Abstract Informal employment constituting a major part of Iranian economy correlates strongly with social deprivation. The aim of the present study is to understand the mechanisms that lead to deprivation and how formalisation can empower informal workers. The study is of qualitative type using grounded theory and thematic analysis. The participants were thirty-two female workers and twelve elites selected through stratified sampling. In-depth interviews were used to collect data. Data were analysed through theoretical coding. The findings indicate that informal occupation is considered as a survival mechanism for women with deficient capital (deficient psychological, social, economic and legal capitals). In other words, women enjoying less power in legal, economic, social and psychological areas enter this domain, stay therein or exit. Based on the findings, informal occupation is a five-stage process where the female workers can be placed according to their status. The phases include pre-awareness, awareness, action, regression and emancipation. Moreover, using the model of formalising social work through empowerment and its tetrad (psychological, social, economic and legal empowerments), the formalising social worker can facilitate the formalisation of workers and their progress towards the emancipation stage, so that the workers could gain more access to the minimum and lowest social protection.