Singapore, a global business hub, welcomes a diverse workforce, including expatriate employees.
When it comes to resigning from a job, understanding the process and associated obligations is crucial.
Here, we'll explore the resignation process for foreign employees in Singapore and key aspects to consider during cessation of employment.
Resignation Process for Foreign Employees in Singapore
Resigning from a job in Singapore involves certain standard procedures for employees:
- Written Notice: Employees are typically required to provide written notice to their employer, adhering to the notice period specified in the employment contract.
- Notice Period: The notice period can vary and is usually one month (the mandatory notice period ranges from 1 day to 4 weeks. Employers may require employees to serve the notice period or pay in lieu of notice.
- Exit Formalities: Upon resignation, employees need to complete exit formalities, including the return of company property and clearance of outstanding matters.
- Employment Pass Cancellation: If the employee is on an Employment Pass, the employer is responsible for canceling it. This involves notifying the Ministry of Manpower (MOM) about the cessation of employment.
- Tax Clearance: Foreign employees leaving Singapore must settle tax matters. The employer should issue the Form IR21 to report the employee's cessation of employment and notify the Inland Revenue Authority of Singapore (IRAS).
Dismissal Process for Foreign Employees by Employers in Singapore
If the employer initiates the termination, they must adhere to the notice period specified in the employment contract or pay in lieu of notice. The termination may involve severance pay under certain conditions:
- Continuous employment for at least 2 years.
- Termination due to redundancy.
- Non-renewal of the employment contract due to redundancy.
- Termination for other reasons.
Severance payment is calculated based on the employee's average monthly wages and reckonable years of service.
Key Considerations During Cessation in Singapore
- Cancellation of Work Pass: Employers need to cancel the employee's work pass through MOM within one week of cessation.
- Tax Clearance: Employers must issue Form IR21 to report the cessation and inform IRAS. Tax clearance is necessary for foreign employees departing Singapore.
- Withholding Final Payment: Employers have the right to withhold the final paycheck until the employee demonstrates the absence of any outstanding tax obligations with IRAS.
- Return of Employment Pass Card: Foreign employees on an Employment Pass must return the pass card to MOM within seven days of cessation.
Understanding these processes ensures a smooth transition during cessation for both employers and foreign employees in Singapore.
Conclusion
Navigating the resignation and dismissal processes for foreign employees in Singapore is crucial to comply with regulations and ensure a seamless transition. Awareness of the associated forms, tax clearance, and employment pass cancellation is essential.
For detailed guidance and assistance in managing the cessation of employment in Singapore, contact us today.