Leaving Singapore? IR21 Tax Clearance and Your Money Explained

Your employer cannot pay out your final salary in full when you leave Singapore, and that surprises most expats in their last month. Before a foreign employee stops work, the employer has to file Form IR21 with IRAS and hold back everything owed until the tax is settled. That process is called tax clearance. This guide explains who it applies to, the deadlines your employer works to, what happens to share awards and your SRS account, how CPF works for Permanent Residents who leave, and the one portfolio decision you should make before you book the movers.

Last updated: 26 October 2026

Key Takeaways

• If you are not a Singapore citizen and you stop working here, your employer must file Form IR21 at least one month before your last day and withhold all money due to you.
• Unexercised share options and unvested share awards are generally treated as earned at the point of tax clearance, so they can be taxed before you sell them.
• A foreigner who empties an SRS account within ten years of the first contribution pays tax on 100% of it plus a 5% penalty.
• Singapore generally does not tax gains on your portfolio, but your next country might. Settle where you will be tax resident before you sell or move anything.

What Is IR21 Tax Clearance?

IR21 is the form your employer files with IRAS when a non-Singapore citizen employee stops working in Singapore, starts an overseas posting, or leaves Singapore for more than three months.

The rule exists because foreigners can leave before the year’s tax is assessed. Tax clearance lets IRAS calculate what you owe up to your departure and collect it from money your employer is still holding. It applies to all work pass holders, including Employment Pass holders.

The obligation sits with the employer, not with you. IRAS guidance on tax clearance for employees says an employer that fails to file may be fined up to $5,000. In practice, HR raises the form once you resign. Your part is to give accurate dates and make sure HR knows about every payment due to you.

Who is exempt?

Singapore citizens are exempt. Permanent Residents who are not leaving permanently can be exempt if the employer provides a Letter of Undertaking. IRAS lists further exemptions, for example some transfers within the same group, and each one carries conditions.

When Does Your Employer Have to Act?

Your employer must file IR21 at least one month before your last working day, and must withhold all money due to you from the day it learns you are leaving.

That second date is earlier than most people expect. It runs from the day your employer becomes aware of your departure, which in practice is usually when your resignation lands. Every payment due to you is then held.

Step	Who acts	When
Withhold all money due to you	Employer	From the day it learns you are leaving
File Form IR21	Employer	At least one month before your last day
Pay the tax in the Directive To Pay Tax	Employer	Within 10 days of the directive
Release the withheld money to you	Employer	When IRAS issues a Notification to Release Monies

What happens if the tax is paid late?

IRAS gives employers 10 days from the date of the Directive To Pay Tax to send the withheld amount. A 5% late payment penalty applies after that. Release of the withheld money to you follows a separate IRAS notice, the Notification to Release Monies. Plan your cash flow around that gap, especially if the final month includes a bonus or a large leave payout.

What Happens to Your Share Options and RSUs?

For a foreign employee who is no longer employed in Singapore, IRAS treats gains on unexercised options and unvested share awards as derived at the point of tax clearance. You can be taxed on shares you have not yet sold.

IRAS calls this the deemed exercise rule, and it is set out on its page on gains from stock options. For a senior executive with several years of awards still vesting, it can be the largest single item on the final bill.

Why does this matter for cash?

The tax is calculated on value that is still locked up. If your awards vest over the next two years, the tax can fall due before you can sell any of them. Ask HR early how your company’s plan is handled at tax clearance, and how many shares are affected. Then check whether you can sell enough vested shares, or set aside enough cash, to cover the bill before your last day. If you are moving to a country that also taxes share awards, ask a tax adviser about the overlap before you leave, while the grant and vesting records are easy to obtain from your Singapore employer.

How Is Your Final Year Taxed?

It depends on whether you count as a tax resident for that year. A foreigner is generally resident after 183 days in Singapore in the calendar year, and IRAS offers concessions for employment that spans two or three years.

Non-residents pay tax on employment income at a flat 15% or at resident rates, whichever gives more tax. Most other income of a non-resident is taxed at 24%. If you leave in March, your final year may fall short of 183 days. The two-year concession can still help when your employment and presence together form a continuous period of at least 183 days across the year end.

Our tax residency day counter helps you test your dates. Our guide to tax residency rules in Malaysia, Singapore and Thailand covers what happens in your next country.

What Happens to Your SRS Account When You Leave?

It depends on how long you have held it. A foreigner who makes a one-time full withdrawal after at least ten years pays tax on 50% with no penalty. An earlier withdrawal is 100% taxable with a 5% penalty.

IRAS sets out both outcomes on its page on tax on SRS withdrawals. The ten years run from the date of your first SRS contribution. When a foreigner withdraws, the SRS bank withholds tax at the non-resident rate of 24%. The 5% penalty is not refunded.

Should you withdraw before you go?

Look at the numbers before you decide. If you are close to the ten-year mark, the difference between the two routes is large, and timing the withdrawal may matter more than anything else on this list. If you are well short of it, compare the exit cost with the relief you received while contributing.

What Happens to CPF If You Are a PR?

If you renounced PR from 1 April 2024, you can close your CPF account and transfer the savings to your bank once the renunciation is complete. If you do not, the account closes automatically the following month.

The CPF Board puts the average processing time at about 12 weeks. That covers Permanent Residents only. Foreign employees on work passes do not contribute to CPF, so they have no CPF account to close. Our CPF guide for expats covers the scheme in more detail.

What Do We Tell Clients Before They Leave?

Settle where you will be tax resident next before you sell, move or restructure anything. Singapore does not tax the gain on your portfolio, but the next country might.

This is the planning point that matters most. IRAS states that gains from selling shares and financial instruments in Singapore are generally not taxable. A gain you realise while still resident here is therefore usually free of tax. The same gain, realised a month after you arrive in Spain or the Netherlands, can fall under that country’s rules.

The exit is also the moment to fix the structure. The mistake we see most is a portfolio of US-listed ETFs bought through a local broker, carrying 30% US withholding on dividends and US estate tax exposure. Moving countries forces a review of the account anyway. Our guide to investing as an expat in Singapore explains the alternatives.

On SRS, we only suggest it to foreigners likely to stay around ten years or more, or who pay tax at a high marginal rate. If you are leaving early, the exit cost often cancels the relief.

Frequently Asked Questions

Who files the IR21 form, me or my employer?

Your employer files it. IRAS requires the employer to submit Form IR21 at least one month before a non-Singapore citizen employee stops working, starts an overseas posting, or leaves Singapore for more than three months. Your part is to give HR accurate dates and details of all payments due to you, including bonuses and share awards.

Can my employer hold my final salary?

Yes. From the day your employer learns you are leaving, it must withhold all money due to you until tax clearance is complete. IRAS sends the employer a Directive To Pay Tax, which must be paid within 10 days, and a separate Notification to Release Monies telling it to release the withheld money to you.

Do I need tax clearance if I am a Singapore PR?

Permanent Residents leaving Singapore permanently go through tax clearance like other non-citizens. PRs who are not leaving permanently can be exempt if the employer gives IRAS a Letter of Undertaking. If you renounce PR, you can also close your CPF account once the renunciation is complete. See our Singapore expat finance guide.

Are my RSUs taxed when I leave Singapore?

They can be. Under the IRAS deemed exercise rule, gains on unexercised options and unvested share awards of a foreign employee leaving Singapore are treated as derived at the point of tax clearance. That can create a tax bill before you are able to sell the shares. Ask HR how your plan is treated.

Can a foreigner withdraw SRS when leaving Singapore?

Yes, at any time, but the tax depends on timing. After holding the account at least ten years from your first contribution, a one-time full withdrawal is 50% taxable with no penalty. Earlier withdrawals are 100% taxable plus a 5% penalty, with tax withheld at 24%. Our UK pension tax guide for Singapore and the UAE covers pensions on the move.

Does Singapore tax my investments when I leave?

Generally no. IRAS states that gains from selling shares and financial instruments in Singapore are generally not taxable for individuals, and there is no exit charge on your portfolio. The risk sits in your next country, which may tax gains realised after you become resident there.

Related Reading

• Investing as an expat in Singapore: the traps Employment Pass holders miss
• Choosing between UCITS and US ETFs as a Southeast Asia expat
• The best offshore bank accounts for expats in 2026
• Malaysia vs Singapore for expats

If you are planning a move out of Singapore, the months before you leave are when most decisions are still cheap to change. We can review your portfolio, share awards and SRS position against where you are heading next.

Book a no-obligation call with Ciprian

This content is for informational purposes only and does not constitute personalised financial, investment, or tax advice. By reading this post, you agree to our disclaimer.