Personal Finance 101 for Self-Employed Workers

Unlike conventional employees, self-employed workers are not employed full-time by a company. They include self-employed workers, e-hailing drivers and delivery riders, homestay hosts and freelancers who provide a range of services, from writing, graphic design, software development and others. Currently, there are more than 4 million freelancers and 160,000 e-hailing drivers in Malaysia.

Companies and conventional workers must follow rules set out by the Employment Act 1955, which covers areas including wages, minimum wages and mandatory retirement savings in EPF. In some ways, the law makes sure workers have some financial stability.

So does this mean that self-employed workers can use the Employment Act to make sure they’re getting paid enough and achieve financial security, too? Unfortunately, the answer is no.

Currently, there aren’t any comprehensive employment laws for self-employed workers, especially related to their pay and retirement savings. So, self-employed workers may find it challenging to plan their finances and ensure long term financial security.

But if you’re one of the many self-employed Malaysians, especially with the growth of the gig economy, there are still ways to manage your finances and take away some of your stress when you don’t earn a fixed income. Read on to find out how!

(Note: Depending on the type and amount of work you do as a gig worker/self-employed person, you may set up a sole proprietorship, partnership or company to incorporate your business. Incorporating a business may involve more complex processes and requirements. For the purpose of this Guide, we’ll be focusing on gig/self-employed workers who carry out their work as individuals.)

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