Common Mistakes Made in Filing

It is important that you provide complete and accurate information when filing the Form IR21. Tax clearance processing time may take longer if the information in the Form IR21 is incomplete or when IRAS needs clarification on the submitted information.


MistakesWhat you need to do instead
Declaring Employment Income  
1. My employee worked from 1 Oct 2020 to 31 Jan 2021. His monthly income was $5,000. I reported the total amount of $20,000 under the column "Year of Cessation".You should report your employee's income separately for each calendar year. Please report the income as follows:
a) Year of Cessation (1 Jan 2021 to 31 Jan 2021) - Income $5,000
b) Year Prior to Year of Cessation (1 Oct 2020 to 31 Dec 2020) - Income $15,000.
Withholding Monies for Tax Clearance  
2. My employee has tendered his resignation on payday and I have paid him his last month's salary. I did not know that I have to withhold monies from him for tax clearance. So, I have declared zero for "Amount of Monies Withheld for Tax Clearance" in the Form IR21.

You are required to withhold all monies due to the employee from the day he notified you of his intention to cease employment (i.e. the day you received his resignation letter).

As the obligation to withhold monies from the employee was not fulfilled, you may be held liable for the tax payable by the employee.

Employee's Income Tax Borne by Employer  
3. Since I have withheld my employee's remuneration for tax clearance, I will indicate "Income Tax Borne by Employer" in the Form IR21.

Paying tax from the withheld remuneration is not considered tax borne by employer. Thus, do not indicate "Income Tax Borne by Employer" in the Form IR21.

Tax is considered to be borne by employer if the employer is bearing the tax liability of the employee. The amount of tax liability will then form a taxable component in the hands of the employee. You need to indicate "Income Tax Borne by Employer" for such cases.

Unexercised Stock Options  
4. My employee has not exercised his share options when he ceased employment in Singapore. As such, there are no share option gains to be reported in the Form IR21.

Under the "deemed exercise" rule, your employee is deemed to have derived gains from his unexercised share options or unvested share awards at the point of tax clearance. You will need to report the deemed gains from the unexercised share options or unvested share awards in the Form IR21 - Appendix 2.

You can download a copy of Appendix 2 (40KB, XLSX), complete and attach it as an attachment when e-Filing the Form IR21.

For more details, refer to What should I do if there are unexercised share options.

Making Changes After Filing  
5. I discovered some errors after I have filed a Form IR21. The income of my employee should be lower than the amount reported previously. I have to complete another Original Form IR21 to replace the one I have filed earlier.

You should complete an Amended Form IR21 to replace the Original Form IR21. When filing the Amended Form IR21, remember to:
a) Select "Amended Form";

b) Report the full set of income details and the revised amount of withheld monies; and
c) Withhold the additional payments (if any) pending IRAS' processing of the Amended Form IR21.

6. I am paying a non-contractual bonus to my employee who had ceased employment with my company last year. Since this is an additional payment, I have to complete an Additional Form IR21 and report the total income paid to him in the year.

You should complete an Additional Form IR21 (Post-cessation benefits provided after year of cessation). When filing the Additional Form IR21, remember to:

a) Select "Additional Form (Post-cessation benefits provided after year of cessation)";

b) Report the amount of non-contractual bonus under Income Details and "Amount of Monies Withheld for Tax Clearance"; and
c) Withhold the additional payment pending IRAS' processing of the Additional Form IR21.