You’ve had enough of the confines of corporate life and want to juggle being a freelance photographer, Grab driver and home baker. But don’t jump ship just yet. You need to sort out how to protect yourself, beginning with your finances.
"Plenty of pets in your neighbourhood? Be a dog walker."
You’ve seen them everywhere and used their services: Grab drivers, delivery riders, writers, and wedding photographers. Welcome to the gig economy. It might be newfangled, but it’s sweeping Singapore in a big way. So what is it? Gig workers earn their dough through stint work rather than a fixed salary. They may get their jobs via online labour-sharing or capital-sharing platforms where people market their skills (such as Ushift or Mywork Global). The freelancer you approach for a service (filming, teaching, designing, you name it) is part of the gig economy. So are those who are under an employment contract, such as Foodpanda riders.
It’s a flexible working arrangement that’s tempting, but it’s a freedom that also comes with sorting out these seven financial to-dos.
According to the Ministry of Manpower, about 9 per cent of Singapore’s labour force was engaged in gig work in 2016. Flat number is set to grow as more people trade their fulltime jobs for fieelancing work or temporary employment.
1 HAVE A STASH OF SAVINGS TO LAST 12 MONTHS
“It’s always better to assume you will not have income for at least six to 12 months,” says Paul Wong, a financial adviser at Advisors Alliance Group.
So track your monthly expenses for yourself and your dependants (three months should give you an idea of your spending patterns).
2 YOU ALSO NEED AN EMERGENCY FUND
That’s after you’ve accounted for all your living expenses. You need about six months’ worth of expenses in a savings account that you can easily dip into if you absolutely need to.
3 PAY OFF EVERYTHING YOU OWE
“You can’t have any significant expenditures pending in the next year. Set aside a buffer sufficient to pay for them,” Paul says. Apart from clearing your debt, you should ensure that you’ve also set aside enough to pay for your insurance premiums for the next 12 months.
4 REGISTER WITH ACRA
Say you want to be a home baker. If you want to operate under a brand for some legitimacy, you have to register it as a business with the Accounting and Corporate Regulatory Authority (ACRA). Flying solo? Register as a sole proprietor on the ACRA website. It costs $115 for a one-year registration, or $175 for three years. However, you’ll have unlimited liability – if a customer sues you, or your business tanks, your home could become collateral.
If your business has one or more partners, you should register a company. “This entitles you to corporate tax benefits and limited liability,” says Rebecca Chiu, a freelance legal consultant, social and tech entrepreneur. This means your liability for the company’s debts and payments is limited to the amount that you invested. The process is tedious, and you’ll need to engage a corporate secretarial company.
5 DO YOUR BOOKKEEPING
Yes, your income is fully taxable, which means you need to account for every transaction. There are apps for this: “Accounting software like Xero or Quickbooks is easy to use and inexpensive,” says Rebecca. These can generate invoices and track deductible expenses like rent.
“You can qualify for tax deductions for these expenses,” Rebecca adds. The Inland Revenue Authority of Singapore (IRAS) website provides more information. Do bookkeeping regularly so your accounts are in order when it comes time to declare your income.
6 KNOW YOUR VALUE
Gig work means you get to renegotiate your pay. So familiarise yourself with market rates.
“Showcase your skills to your clients before you start negotiating wages. You can show how you valueadd for them through a simple presentation or a business deck,” suggests Rebecca.
7 KNOW YOUR OPTIONS
“Having options gives you bargaining power,” says Rebecca. “Explore opportunities before you commit. During quieter periods, upskill yourself so you have an edge.”
Work with established organisations that have enforceable contracts and fixed payment schedules, says Mikayla Ng, a financial consultant who’s also a member of the service staff for a local club. “They are more likely to pay you on time because they risk damaging their reputation if they don’t.”
To avoid late payments or nonpayment, draft written contracts with clauses imposing a penalty or requiring the client’s personal guarantee. Legal advice is helpful when preparing important contracts to avoid disputes, says Rebecca.
"Private tutoring gave Kalpana the flexibility to work around her husband’s schedule."
TWO WOMEN ON HOW THE GIGECONOMY WORKS FOR THEM
It comes with compromise and commitment
Jothiramalingam, 33, left her full-time job as an educator in 2016 to help her husband, Ram, market his new privatechef business. “I started posting photos of his cooking on social media,” she shares. She’s also in charge of logistics. “I prepare the ingredients, pack the food and clean up the house for hosting.”
But private events were sporadic, and on bad months they only received a handful of orders. For added income, Kalpana took up a regular parttime gig at a student care centre, working from noon to 6pm. “I have the morning to help Ram with the grocery shopping,” she explains.
However, because the pair only had enough savings to cover two months of expenses, Kalpana decided to take up private tutoring too, working until 9pm on some weeknights. With her weekends spent on the food business, it’s been a challenge to carve out time to spend with her husband.
“The key is to plan,” says Kalpana. “If I have a long day ahead, I wake up early and sleep early. I prepare everything that can be done the day before an event. And for my teaching jobs, I make sure I never bring my work home.”
For the past two years, Kalpana and Ram have had to give up long vacations, but they have no regrets. Ram’s popularity has grown, and the pair now get about four to five orders each month. “Initially it was tiring, but now we have a more stable arrangement,” says Kalpana. She believes it is possible to sustain yourself on multiple gigs as long as you give yourself downtime to prevent burnout. Every few months, she and Ram go on short getaways to nearby countries for some well-deserved R&R.
It was the mid-career switch she needed
Ask Michelle Chua, 40, what her job is, and she replies: “Spoken word artist singerad ministrator workshop facilitator baby sitter. I also take on ad hoc work as a receptionist and phone surveyor,” she adds. For most of her working life, Michelle held full-time jobs in various arts organisations. Only in mid-2017 did she decide she needed a change. “I found that I was comparing myself to younger people and worrying about how competitive I was,” she says. “I needed to figure out what I could do that was meaningful and worth my time.”
When her contract with her employer expired, she decided not to apply for another full-time position. Instead, she took up project-based work. She became an exhibition guide at The Substation, and held a part-time publicity and marketing position at Epigram Books. She participated in two regional poetry slams and placed third in the individual category at the 2017 Iskarnival Kool festival in Malaysia. The freedom to pursue multiple passions was liberating.
As a free agent, Michelle continues to immerse herself in many art forms by gallery sitting, teaching spoken word poetry, and singing jazz. She also works tirelessly on writing, editing and submitting her work for publication in literary journals and other platforms. In May, one of her short story submissions was brought to life by a theatre group at the Haque Centre of Acting and Creativity.
“My deepest concern now is how best to monetise my talents,” Michelle shares. Artistic projects demand a significant amount of creative energy, but not all provide a high return on investment. She sleeps little, working late into the night. “But work-life balance is still my quest even with the need to be practical. I lower my expectations of myself to keep sane.” For example, she gave up a year of singing to focus on writing.
The best piece of wisdom Michelle can proffer is to surround yourself with people you can rely on. “I think it’s important that one’s social circle is enriching, and emotionally and spiritually supportive.”
TYPES OF INSURANCE YOU NEED
Health Insurance and Personal Accident
No matter how tight your budget is, these are the two most basic personal insurance plans you must have to cover medical emergencies and treatment. Personal Accident Insurance is particularly important if you’re doing jobs that require you to move around. It provides compensation should you get into an accident and be unable to work.
If you’re providing a service, this will protect you in the event of malpractice. Even if you aren’t at fault, the legal fees required to defend yourself can be expensive.
Premiums can range from $100 a year for small-scale businesses to upwards of $1,000 an event. You can buy these premiums from any insurance provider – the rates and coverage would depend on your needs.
This one applies to gigs that require you to deliver goods or carry passengers in your personal vehicle. Since you’ll be on the roads more frequently, the chances of having an accident are higher. Plus, because you’re using your personal vehicle to generate income, you’ll want to get the most comprehensive insurance which protects you if you need to pay for repairs, medical fees, third-party damages and roadside insurance. If you’re driving for Grab, you get special rates with its partner insurers.
You also need protection if you ride an e-scooter or bicycle for delivery services like Foodpanda. Personal accident and medical insurance are a must because some companies charge you a penalty if you are absent from work without a medical certificate.