported via Form IR8A or AIS by 1st Mar of the following year.
When to File the Form IR21:
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- Employee ceases employment.
- Employee starts an overseas posting.
- Employee leaves Singapore for > 3 months.
Steps for IR21 Tax Clearance:
Additional Income:
Non-Compliance:
Ensuring compliance with the IR21 tax clearance process is crucial for both employers and employees. Timely filing, accurate reporting, and adherence to the guidelines help avoid penalties and ensure a smooth transition for employees leaving Singapore.
