Generally, when your non-Singapore Citizen employee ceases employment with you in Singapore, goes on an overseas posting or plans to leave Singapore for more than three months, you must notify IRAS at least one month in advance and withhold all monies due to the employee from the date you are aware of his impending cessation of employment or departure from Singapore. This process is known as tax clearance and it applies to all work pass holders including Personalised Employment Pass (PEP) holders.

When is Tax Clearance Not Required

Tax clearance is not required for the following categories of employees/scenarios. If your employee falls under any of these categories/scenarios, you do not need to file the Form IR21 but you must submit the employee's employment income to IRAS via the Form IR8A or Auto Inclusion Scheme (AIS) by 1st Mar of the following year:

  1. Singapore Citizens
  2. Singapore Permanent Residents (SPR) who are not leaving Singapore permanently after ceasing employment with you.

    Please obtain a Letter of Undertaking (LOU) (28KB, DOC) from the employee stating that he will not leave Singapore permanently. With the LOU, you are not required to file the Form IR21 for the employee. Please keep the LOU in your records. 

    This concession, however, does not apply if the SPR employee is going on an overseas posting or employment. You are required to seek tax clearance for the SPR employee who is on an overseas posting or employment unless he meets the conditions listed in Note 1 below.

  3. Non-Singapore Citizens who:

    1. Worked for 60 days or less in a calendar year (Scenario 1). This does not apply to directors of a company, public entertainers or individuals exercising a profession, vocation or employment of a similar nature.
    2. Worked for 183 days or more within a calendar year and earned less than $21,000 annually (Scenario 2).
    3. Worked for 183 days or more within a continuous period straddling two years and earned less than $21,000 annually (Scenario 3).
      This two-year administrative concession is only applicable to foreign employees who have entered Singapore on or after 1 Jan 2007. It does not apply to directors of a company, public entertainers or individuals exercising a profession, vocation or employment of a similar nature.
    4. Worked for three continuous years or more and earned less than $21,000 annually (Scenario 4).

      For Scenario 1 to 4,  you do not need to file the Form IR21 if the employee has not been previously employed by another employer in Singapore within the cessation year or the year prior to the cessation year.

      If you are unsure of the employee's past employment records, please e-File the Form IR21 at myTax Portal. You will receive an immediate online notification if tax clearance is not required for your employee.
    5. Are transferred to another company in Singapore due to:
      - company merger or takeover; or
      - restructuring or posting within the same group of companies.

      You are required to notify IRAS of the transfer via myTax Mail at myTax Portal so that the employee's employment records can be updated. When composing the email, please indicate the “Nature of Enquiry” as “Tax Clearance/Form IR21” and attach the Waiver of Tax Clearance Template (XLS, 32KB). 

      Please ensure that the employment income of the affected employees from both the former and new employers is reported to IRAS via the Form IR8A by 1 Mar of the following year. However, if the non-Singapore Citizen employee subsequently ceases employment with the new employer during the transitional year, tax clearance would be required.

    6. Are away from Singapore for three to six months for:
      - training;
      - business purposes; or
      - overseas posting (See Note 1 below).

    You may also use the Tax Clearance Calculator (XLS, 104KB) to check whether tax clearance is required.

    Note 1 - Overseas posting:
    Tax clearance is not required for an employee who is away for an overseas posting provided the following conditions are met:

    1. The period away from Singapore does not exceed six months;
    2. The employee would return to Singapore to work for the same employer and continue to hold a valid work pass under the same employer during the period that the employee is away from Singapore; and
    3. The Singapore employer continues to pay the employee's remuneration during the said period.

    The above applies to overseas postings on or after 1 Jan 2016 which are incidental to the employment in Singapore. Thus, tax clearance is still required for cases where the services rendered overseas are not incidental to the Singapore employment.

When to File the Form IR21

If tax clearance is required for your employee, you must file the Form IR21 at least one month before:

  1. The employee ceases to work for you in Singapore; 
  2. The employee starts an overseas posting; or
  3. The employee leaves Singapore for any period exceeding three months.

Please refer to our step-by-step guide on the tax clearance process.

You do not have to submit your employee's employment income via the Form IR8A or Auto-Inclusion Scheme (AIS) if the Form IR21 has already been filed.

When There is Additional Income Payable to Your Employee

You are required to file an Additional/Amended Form IR21 to seek further tax clearance before releasing the additional income to your employee. Do not report the additional income via the Form IR8A or Auto-Inclusion Scheme in the following year.

Non-Compliance with Tax Clearance Process

If you are unable to give one month's notice, please provide IRAS with the reason in the Form IR21. Unless there are valid reasons (e.g. an employee's immediate resignation), employers who do not file or are late in filing the Form IR21 may be liable to a fine of up to $1,000.


A. Tax Clearance Requirement

1. My foreign employee has resigned. How do I know if tax clearance is required?

You can use our online Tax Clearance Calculator (XLS, 104KB) to check if tax clearance is required for your employee.

2. Do I need to seek tax clearance for a foreign student who is in Singapore for a business or industrial attachment?

Generally, an employer is not required to seek tax clearance for a foreign student from an educational institution such as a university/college when:

  1. He is required to undergo the business or industrial attachment with the local organisation as a compulsory part of his educational programme; and
  2. He is only paid subsistence allowances to meet his daily expenses and board and lodging in Singapore.

However, if the foreign student enters into an employment contract and is remunerated for services rendered to the organisation in Singapore, the remuneration paid to him will be subject to tax in Singapore. In such an instance, tax clearance will be required.