Form IR56F: notifying an employee's cessation

What Is Form IR56F

Form IR56F notifies the Inland Revenue Department (IRD) that an employee is about to cease employment. It is part of the IR56 series of employer returns, used specifically when employment ends by resignation, retirement, dismissal, or expiry of a fixed-term contract.

The form gives the IRD advance notice to review the employee's salaries tax position and settle any outstanding liabilities before the employment ends. The IRD may issue a tax clearance requirement, meaning the employer must withhold final payments until the employee pays any tax due.

Form IR56F Hong Kong

In Hong Kong, Form IR56F is one of several employer notification forms prescribed by the Inland Revenue Department. It is distinct from Form IR56B (the annual return of an employee's remuneration), Form IR56E (notification of a new employee), and Form IR56G (notification of an employee about to depart Hong Kong). Each form serves a different purpose in the employer's reporting obligations under the Inland Revenue Ordinance.

The form must be completed for every employee whose employment is ending, regardless of the reason. This includes part-time and full-time employees, as well as directors who receive remuneration.

Notification of an Employee About to Cease Employment

File the notification at least one month before the employee's cessation date, or as soon as practicable if the cessation is unexpected. The employer must provide the employee's personal details, the date of cessation, and details of all remuneration paid or payable up to the cessation date, including salary, bonuses, commissions, and any benefits in kind.

The IRD uses this information to assess outstanding salaries tax liabilities. If the employee has unpaid tax, the IRD may issue a notice requiring the employer to deduct the tax from the employee's final payment and remit it to the IRD.

IRD Form IR56F

The IRD form IR56F is available for download from the Inland Revenue Department's forms index. The form requires the employer to state:

• The employee's name, Hong Kong identity card number, and residential address
• The date of cessation of employment
• The total remuneration paid from the beginning of the year of assessment to the cessation date
• The amount of any final payment, including severance payment or long service payment
• The employee's MPF contributions and any other deductions

The completed form must be signed by the employer or an authorised representative and submitted to the IRD's office.

Employee Leaving Hong Kong Form

Form IR56F is sometimes confused with Form IR56G, the employee leaving Hong Kong form. The distinction is important.

• Form IR56F is filed when an employee ceases employment but remains in Hong Kong.
• Form IR56G is filed when an employee is about to depart Hong Kong, regardless of whether employment is also ceasing.

If an employee is both ceasing employment and leaving Hong Kong, the employer must file both Form IR56F and Form IR56G. The IRD may then require the employee to obtain tax clearance before departure, which can involve a more urgent assessment process.

Employer Cessation Notification

The employer cessation notification requirement applies to all employers registered with the IRD. Failure to file Form IR56F on time can result in penalties. The IRD may also issue an estimated assessment against the employer if the notification is not received, holding the employer liable for the employee's unpaid tax.

Keep a copy of the filed Form IR56F for your records, along with any correspondence from the IRD regarding the employee's tax clearance. This documentation may be needed if the IRD later queries the cessation or the final payment.

Filing the Form

Form IR56F can be filed through the Business Tax Portal, the IRD's electronic filing system for employers. Paper filing is also accepted. Submit the form to the of the IRD at the address stated on the form.

After filing, wait for the IRD's response before making the final payment to the employee. If the IRD issues a tax clearance notice, deduct the specified amount and remit it to the IRD. Retain evidence of having filed the notification before proceeding with the final payment if no notice is received.