Final pay held after leaving a S'pore job? IR21 tax clearance takes 7 to 21 days

Your final pay is on hold because of Singapore tax clearance, the IR21, and most of it comes back.

IRAS makes employers withhold all money due to a leaving foreign worker until income tax is settled. An e-filed IR21 clears within 7 working days, a paper one within 21 days.

It applies whether you move to a better job across town or lost the one you had.

Who it covers

Tax clearance covers non-citizen employees who stop working for a Singapore employer, go on an overseas posting, or leave Singapore for more than three months.

IRAS says it applies to all work pass holders: Work Permit, S Pass, Employment Pass, Personalised Employment Pass and ONE Pass. It also covers PRs leaving Singapore for good.

Who skips it

IRAS lists these cases where your employer files no IR21:

• 60 days or less worked in the calendar year. This does not cover directors, public entertainers or professionals.
• Under S$21,000 a year, if you worked 183 days or more in the year, 183 days or more across two straddling years, or three continuous years or more.
• PRs staying in Singapore. You sign a Letter of Undertaking that you are not leaving for good.
• Overseas postings up to six months, if you return to the same employer, keep a valid pass and stay on the payroll.
• Work pass holders who became PR with the same employer.

The 60-day and S$21,000 exemptions apply only if you had no other Singapore employer in the year you leave or the year before. A helper on S$700 a month earns S$8,400 a year, so clearance often does not apply.

Why your pay is frozen

From the day your employer learns you are leaving, it must withhold all money due to you: salary, overtime, leave pay, allowances, reimbursements, gratuities and lump sums.

Your employer cannot deduct part of your monthly salary in advance to save up for the tax. IRAS forbids it under the Employment Act.

An employer who pays you out without reason becomes liable for your tax. So HR holds everything until IRAS answers.

How long it takes

1. Your employer files the IR21 at least one month before your last day. If it cannot, it must give IRAS the reason; in most cases IRAS allows 10 days' grace.
2. IRAS processes an e-filed IR21 within 7 working days, a paper form within 21 days. Missing details slow it down.
3. IRAS sends either a Directive to Pay Tax or a Notification to Release Monies.
4. With a Directive, your employer pays IRAS within 10 days and releases the balance to you.
5. If the held money falls short, IRAS sends you a tax bill for the rest.

An employer that skips or files the IR21 late without a valid reason faces a fine of up to S$5,000 per offence.

What to do

• A few weeks before your last day, ask HR: have you e-filed my IR21, and how much are you holding?
• Keep a buffer so rent, bills and padala survive a month without that pay. In the ber-months, do not promise a Christmas padala you cannot send yet. Our budget guide shows the math.
• Keep your Singapore bank account open until the money lands. No account yet? See opening a bank account on your Work Permit.
• Update your mailing and email address in the myTax Portal with Singpass, and check your tax bill there.
• New PR? See how CPF changes a new PR's take-home.
• Pass ending? MOM handles that side; read what happens after your employer cancels your Work Permit.
• Flying home for good? Get the OFW travel pass that replaced the paper OEC ready before Changi.

Still no money weeks after your last day and HR cannot explain? Contact IRAS through the tax clearance page) and ask about your status.