When a non-citizen employee leaves your company, or goes on an overseas posting, you may have to file Form IR21 with IRAS and hold back what you owe them until IRAS clears it. We prepare and file the IR21, manage the withholding, and handle the release once IRAS issues its directive.
Last reviewed 1 October 2026.
At a glance
| Question | Answer |
|---|---|
| Who it covers | Non-citizen employees, including foreign employees and PRs, who cease employment in Singapore or go on an overseas posting |
| When to file | At least one month before the employee’s last day, with a 10-day grace period for filing obligations |
| What you do with their pay | Withhold all monies due from the day the employee tells you they are leaving, or the day you tell them of termination or an overseas posting |
| Who is not covered | Singapore Citizens. Some other cases are exempt, and IRAS’s Tax Clearance Calculator tells you which |
| If you can’t give a month’s notice | State the reason on the form; IRAS generally accepts valid ones, such as an immediate resignation |
| Where | Filed through IRAS’s digital services (Form IR21) |
Do you need to file?
IRAS’s calculator is the test. In summary:
- Non-citizens leaving Singapore employment, going on an overseas posting, or leaving Singapore for more than three months fall within the process, and IRAS says it applies to work pass holders.
- PRs are covered when they are leaving Singapore permanently, or going on an overseas posting.
- Singapore Citizens do not need tax clearance.
- Some non-citizens are exempt, depending on how long they worked and what they earned. IRAS lists these categories, and the employer must still report their income through IR8A or the Auto-Inclusion Scheme by 1 March.
If you are unsure, send us the employee’s pass type, start date and last day, and we will run the calculator.
The process, step by step
- Check whether clearance is needed.
- File the IR21 at least one month before the last day. The form uses the official last day of service as the date of cessation, not the date the work pass is cancelled or the date after leave is used up.
- Withhold all monies due from the day the employee gives notice, or from the day you notify termination or an overseas posting. You cannot build up the amount by deducting from monthly salary. If you cannot withhold something, state the reason on the form. Otherwise, you may be liable for the employee’s unpaid tax.
- Wait for IRAS. About 80% of e-filed cases are processed within 7 working days; paper takes about 21 days.
- Act on the Clearance Directive. It appears on myTaxPortal three working days after processing. Release the withheld monies to the employee, or pay the assessed tax to IRAS, within 10 days.
- File an Additional or Amended IR21 before releasing any extra income, such as a late bonus.
What goes into the form
- Employment details: arrival date, cessation or posting date, last salary paid, and any tax borne by the employer
- Income in Singapore dollars, by calendar year, for the year of departure and the previous year if not already reported
- Details of taxable share option or award gains, where there are any
- For retrenchment, each payment component and its taxability, with a breakdown to the employee
Three points from IRAS’s form notes often change the figures: a non-contractual bonus counts as income on the date it is paid; director’s fees count as paid on the date they are approved at an AGM or EGM; and income is reported by calendar year, not by employment period.
Example (fictional)
Alder Digital Pte Ltd has an employee on an S Pass who gives one month’s notice on 1 December, with her last day on 31 December. The one-month filing point has already passed, so Alder files on 1 December and states the reason on the form. From 1 December, it holds her final salary and unused leave pay. IRAS issues its Clearance Directive after processing. Alder then releases the withheld amounts or pays IRAS within 10 days, as the directive says.
Questions we get asked
Do all foreign employees need an IR21? No. Check IRAS’s calculator. Singapore Citizens never do, and some non-citizens are exempt.
What if the employee gives less than a month’s notice? File as soon as you know, and state the reason.
What if we already paid the employee’s final pay? Tell us. You may be liable for their unpaid tax, and we will review the position with you.
What happens if we don’t file? IRAS can fine an employer for late or non-filing, and an employer who did not withhold may be liable for the employee’s tax.
Does this cover PRs? Yes, when they leave Singapore permanently or go on an overseas posting.
Is this part of your payroll service? It works with it. See foreign employee payroll and payroll processing.
Sources
- IRAS: Tax clearance for foreign and SPR employees (IR21), step-by-step guide
- IRAS: Late filing or non-filing of tax clearance
- IRAS: Tax clearance for employees
General information, not professional advice for your specific situation.
Have a foreign employee leaving?
Send us the employee’s pass type, start date and last day, and we will tell you whether IR21 applies and what to hold back. Ask us about your IR21.