At what point does incorporating your side hustle actually save you money?



If you're a freelancer, creator, or gig worker, staying as a sole proprietor means your personal tax rate could eventually hit up to 30%. Incorporating as a Sendirian Berhad (Sdn Bhd) can unlock corporate tax rates as low as 15%. But incorporating isn't just a paperwork change, it means giving birth to a new legal entity with stricter governance and annual compliance costs.



Renganathan Kannan, Executive Director at TRATAX, joins BFM to do the math. He breaks down the exact "cut-off point" where the tax savings of a Sdn Bhd finally outweigh the RM10,000+ in annual compliance fees (Accountant, Company Secretary, Auditor, Tax Consultant).



Learn About: 




The RM400,000 Threshold: Why a statutory/chargeable income of RM400,000 is the mathematical sweet spot where a Sdn Bhd saves you roughly RM17,150 in taxes.


The Governance Tax: The hidden RM10,000 to RM12,000 annual cost of running a Sdn Bhd, and the professionals you are legally required to hire.


CP500 vs CP204: The critical differences between personal and corporate tax instalment plans, including strict estimation rules and margin-of-error penalties.


The Transition Trap: How to properly notify the Inland Revenue Board (IRB) to stop your CP500 payments so you don't get double-billed when transitioning to a corporate structure.


The "Personal Use" Myth: Why taking money out of your Sdn Bhd for personal use isn't free, and how it triggers employment tax or deemed interest.

At what point does incorporating your side hustle actually save you money?If you're a freelancer, creator, or gig worker, staying as a sole proprietor means your personal tax rate could eventually hit up to 30%. Incorporating as a Sendirian Berhad (Sdn Bhd) can unlock corporate tax rates as low as 15%. But incorporating isn't just a paperwork change, it means giving birth to a new legal entity with stricter governance and annual compliance costs.Renganathan Kannan, Executive Director at TRATAX, joins BFM to do the math. He breaks down the exact "cut-off point" where the tax savings of a Sdn Bhd finally outweigh the RM10,000+ in annual compliance fees (Accountant, Company Secretary, Auditor, Tax Consultant).Learn About:&nbsp;<ul><li>The RM400,000 Threshold: Why a statutory/chargeable income of RM400,000 is the mathematical sweet spot where a Sdn Bhd saves you roughly RM17,150 in taxes.</li><li>The Governance Tax: The hidden RM10,000 to RM12,000 annual cost of running a Sdn Bhd, and the professionals you are legally required to hire.</li><li>CP500 vs CP204: The critical differences between personal and corporate tax instalment plans, including strict estimation rules and margin-of-error penalties.</li><li>The Transition Trap: How to properly notify the Inland Revenue Board (IRB) to stop your CP500 payments so you don't get double-billed when transitioning to a corporate structure.</li><li>The "Personal Use" Myth: Why taking money out of your Sdn Bhd for personal use isn't free, and how it triggers employment tax or deemed interest.</li></ul>

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