How E-Hailing Drivers Can File Their Income Tax

E-hailing drivers in Malaysia file their income tax using Borang B and must calculate their net business income by subtracting eligible business expenses from their total earnings. This figure is then declared to LHDN as part of their annual tax filing. 

At least, that’s the short version of it because every year, our accounting firm still get calls from e-hailing drivers and delivery riders asking us the same question:

“Do I actually need to pay tax on my Grab or delivery income?”

The short answer is yes, but it’s more important for you to understand:

• Which form to use
• What expenses can be claimed,
• What records should be kept can help you file accurately 
• And how to reduce your taxable income. 

Tax Filing Overview for E-Hailing Workers

How Do Free Tax Thresholds Work for Malaysian Gig Workers?

For part-time drivers, your regular salary and your net e-hailing profit are considered together when working out your overall tax position.

This often works like a “stacking” system:

Your salary from your regular job forms the foundation of your income. Any net profit earned from e-hailing is added on top of that amount, which may push you into a higher tax bracket.

Because of this, many part-time drivers who believe they earn “too little” to worry about taxes are surprised to discover that their combined income creates a filing obligation.

“According to research cited by DOSM and Emir Research, approximately 26% of Malaysia’s labour force, equivalent to around 4 million workers, were participating in gig work as of 2020. “

Why Must E-Hailing Drivers File Borang B Instead of Borang BE?

Once you earn income from e-hailing, freelancing, online selling, or other self-employed activities, you are considered to have business income, hence Borang B.

Use Borang B If You Earn:

• E-hailing income
• Ride-sharing income
• Food delivery income
• Freelance income
• Commission-based side income
• Any other self-employed earnings

Use Borang BE If You Only Earn:

• Employment income from an employer
• No business, freelance, or gig income

Why This Matters

LHDN increasingly receives data from digital platforms and financial institutions. Filing Borang BE while omitting e-hailing earnings may trigger under-reporting concerns.

Your platform registration is linked to your Tax Identification Number (TIN) and once you start earning business or gig income, your annual filing should generally be completed using Borang B.

The good news is that your employment income is still included in the same form. You simply enter your Form EA salary information in the employment income section of Borang B.

Gross Income vs Net Income: What Actually Gets Taxed?

For e-hailing workers, you probably know that a portion of your income is taken by the platform. 

If you’re a Grab driver, Grab takes a portion of your earnings, hence a fare that is RM10 can really end up in RM7 while the platform takes the rest.

We need to stress this because tax is calculated on your net business income after allowable business expenses have been deducted, so don’t put the FULL amount of your earnings.

Example

In this example, the driver would generally be taxed based on RM24,000 rather than the full RM40,000 received through the platform.

This is why proper record-keeping is so important. Every legitimate business expense supported by documentation may help reduce your taxable income.

What Expenses Can You Legally Deduct to Lower Your Tax Bill?

One advantage of filing as a gig worker is that you may claim legitimate business expenses that help reduce your taxable income.

The rule is simple:

If the expense was incurred to generate your e-hailing income, it may be deductible.

Common Tax-Deductible Expenses

Platform Fees

• Commission retained by the e-hailing platform
• Booking or service fees charged by the platform

Fuel and Tolls

• Petrol used while driving passengers
• Toll charges incurred during work trips

Vehicle Maintenance

• Engine oil changes
• Brake replacements
• Tyre replacements
• Routine servicing
• Wear-and-tear repairs

Commercial Insurance

• Additional e-hailing insurance coverage
• Regulatory insurance top-ups required for compliance

Mobile and Internet Bills

• Data plans used to operate driver applications
• Mobile expenses related to your driving activity

What Records Should You Keep?

Good record-keeping can make tax season significantly easier and helps support your claims if LHDN requests additional information.

The more organised your records are throughout the year, the easier it becomes to prepare an accurate tax return.

Understanding Pro-Rata Claims

Most drivers use their vehicles for both work and personal travel and that’s okay, perfectly normal. However, this means only the business-use portion can normally be claimed.

For example: 

If your vehicle travelled 20,000 km during the year and 14,000 km were for e-hailing activities, approximately 70% of eligible vehicle expenses may be attributable to your business use. 

The most important thing is to keep trip records, platform statements, and odometer readings to support your calculations if required.

Common Tax Mistakes Made By E-Hailing Drivers

Even experienced drivers can make mistakes when filing taxes.

Some of the most common include:

• Filing Borang BE instead of Borang B.
• Reporting gross earnings but forgetting allowable deductions.
• Claiming 100% of vehicle expenses despite personal use.
• Losing petrol, toll, or servicing receipts.
• Assuming weekend or part-time income does not need to be declared.
• Waiting until filing season to organise a year’s worth of records.

Avoiding these mistakes can help reduce stress and lower the risk of filing errors.

How Do You Safely Preserve Receipts for the Mandatory 7-Year Audit Rule?

A common issue we often see is that while folks do keep receipts, they often fail to store them properly.

This becomes a problem because LHDN can audit records for up to seven years.

The Thermal Receipt Problem

Petrol stations, workshops, and toll operators often issue thermal-paper receipts.

Over time, these receipts can:

• Fade completely
• Become unreadable
• Lose critical transaction details

In some cases, a receipt may become blank within a year especially when exposed to sunlight.

A Simple Record-Keeping System

To protect yourself:

1. Take a photo of every receipt immediately.
2. Save the image to cloud storage.
3. Organise files by year and month.
4. Keep both digital and physical copies whenever possible.

Example folder structure:

• 2026
  • January
  • February
  • March
• 2027
  • January
  • February
  • March

Having organised digital records can make an audit significantly less stressful and helps make sure you can support your expense claims years later.

Read more: How to Prepare Proof of Income in Malaysia: Documents & Tips

Can Filing a Tax Return Help With Future Loan Applications? Yes

Part-time drivers assume they can ignore tax filing if they owe little or no tax and while that is true, we still highly recommend you to file a return because it greatly benefits you.

When applying for:

• Housing loans
• Car financing
• Personal loans
• Credit cards

Banks often want evidence of stable income and for gig workers this can be challenging because income may fluctuate from month to month.

Why Tax Records Matter

A filed Borang B creates an official income trail that financial institutions can review.

While approval is never guaranteed, a history of properly filed tax returns can help demonstrate financial credibility and that’s better than nothing.

File Your Taxes Properly and May You bLess with Green light traffic

As Malaysia’s gig economy continues to grow, it’s becoming more important than ever for e-hailing drivers and delivery riders to keep their records in order and stay on top of their tax obligations. 

With greater attention being placed on gig work and platform-based income, having a clear paper trail today can save you a lot of headaches tomorrow.

While nobody likes doing taxes,taking the time to do it properly really helps when applying for loans, financing, or other financial products in the future.

The good news is, you don’t have to figure everything out on your own.

At Accounting.my, we help self-employed individuals, gig workers, freelancers, SMEs, and growing businesses make sense of taxes, bookkeeping, compliance, and financial reporting. Whether you’re trying to understand what expenses you can claim, organise a year’s worth of receipts, or simply want reassurance that you’re filing correctly, we’re here to help.

So keep those receipts, track those kilometres, file your taxes on time, and may your next shift be filled with five-star ratings, generous tips, and plenty of green-light traffic along the way.

Source:

• LHDN/IRBM media release on Uber and GrabCar drivers — Published 31 March 2017. Supports that e-hailing income is treated as business income, tax is charged on net income.
• Grab Malaysia Terms of Service: Transport, Delivery and Logistics — Official Grab source. Supports that Grab commission may be up to 20% of consumer charges unless otherwise communicated and accepted.
• Bank Negara Malaysia CCRIS page — Official BNM source. Supports that CCRIS records financing and repayment history over the past 12 months; tax filing itself is not described as directly affecting a credit score.
• Maybank Personal Loan source — Supports that self-employed applicants may be asked for the latest Form B with official tax receipt and bank statements.
• Bernama report on Gig Workers Act 2025 / Act 872 — Published 31 March 2026. Supports the current gig-worker context and the reported 1.64 million gig workers covered by the Act.
• Malaysia Gig Workers Act 2025, Act 872 — Official law text. Supports current legal terminology and definition context for gig workers.