Hidden costs of working from home
Tan Jee Yee 
Working from home has its perks, but it comes with a few hidden costs one should be privy of – Freepik

WHEN Chia Hui Choong, freelance copywriter and mother of one, plunged into the freelancing world almost four years ago, she expected her household expenses would be lowered. 

“I don’t need to drive to work anymore, and since I used to work smack in the middle of Kuala Lumpur, my food and parking expenses are always pretty high,” she tells FocusM.

I would say that there are hidden costs that freelancers and people who work from home need to be aware of, says Chia

A year later, while doing some calculations with her husband, she found that their monthly expenses had not changed. They were still spending close to the same amount as when Chia was employed in a company. It wasn’t the big increase in savings that they both had expected.

“It’s strange, because you’d think that not commuting daily to work and not needing to pay for KL food prices, I would be able to save a lot more each month,” Chia ruminates. “But I still end up with almost the same amount in expenses each month. As I get paid less being a freelancer, this is quite concerning.

“So, really, working from home is not as costless as one would imagine. I would say that there are hidden costs that freelancers and people who work from home need to be aware of,” she says.


A freelance country

Freelancing may soon take over a majority of the workforce. In the United States, the Freelancing in America 2017 study by freelancing platform Upwork found that 57.3 million Americans are freelancing (36% of the US workforce), contributing about US$1.4 tril (RM5.46 tril) annually to the economy, an increase of almost 30% since 2016.

Malaysia is fast catching up with the freelance trend. The Employees Provident Fund (EPF) reported in August last year that the Malaysian freelancing economy has grown by 32%. The world’s largest freelance site,, stated that Malaysia is the third largest freelancing market in the region.

What more, we can expect more freelancers in the future. A survey by INTI International University and Colleges revealed that 68% of its 300 respondents chose freelancing as their first choice of work, despite the availability of full-time jobs.

Flexibility seems to be the main reason for the freelance life. Respondents of the survey listed flexibility over projects and working hours as their primary factor for avoiding getting a traditional job. Flexibility was also the reason why Chia opted to work from home, so that she could focus on her child.

She was prepared for the inconsistent cash flow and the occasional scarcity of projects, but what she didn’t expect is that working from home entails a certain cost she wasn’t aware of. “People, including myself, often forget that you’re essentially setting up an office at home, and running offices cost money,” she says.

With more of us going to become freelancers with hopes of working from home, perhaps being privy to its hidden costs would be important.


Office-at-home expenses

The household expenditure that immediately went up for Chia was her electricity bill. Her terraced house, which she says faces the sun during mornings and afternoons, meant that she would often have to turn on the air-conditioning in order to work comfortably. “My desktop computer being turned on continuously probably didn’t help as well,” she says.

Chia also found that office supplies she took for granted – paper, folders, pens, etc – also ate into her expenses.

It’s not just office supplies that adds to the cost; computers and laptops also account for the hidden costs of freelancing. These are typically equipment provided by the companies one works for, but for freelancers, it would be additional expenses.

Edward Low Wun Shern, a freelance graphics and website designer, learned this the hard way.

Low, who left his design company two years ago, found that his rather old laptop computer could not handle the more advanced software he requires for work. “In my old company, every software and hardware is provided. I realised soon enough that I would need to purchase my own or risk losing my clients,” he says.

In my old company, every software and hardware is provided. I realised soon enough that I would need to purchase my own or risk losing my clients, says Low

He spent more than RM10,000 of his savings in order to purchase the computer and software needed to run his business. Because he purchased a desktop computer, Low had to purchase a tablet so that he could showcase his designs when he meets his client. “Some design software needs an annual subscription, something I wasn’t aware of until I set out on my own,” he adds.

Low also had to frequently fork out additional cash for computer maintenance and upgrades. “Hard disk space is always a problem for me. We used to have a large server at the office, so it was never an issue back then. Now, I always have to buy additional external hard drives to store data,” he says.


Other unexpected costs

On the subject of technology, another hidden cost would be the Internet. Low discovered a few months into his freelance career that his old Internet plan was far too slow for him to efficiently upload his work to his client.

“I had to upgrade to the more expensive Internet plans, otherwise things will take too long. Needless to say, this added quite a bit to my monthly expenses,” he adds.

Foong Li Mei, a freelance writer and infographics designer, similarly considers the Internet as a hidden cost. “This is dependent on the type of work you do, of course. I have to upload and download large graphic files for design work so a good Internet would be a lifeline for me,” she says.

This becomes a problem as the area of her residence does not have fibre Internet, causing her to pay more for mobile Internet data, as mobile Internet speed is faster.

Foong states another hidden cost most aspiring freelancers are not aware of is medical bills. “As freelancers, we definitely don’t get to claim our medical bills, or even dental or spectacles allowances that permanent employees have.

“So we may even need to upgrade our health insurance coverage to a more expensive package, just in case we fall seriously ill. There were even times when I was reluctant to get medical treatment because it’d to come out of my own pocket,” she shares.

Low adds another hidden cost he says freelancers tend to neglect - taxes. “It’s not just the fact that you need to file taxes now, but there’s also the accounting aspect. Because I’m not good with numbers, I have to hire a freelance accountant to help do my books. That’s a cost I didn’t expect as well,” he points out.

Sometimes even the most unassuming thing can add up to heavy costs. For Chia, it was food. “Once things got busy, I had less and less time cooking. We would order food deliveries, or sometimes I would drive out to buy hawker food. In the end, it’s not much different from when I was working in the city,” she says.

Travelling cost is another aspect she didn’t consider. Chia needs to meet clients on a regular basis, which may require her to call for a taxi or drive out to the city. “It’s definitely not as bad as needing to travel to work daily, but sometimes you get a few meetings in succession, and if I don’t plan my commute with my husband accordingly, I might have to pay for high taxi fares,” she says.

She doesn’t regret switching to the freelance life, as work flexibility is still vital for her. But it does teach her the importance of budgeting and research before giving freelance a try. “Make sure to do your research on the costs of working from home, otherwise you might be shocked, like me.”

Foong says that, in spite of the hidden costs, she still does save on other areas, such as petrol, parking, toll, having meals outside and needing to shop for more work clothes. It does keep her away from traffic jams, after all. “It will take a lot of hidden costs, or a really great office job, to get me to stop working from home,” she concludes.

Lowering the hidden costs

IN order to lower the (hidden) costs of working from home, freelancers often have to change their lifestyle and take necessary measures.

For Foong Li Mei, it means working without air-conditioning, and also doing her best to stay healthy.

“I know friends who are sick almost every week. I definitely cannot afford that, so I try to stay healthy as best as I can,” she says, adding that cooking and eating at home more often helps.

For Chia Hui Choong, it’s about budgeting appropriately. “I made calculations on my monthly work expenses and set a budget. I also set aside a budget for more unexpected work expenses, like when I’m required to travel multiple times as part of a project.”

She also incorporated certain practices from corporate life and set stringent budget limitations on herself. “I may not need to file for an approval to a boss, but I try and make myself the harshest critic over any office expenses I made,” she says.

Chia has been attempting to cook more, which helps lower costs. But she found that she saves the most when she starting practising more practical ways to ration her work supplies. “Things like reusing print papers, printing two-sided and going for cheaper products do help,” she says. She has also been limiting her air-cond usage.

“You need to make sacrifices. I took a few of my expenses for granted because a corporate job meant a higher salary. I sacrificed a better pay for flexibility, so I now I have to sacrifice some lifestyle choices if I want to keep my work costs lower,” she concludes.

Edward Low Wun Shern, on the other hand, has taken to develop habits of setting aside a “work funds” savings. “I put aside a little of my earnings for these ‘surprises’. I don’t think I am able to foresee all the hidden costs of working from home, but if I prepare enough funds for it, I can mitigate the shock,” he says.

Low also cuts his monthly costs in other areas, like going for cheaper but equally reliable hardware if he needs it, as well as optimising his time if he does travel out to meet with clients.

This article first appeared in Focus Malaysia Issue 275.