WANT TO DO GIG WORK? THIS IS WHAT YOU NEED TO KNOW

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.

Herworld (Singapore) - - CONTENTS -

Fig­ure out your fi­nances be­fore leav­ing your cor­po­rate job.

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.

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.

Ac­cord­ing to the Min­istry of Man­power, about 9 per cent of Sin­ga­pore’s labour force was en­gaged in gig work in 2016. at num­ber is set to grow as more peo­ple trade their full­time jobs for free­lanc­ing work or tem­po­rary em­ploy­ment.

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.

Plenty of pets in your neigh­bour­hood? Be a dog walker.

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