3 Feb 2026Business

Tax Guide for Self-Employed & Gig Workers in Malaysia

E-hailing drivers, online sellers, content creators — how to handle your taxes, what expenses to deduct, and mistakes to avoid.

Do Freelancers Need to Pay Tax?

Yes. If your annual income exceeds approximately RM34,000, you must register with LHDN and file a tax return. This applies to:

E-hailing drivers (Grab, inDriver, MULA)
Food delivery riders (GrabFood, Foodpanda, ShopeeFood)
Freelance designers, writers, developers, photographers
Online sellers (Shopee, Lazada, TikTok Shop, Instagram)
Tutors and private teachers
Content creators and influencers (YouTube, TikTok, Instagram)
Part-time consultants and agents

Important: If you have a day job AND a side income, both must be declared.

Which Form Do You File?

Situation	Form	Deadline
Employment income only	Form BE	15 May
Any business / freelance income	Form B	15 July

Any self-employment income — even just a side hustle — means you must use Form B, not Form BE.

How Self-Employment Income Is Taxed

Your tax is calculated on net profit, not gross revenue. This is the most important concept for freelancers.

Net profit = Gross income − Allowable business expensesEvery legitimate business expense you can prove reduces your taxable income.

Allowable Business Expenses

For E-Hailing Drivers

Fuel/petrol costs, car maintenance and repairs, road tax and insurance (business portion), toll charges, phone and data plan (used for the app), car instalment interest (not the principal), depreciation on vehicle (capital allowance).

For Online Sellers

Cost of goods sold (product purchases, raw materials), packaging materials, shipping and delivery costs, platform fees and commissions (Shopee, Lazada fees), advertising costs (Facebook Ads, Shopee Ads), storage or warehouse rental, phone and internet costs.

For Freelancers (Design, Writing, Dev)

Computer/laptop and software subscriptions, internet subscription, phone bills, co-working space or home office (proportionate), professional development and courses, portfolio website hosting, travel to meet clients, stationery and office supplies.

For Content Creators

Camera, lighting, and audio equipment, video editing software subscriptions, props and materials for content, internet and phone costs, studio or filming space rental, travel for content creation.

Rule of thumb: If the expense is necessary to generate your income and you can prove it with a receipt, it's likely deductible.

Record Keeping (7 Years)

LHDN requires proper records for 7 years. At minimum, keep:

Income records — invoices, bank statements, platform statements (Grab, Shopee, etc.)
Expense receipts — every receipt for business expenses
Bank statements — showing business transactions
Vehicle log book — if claiming car expenses, record business vs personal use

No receipts = no deduction if audited. Get into the habit of photographing receipts or using an expense tracking app.

Instalment Payments (CP500)

Unlike salaried employees who have PCB deducted monthly, self-employed individuals must make tax payments in advance through the CP500 instalment scheme — 6 bi-monthly instalments sent by LHDN.

Failing to pay CP500 instalments on time attracts a 10% penalty on the unpaid amount.

Personal Reliefs Still Apply

Being self-employed doesn't disqualify you from personal reliefs. You can claim all the same reliefs as a salaried employee. Plus:

Voluntary EPF (i-Saraan): Up to RM4,000 relief + government matching up to RM250/year
Voluntary SOCSO: Under PERKESO's Self-Employment Social Security Scheme

Side Income with a Day Job

If you have employment income plus freelance income:

Your employer handles PCB on your salary
You declare both employment AND business income on Form B
Business expenses are deducted from business income only (not from salary)
Personal reliefs apply to your total aggregate income
Total tax is calculated on the combined chargeable income

Example: RM60,000 salary + RM30,000 freelance income − RM10,000 freelance expenses = RM80,000 aggregate income. Reliefs then reduce this further before tax is calculated.

Common Mistakes Freelancers Make

1. Not registering with LHDN — "I didn't know I needed to" is not a defence.

2. Not keeping receipts — every deductible expense needs proof.

3. Mixing personal and business expenses — use a separate bank account if possible.

4. Filing Form BE instead of Form B — any business income requires Form B.

5. Not making CP500 payments — penalties add up quickly.

6. Forgetting platform income — Grab, Shopee, and others report your earnings. LHDN can cross-check.

Estimate your tax as a freelancer

Select "Business (Form B)" and enter your net profit to see your tax.

Open TaxKira Calculator →

Self-employed tax situations can be complex — consider consulting a tax professional for personalised advice. Refer to hasil.gov.my for official rates.