Gig Economy in Malaysia: Pros, Cons & Regulations

4 min read|Last Updated: February 7, 2024|

Have you ever used ride-hailing services like Grab or booked an accommodation online on platforms like Hotel Trivago/ Airbnb? That’s what we now call the ‘Gig Economy’.

The gig economy is the exchange of labour for money between individuals or companies via digital platforms. Freelancers or independent contractors perform short-term jobs as part of the gig economy. This usually includes ride-hailing, e-commerce delivery, and computer programming.

These increased opportunities lead to workers now being able to work remotely from home or other locations. This allows individuals with family responsibilities or other obligations to schedule their work hours more flexibly. People with a variety of skills can also find employment opportunities in the gig economy.

As a result, more people have access to decent working conditions including higher wages and flexible working hours. Let’s dive deeper into the landscape of the gig economy in Malaysia.

The Gig Economy Landscape in Malaysia

About 30% of the labour force in Malaysia (5 million people) works in the gig economy and the numbers have been growing. With the booming industry of technology, online platforms have been readily and easily accessible anywhere and anytime by anyone, giving rise to the number of workers in the gig economy.

Accompanied by the flexibility in terms of working hours and working location, they are free to choose what type of work as well as the remuneration.

Working from home and hybrid working arrangements is increasingly common now in Malaysia, driving the demand for the gig economy. The future of work is also shifting towards remote or hybrid working models, which will continue to strengthen the gig economy.

Common Gig Tasks in Malaysia

  • Animator

  • Application Developer

  • Travel Consultant

  • Dispatch & Delivery

  • Driving

  • Translator

  • Teaching & Tutoring

  • Creatives (magicians, performers, etc)

  • Insurance Agents

  • Forex Brokers

Malaysia Tax Expert Lera

Factors Driving the Gig Economy in Malaysia

Some of the factors that encourage locals to turn to gig economy include:

  • The blooming industry of technology
  • The rise popularity of working remotely
  • Mushrooming co-working spaces
  • Lack of high-skilled workers
  • Increasingly high cost of living
  • The constant change in market demands
  • Work from anywhere culture

Pros & Cons of Working in the Gig Economy

With every job, there are pros and cons. It is important to carefully consider the benefits and drawbacks of working in the gig economy before you make a decision.

Benefits of gig economy Drawbacks of gig economy
Individuals to work in various markets, to better meet the demands of the industry Unaware of Employees Provident Fund (EPF) and they may lose out on benefits
Having the upper hand during negotiations No consistent pay and health benefits
Higher work-life balance as they are free to change jobs when they feel the need to May not experience as much career growth as compared to working in a company
Provides consumer with a variety of options and services First to be retrenched in case of financial issues in a company
Saves resources in terms of training, benefits, and office space Not favourable for unskilled workers because they can often be exploited. Such as low bargaining power.
Employers to improve the diversity of the workforce in their strategic plans Lower opportunities from larger MNCs who are more inclined to hire companies over freelancers

The alternative to being a gig worker is to start your own company in Malaysia. There are advantages to doing so, such as business grants initiated by the government.

Regulating the Gig Economy in Malaysia

The gig economy is beneficial for the Malaysian authorities, but, for gig workers, it may not be as beneficial as it seems. Here’s why:

  • Gig workers are not recognised as employees, so they are restricted to various grants and benefits such as medical insurance and paid sick leaves

  • They will also face problems securing loans from bank or any financial authorities as their opinions are automatically reduced due to them not being recognised as a full-time employee

With more than 50% of freelances not having a retirement plan, and 55% with less than three months financial buffer, the financial situation for gig workers is not as ideal as they would like to be.

Till date, there is still no specific regulations, law, or guideline to protect the welfare of the gig workers except for the provisions under the Self-Employment Social Security Act 2017 [Act 789], which require self-employed individuals to register and contribute under this scheme.

Future of the Gig Economy

With the gig economy expected to bring in approximately US$2.7 Trillion by 2025, the future of the gig economy in Malaysia is still going strong. The fastest growing jobs online include writing, programming as well as blockchain technology.

The Malaysia’s Gross Domestic Product has improved tremendously as the gig economy has helped individuals to secure additional income or presented them with employment to those that were jobless.


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How does income tax work when I am in the Gig economy?2021-09-13T17:27:00+08:00

When being a freelance worker, even though you are able to have the flexibility to choose how you want to work, you do not have an option when it comes to paying tax. The type of returns is determined by the frequency of jobs when declaring income to the Inland Revenue Board of Malaysia (IRBM).

Are gig workers satisfied with their jobs?2021-09-13T17:26:31+08:00

Generally, 79% of the full timers said that they are happier working on their own rather than bring in a white-collar job. However, they are generally more anxious about their financial status up to 45% of gig workers have high Economic Anxiety compared to 24% of traditional full-time employees as they do not have access to employer-based benefits.

How big is the gig economy on a global scale?2021-09-13T17:26:05+08:00

It is estimated that the Global Gig Economy will be worth $347 Billion USD in 2021. Globally, designing and technology jobs are the most popular job scopes among gig workers with 59% of them in this industry.

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  1. Profile Picture For Timothy
    Hidayah November 24, 2020 at 10:28 am - Reply

    Hi author. May I know how did you derive to the estimation on gig economy by 2025?

    • Profile Picture For Timothy
      Tiwi November 25, 2020 at 5:01 pm

      Hi Hidayah, our estimation was derived after confirmation through research of numerous other publications.

      Please contact us via Paul Hype Page to discuss further.
      Thank you for your question.
      Warm regards

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