A  man writes an invoice. Freelancers and gig workers request payment for a good or service and document their business transactions through an invoice. PHOTO/ MICHAEL KAKUMIRIZI


Dividends of formalising your gigs

What you need to know:

In professionalising the gig, working with a registered company is of essence. But there are other basic and overlooked things that would help you formalise your gig like a Tax Identification Number, receipt book and invoice. 

As technology continues to change the nature of workforce, the mode of employment also follows suit.  The gig economy is changing the way people work. More people now prefer temporary contracts, freelance gigs, and short-term projects over traditional 9-to-5 jobs. 

The gig economy is a labour market that relies heavily on temporary and part-time positions filled by independent contractors and freelancers rather than full-time permanent employees. These gigs range from ride-share apps, making deliveries for restaurants, shopping or delivering groceries, counseling and performing errands or household tasks and even one off or short term professional work.

The gig economy involves less commitment for both workers and companies with work executed at agreeable terms.  
The Global Gig Economy Transformative Trends Report 2023 indicates that the gig economy is expected to reach $455.63 billion by 2030, driven by an increasing adoption of digitalisation, changing work preferences, and rising inflation. 

“More than half of the gig workforce will fall within the age group of 28 and 43 years, with the rate of female participation in freelance jobs increasing,” reads the report. 

 The study which explores the evolution of gig work and its current and future value on a global scale citing several factors such as uncertainty about the job market, rising inflation and cost of living, shrinking and expanding demand for delivery services, and Covid-19-induced exposure to work flexibility, has boosted demand for gig work among employees and employers.

While stagnant wages and rising costs of living have put financial pressures on many workers, gig work can supplement full-time jobs with additional income streams.

But there is a debate over what a gig is. To those in the formal sector, their side hustle can be called a gig. To others, that might term themselves as unemployed or jobless, short-term contracts are also part of the gig economy. This means it applies to both people within formal and informal employment.   

Currently, several people are partaking in gigs to supplement their sources of income. This is majorly in the corporate world where the demands outweigh the monthly income and based on the fact that several things have to be catered for. 

It is possible to work with and thrive with gigs and position yourself ahead of other players in the same space.
Mr Malcolm Kiiza, a media practitioner, has been in the industry for more than 20 years. Besides that, he is a counsellor and trainer in effective communication. 

 “I take on counseling and training as gigs. However, I cannot let them interfere with my company work,” Kiiza says. 
So, for those that thrive on gigs, do not forget that they are what they are, gigs! Draw the line. If a gig endangers your primary job, it may not be worth it in the big picture.
In professionalising the gig, working with a registered company is of essence. But if you are a typical “gigger” owning a company may be difficult. According to Kiiza, there is a way around that.
“One of the ways I have handled my gigs consistently is working as a consortium where I let someone else take the lead because they have a registered company.

 He adds: “Despite the fact that I have no registered company to do these gigs, I have also become a commission agent, which means that when I get a gig, I only take 10 percent of the total cost. The rest is for the person who owns the registered company because they incur overhead costs like paying for expenses such as water, power, and taxes among others.”

 “In a gig, networking is important. Plug into the right places and right people. Most gigs come through referrals. So you must do the marketing particularly by word of mouth about say the other things you can do besides your main trade or known skill,”Kiiza says. 

There are other basic and overlooked things that would help you formalise your gig, says Brian Kyalimpa whose main job is an accountant but also does gigs.

“Many clients gave me a gig for as little as Shs500,000 and asked that I give them a receipt for their accountability. I first used other people’s receipts but they charged me for it. I finally went to Nasser road and acquired my own receipt book with my name and contacts on it,” he says. 

A man writes a receipt. A receipt helps a gig worker to keep an account of payment records. This among other things helps the gig worker look professional as  the gig economy involves less commitment for both workers and companies with work executed at agreeable terms.  PHOTO/ MICHAEL KAKUMIRIZI

“After this, I was asked for an invoice book for a different gig. This was paying as much as Shs3 million. I went back to the printer and got the invoice book. This began to make a difference and made me feel different about gigs. It kind of made me take them more seriously,” he says. 

Formalising gigs is now going a notch higher with the taxman tightening the noose around tax payment. At least many formal businesses and institutions even while using one off or irregular and freelance service providers will ask for a Tax Identification Number (TIN) because they deduct withholding tax at source and credit it to a holder of an identification number.

Other employers of “giggers” insist on sending money in the bank. So, even for those that do gigs, having a bank account is becoming a sign that one is orderly and can be relied on.

A  gig worker should have a Tax Identification Number and bank account for credibility purposes. PHOTO/ MICHAEL KAKUMIRIZI

Earning a living from a gig
Alfred Geresom Musamali, a gig worker and retired public employee, left the government service in April 2020. 
“Six years earlier, I had looked around to see what I could busy myself with and make a living from after I retired and realised I had nothing. I didn’t have large plots of land where I could engage in extensive farming, I didn’t have any developed homes or businesses from which I could collect rent on a regular basis, and I didn’t have savings I could put into treasury bills, treasury bonds, company shares, or other market investments that would make money for me as I lounged on the lake shores in the Kalangala islands,” Musamali recounts. 

“I had not even built any ancestral home that I could refer to as a retirement home in my village at Nabumali in the Mbale district,” he continues. But I had accumulated a lot of Proofreading and General Editing (PAGE) papers over the years. I knew people and businesses would need me since they lacked the time, expertise, or motivation to do it themselves,” Musamali said. 

In order to give the recently graduated university student a job and to manage my PAGE gig, Musamali founded International Communications Ltd in 2014 with the help of his wife Safina Nekesa Khalayi, and their son Victo Namuwenge.
“I was able to operationalise myself in the job since all I needed to be reachable even while I was still a public worker was a phone, laptop, and an email account. My ability to provide complementary services was also helpful. For instance, I joined organisations where I could promote myself as a provider of PAGE and associated services.”

Musamali elaborates that he acquired freedom and independence as a gig worker. 
“I don’t have to be confined to a specific office or area before I begin working on your piece. I do not need to confine myself to specific working hours either.

However, to many employers, gig workers enable them save on labour costs in form of payroll taxes and paying benefits such as subscriptions to the National Social Security Fund (NSSF) and health insurance schemes. The employers also let the workers themselves sort out the Pay as You Earn (PAYE), Income tax issues, in addition to saving money for the space that would be rented for the bigger workers’ offices and even for office tea.

But Musamali adds that gig workers are subjected to living from hand to mouth since they lack employment security. 
He says that hell can break out when a gig economy worker hasn’t even made enough money to cover the rent for their residential or business space by the end of the month. 

In addition, some gig workers are tempted to forego basic business formalisation, such as registering a head office, obtaining a Tax Identification Number (TIN), registering for Value Added Tax (VAT), making NSSF contributions, and obtaining trading licences. 

This laxity, he notes,  prevents gig workers from being taken seriously when they submit bids for consulting work, meaning the gig stays unprofessionalised. As a result, it is economically unrewarding.
With gigs, there are frequently no in-person interactions with clients, no written contracts, and no way to enforce payment.

“I have been cheated so many times by clients who claim they need the work very quickly, can only discuss the terms on phone and will certainly remit payment by mobile money. But when I finish the work and forward it to them, they switch off their phones and make it difficult for me to follow up payment,” he explains. 
As a result, Musamali is currently developing a software that will manage all my gig processes. 

“When the software is ready, I will only accept work that has been submitted through the Vicnam website. The clients will be required to subscribe into the website, read carefully the terms and conditions therein, agree to them then upload the work on to the site with the accompanying payment,” he says.

Gig disconnect 
A report by Master Card titled: ‘The Gig Economy in East Africa: A Gateway to Financial Mainstream’ reveals that  access to gig opportunities is often not enough to keep a gig afloat. 

“Loans, instant payments and benefits such as insurance are the top three perks desired by gig workers in Kenya. About 45 percent of respondents said they are willing to pay between $1 (about Shs3,600) and $5 (about Shs18,000) a month for such benefits and services,” reads the Mastercard Gig report.