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Tax clearance - 3 month notice period

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richsing
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Tax clearance - 3 month notice period

Post by richsing » Mon, 28 Mar 2022 11:21 am

Hi, I have a question about tax clearance. Scenario is this:

1. Resigned end of feb, 3 months notice period until end of May
2. IR21 filed by employer a few weeks ago - pending and IRAS say NOA will be done by tomorrow.

I read this page https://www.mom.gov.sg/employment-pract ... ing-salary

And it mentions that if employee resigns, final salary is due on last day of employment.

Does this mean that there will be zero payment of salary until end of May? Even if tax is settled now

More context: Tax would be a small amount compared to salary owed and IRAS have said they may keep me on GIRO as have new position starting immediately after my final day (this request has been submitted). But even if GIRO not approved the amount of tax is a small fraction of salary due.

Thanks for any advice on this matter. Keen to know if anyone on here has been in similar situation.

richsing
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Re: Tax clearance - 3 month notice period

Post by richsing » Mon, 28 Mar 2022 11:27 am

Just working this out in my head as there are 2 separate things here:

1. Regardless of tax clearance, the MOM link does say that final pay is due on last day of employment. So even for SCs and PRs (I am EP), is it the case that the employer does not have to pay them the three months salary until the last day or they pay salary as usual

2. Tax clearance impact - This complicates it as final amount that the employer can release will depend on NOA. Would an employer then need to pay what is left in three payments (33% x 3) or make full deduction of 1st month salary (for example 0%, 50%, 50% of what is due)?

nelyanne
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Re: Tax clearance - 3 month notice period

Post by nelyanne » Fri, 08 Apr 2022 1:26 pm

Based on my experience...
1) You should be getting a normal salary during your notice period for month 1 and month 2
2) For your final salary, there are 2 options: either it will be reduced by your employer by the amount of tax, or you can ask IRAS for a GIRO plan and pay the tax later, on your own. In this case, you should inform your current employer. Then, they will pay you your full salary without any deduction.

If you are in doubt, ask IRAS directly about your options.

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