# IR21 tax clearance, done on time.

URL: https://skillsforce.com.sg/compliance/ir21-tax-clearance
Title: IR21 Tax Clearance for Foreign Employees | Skillsforce
Description: When to file Form IR21, the one-month deadline, the mandatory withholding rule and the penalties for Singapore employers losing a foreign or PR employee.
Updated 18 June 2026. First published 25 June 2026. Author: Skillsforce (People-operations team)

When a foreign or PR employee leaves, IRAS expects tax clearance filed in advance and their final pay withheld. Here is exactly what that means, and the deadline you cannot miss.

## When must an employer file IR21 in Singapore?

File Form IR21 at least one month before a non-citizen employee’s last day, overseas posting, or departure from Singapore for more than three months. From the moment you know they are leaving, withhold all monies due and release them only on IRAS’s Clearance Directive. Failure to file can mean a fine up to S$5,000.

## When IR21 is required

Tax clearance via Form IR21 applies to non-Singapore-Citizen employees (foreign work-pass holders and Singapore PRs) who cease employment, go on an overseas posting, or plan to leave Singapore for more than three months. Singapore Citizens never require IR21.

Cancelling an Employment Pass with MOM does not discharge the IR21 obligation. They are two separate processes under two authorities, and IRAS can recover under-withheld tax directly from the employer.

## The IR21 sequence

From notice to final release, in order.

1. **Withhold all monies from the moment you are aware:** Once notice is given (or an overseas posting / 3-month-plus departure is confirmed), hold salary, bonus, leave pay, allowances, gratuities and any lump sums.
2. **File IR21 at least one month in advance:** e-File via myTax Portal. Where one month’s notice is impossible (immediate resignation), file as soon as possible and state the reason: do not stop withholding.
3. **Wait for the Clearance Directive:** IRAS issues either a Notification to Release Monies, or a Directive to Pay Tax (remit the stated amount within 10 days, then release the balance to the employee).
4. **Report on one track, not both:** An employee cleared via IR21 is excluded from your annual IR8A/AIS submission for that employment period.

## Penalties to avoid

- Failure to file IR21 by the due date is an offence carrying a fine of up to S$5,000 per offence.
- Fail to withhold without valid reason and you become personally liable for the employee’s unpaid tax.
- Late remittance of a Directive to Pay Tax adds a 5% penalty, plus 1% per month up to 12% of the unpaid tax.

## Frequently asked questions

### Does cancelling an Employment Pass remove the IR21 obligation?

No. MOM pass cancellation and IRAS tax clearance are separate. The IR21 trigger is the cessation of employment or the cross-border move, governed by IRAS. Assuming it disappears when the pass is cancelled is a common, costly error.

### Do I file IR21 for a Singapore PR who is staying in Singapore?

Not if they are not leaving permanently. Obtain a Letter of Undertaking confirming they will not leave Singapore permanently, keep it on record, and report their income via IR8A/AIS instead. The concession does not apply to an overseas posting.

### What if the employee resigns with immediate effect?

File IR21 as soon as possible and state the reason you could not give one month’s notice. Critically, keep withholding all monies due: the withholding obligation starts at notice, not at the filing deadline.

## Sources

- [IRAS: tax clearance for foreign & SPR employees (IR21)](https://www.iras.gov.sg/taxes/individual-income-tax/employers/tax-clearance-for-foreign-spr-employees-(ir21)) (Accessed 18 June 2026)
- [IRAS: clearance directives & monies withheld](https://www.iras.gov.sg/taxes/individual-income-tax/employers/tax-clearance-for-foreign-spr-employees-(ir21)/clearance-directives) (Accessed 18 June 2026)

## Related

- [Payroll Processing](https://skillsforce.com.sg/services/payroll)
- [IR8A employer guide](https://skillsforce.com.sg/compliance/ir8a-employer-guide)