Gig Workers Act 2025: What It Means for Malaysian Riders and Drivers

Gig work is a big part of Malaysia's economy. Food delivery riders, e-hailing drivers, parcel couriers, freelance designers and many others earn through platforms and short contracts rather than permanent jobs. For years, gig workers had few clear protections. The Gig Workers Act 2025 is the first law in Malaysia written specifically for them.

For many workers, gig work offers real advantages: flexible hours, quick entry and the ability to earn around studies, family duties or another job. The trade-off has always been uncertainty about protection when something goes wrong. Here is a plain-English summary of what the Act does and what it means for people who earn through gig work.

The Timeline

• The Gig Workers Bill was passed by the Dewan Rakyat on 28 August 2025, as reported by the New Straits Times.
• It became the Gig Workers Act 2025 (Act 872).
• According to a legal update published on Lexology, the Act and its first regulations came into force on 31 March 2026.

The Four Main Pillars

When the bill was passed, the New Straits Times reported that it focuses on four areas:

1. A clear legal definition of who counts as a gig worker.
2. The right to take part in income-related negotiations with platforms and contracting entities.
3. Dispute resolution mechanisms for disagreements over pay and conditions.
4. Social protection for gig workers.

Social Security: The 1.25% Deduction

One of the most practical changes is social security. Under the Act, platform providers must register their gig workers with PERKESO (SOCSO) under the Self-Employment Social Security Scheme, deduct contributions from earnings and pay them on the worker's behalf. The Gig Workers (Social Security) Regulations 2026 set the deduction at 1.25%, according to the Lexology summary. If the deducted amount does not reach the minimum contribution for the worker's selected plan, the worker is notified to pay the shortfall.

In simple terms, a small percentage of each job's earnings goes towards protection against work-related accidents and their consequences. For riders and drivers who spend hours on the road every day, that protection matters.

Check your platform app for the contribution records. You should be able to see the deductions, and you can confirm your coverage with PERKESO directly.

What It Does Not Change

The Act does not turn gig workers into employees. You are still responsible for many things employees take for granted:

• Retirement savings: there is no automatic employer EPF contribution. Self-employed people can contribute voluntarily to EPF, and some schemes offer incentives; check EPF's website for current options.
• Income tax: gig income is taxable income. Keep records and file your return. Our guide to filing income tax explains the basics.
• Vehicle and equipment costs: fuel, maintenance, phone data and insurance come out of your earnings.
• Income gaps: no paid leave or sick leave, so you need your own buffer.

If Your Business Uses Gig Workers

The Act is not only about big ride-hailing and delivery apps. Small businesses that regularly hire freelancers, part-time riders or project-based workers should read up on what counts as a contracting entity and what duties apply. At a minimum, put agreements in writing, be clear about rates and payment timelines, and keep records of what was agreed and paid. Clear terms protect both sides and reduce disputes. If you are unsure how the law applies to your setup, get advice from the Ministry of Human Resources or a lawyer familiar with employment matters.

Money Tips for Gig Workers

1. Track net, not gross. Write down weekly earnings minus fuel, tolls, parking, data and maintenance. That is your real income.
2. Pay yourself a "salary". Move a fixed amount weekly into a separate account for bills, and keep the rest as a buffer.
3. Build an emergency fund. Aim higher than salaried workers, since income can drop suddenly. See our emergency fund guide.
4. Set aside for tax from good weeks so the bill does not come as a shock.
5. Maintain your vehicle. A breakdown costs both repairs and lost earnings.
6. Consider extra insurance for health and your vehicle beyond the statutory scheme.

FAQ

Who counts as a gig worker under the Act?

The Act sets out legal definitions and categories. If you are unsure whether you are covered, check the Act itself or official guidance from the Ministry of Human Resources and PERKESO.

Do I need to register with PERKESO myself?

For platform-based work, the Act places the duty to register and deduct contributions on the platform provider. Freelancers working directly with clients should check PERKESO's self-employment scheme.

Can gig workers negotiate rates now?

The Act provides for participation in income-related negotiations and dispute mechanisms. How this works in practice will develop over time.

The Gig Workers Act is a step towards fairer, safer gig work in Malaysia. Know your rights, check your deductions, and treat your gig income like a small business, with a budget, a buffer and a plan.