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Witholding of salary

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Primrose Hill
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Witholding of salary

Postby Primrose Hill » Tue, 20 May 2014 8:26 am

I am just trying to find out from other fellow members here- on the withholding of the final month salary.
So, husband has resigned from his company, going to work for someone else. His company asked him to sign an undertaking with his existing company that he will pay all his taxes.
Has this happen to anyone here? Is this the norm? It is something that I have never come across. Surely, my tax obligations is between myself and IRAS not between myself and employer. Employer mainly provides the numbers to IRAS, IRAS computes etc etc and then sends me a bill which I will then choose to pay annually or via direct debit/GIRO.

http://www.iras.gov.sg/irasHome/page04.aspx?id=544

IRAS states "may" not must.

Steve1960
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Postby Steve1960 » Tue, 20 May 2014 9:03 am

Someone else will no doubt point you in the right direction, this has come up before.

The employer must hold back the final salary to ensure payment of any due tax. It's the way they do it here I am afraid.

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martincymru
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Postby martincymru » Tue, 20 May 2014 9:29 am

Tax collection probably the most efficient in the world.

//
Make someone else liable/responsible for your "work" .............. well that's another story.

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JR8
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Postby JR8 » Tue, 20 May 2014 9:47 am

Steve1960 is correct.

If you don't pay your annual tax due, then your ex-employer is on the hook for it. That's why they withhold the final month pending the calculation of any outstanding liability, that's meant to leave them more than covered. In theory you get the net back later.

Long ago I left an employee here, and they did this. As it happened I transferred back to my 'home branch' of the same company. I forgot about having the final month withheld, until maybe a year+ later hearing via HR that the SG branch had a further net-liability for me from IRAS and that I had to pay it.

Initially I refused to accept the liability 'arising from the error in HRs calculation at the time of departure'. But you can imagine the '['Cannot compute'] - This is the government you know!' response that got. I strung it out as long as I could 3+ years, until it threatened becoming a perpetual issue for me with local HR.

So I paid it off, at maybe $100 a month. By then I was in the US, and had personalised 'checks' with a fisherman's design... like this... http://www.purechecks.com/fishermens-ch ... d-dunleavy - So on the sharks and fish I'd artisticly enhance (by hand/pen) them with protruding fangs, menacing eyes, and so on. Together with a few pinholes through the machine-readable numbers at the bottom. So I begrudgingly eventually settles that debt, but at the same time had some bitter fun doing so...

---------

Edit to add: Before this gets misquoted/misrepresented on some other local forum. :roll:

The local SGn company had settled my liability in full, when due, with SG-IRAS.

The outstanding issue as described was solely between me and SG-HR. My issue being that they, together with their external accountants, had woefully miscalculated something that should have been very simple... and then took a year/years to follow it up. My opening position was that that they should hence write it off ... but, that's not the SGn way ...

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ecureilx
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Postby ecureilx » Tue, 20 May 2014 11:33 am

JR8 wrote:
---------

Edit to add: Before this gets misquoted/misrepresented on some other local forum. :roll:
..


:roll: :roll:

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sundaymorningstaple
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Re: Witholding of salary

Postby sundaymorningstaple » Tue, 20 May 2014 12:20 pm

Primrose Hill wrote:I am just trying to find out from other fellow members here- on the withholding of the final month salary.
So, husband has resigned from his company, going to work for someone else. His company asked him to sign an undertaking with his existing company that he will pay all his taxes.
Has this happen to anyone here? Is this the norm? It is something that I have never come across. Surely, my tax obligations is between myself and IRAS not between myself and employer. Employer mainly provides the numbers to IRAS, IRAS computes etc etc and then sends me a bill which I will then choose to pay annually or via direct debit/GIRO.

http://www.iras.gov.sg/irasHome/page04.aspx?id=544

IRAS states "may" not must.


Not only is this the law, if the employer doesn't and doesn't file the IR-21 (Tax clearance) they are also liable for a fine of 1000 per instance, as well as having to eat the tax liability if they let you go. Signing a letter of undertaking will have no bite with IRAS.

What is worse, is you have to be careful when you give you letter of notice as it could be a double bite while you are having to sort out your final finances and clearances here. IRAS "requires" that HR withholds ANY and ALL salaries from the time the company receives your resignation/termination letter (as the case may be). This means, if you have to give one month's notice you could have two months salary withheld if you gave your notice a day or two before you received you monthly salary. While it only takes around 7 day to receive tax clearance, the employer will likely hold your salary until your final paycheck less any taxes that they paid on your behalf.

In fact, the IRAS can also arbitrarily make your employer a tax agent (if you are a PR or Citizen employee who has not paid their taxes), which means the employer has to deduct the taxes from his salary and remit it to the IRAS. Often I get these but usually the employee has moved on and no longer works for us, but occasionally it happens. Then, after having withheld and remitted to IRAS, they will send me a letter notifying me that my duties as a tax agent have been fulfilled and rescinded.

Primrose Hill
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Postby Primrose Hill » Tue, 20 May 2014 1:12 pm

Wow, complicated. :shock:

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sundaymorningstaple
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Postby sundaymorningstaple » Tue, 20 May 2014 2:00 pm

Actually, not so bad. Used to be much worse as the Tax Clearance had to be submitted manually/faxed and it DID take upwards of a month. Then it got better so manual submission would still take close to a month but online submissions would usually take 10 days to 2 weeks. Now, online submission take normally only 7~10 days maximum AND they are pretty good with short notices and such (the requirement is that the employer HAS to send an IR-21 30 days before the last day of employment). But with another ministry (MOM) playing havoc with FTs the IRAS has had to relax their criteria a bit. In fact I just filed one last week and instead of 3 or 4 preset reasons (one of which was "other), now they have 6 or 7 reasons, some of which now are "short notice", "did a runner/abscounded", "gave one month notice", did not give one month notice", "Terminated", etc.

Primrose Hill
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Postby Primrose Hill » Wed, 21 May 2014 4:27 pm

Thank you, SMS.
All signed and returned yesterday to HR

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aster
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Postby aster » Thu, 22 May 2014 1:18 am

Primrose Hill wrote:Wow, complicated. :shock:


Actually, very straightforward and person-friendly compared to other Western nations.

It's all about the mentality. The "cannot" attitude, although prevalent in the service sector (especially at the lowest levels), does not apply to gov't institutions - apart form MoE - which are generally helpful and most importantly flexible in helping you out and ensuring that things go through smoothly.

My company had no idea that something like SDL exists, and when we found out it was all plain sailing and "no problem" which would not have been the case in most other countries.


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