What is Freelancing? How Does it Work in Australia?

Freelancing is a form of self-employment where skilled professionals sell services to clients for a set fee or hourly rate.

Freelance: meaning and definition

“Freelance” refers to work performed by individuals who sell their skills, services or expertise to clients or companies on a project-by-project basis for an agreed project fee or hourly-based rate. The project’s scope determines the contract’s length, and contracts can vary from very short-term to ongoing.

Freelancers are self-employed independent contractors and are usually sole traders under an Australian Business Number (ABN). Freelancers provide various services, such as writing, graphic design, programming, web development, photography and marketing.

» MORE: 5 Things to Know Before Starting A Small Business

Different types of freelancers

Some of the most in-demand freelancers include:

Writers
Editors
Graphic designers
Photographers and artists
Content creators
Branding specialists
Communication Strategists
Social media managers
Marketing/PR consultants
Web designers and developers
Programmers
Translators
Virtual assistants
Business coaches.

Freelancing isn’t limited to creative services and business. There are freelance accountants, personal trainers, hairdressers and health practitioners. ‘Consultant’ is an equivalent term used by some professions.

» MORE: 25 Ways to Make Money Online, Offline and at Home

How freelancing works

When you think of a freelancer, you may conjure up scenes of a writer in a bustling city café sourcing material from the conversations swirling around them or a graphic designer under a Southeast Asian beach umbrella with their lap as their desk. Or maybe a programmer cosy at home — fixated on his multiple screens, armed with energy drinks and coding late into the night.

These aren’t just stereotypical depictions of freelance life. For many — approximately 8.3 per cent of Australia’s workforce of independent contractors[1] — freelancing has become a reality. And that figure represents a rise of 8.5 per cent[2] in the number of freelancers since 2010.

Advantages to freelancing

As a society, we’re coming to terms with the stresses and often unrealistic expectations of modern work and seeking more balance with the other parts of our lives.

Freelancing lets you design your work around your life, not the other way around. As your own boss, you dictate the terms — when you work, how long you work, what you work on, who you work with, and where you work.

The freedom to design your schedule, choose clients and pick projects is also a double-edged sword. There is no roadmap or set trajectory to follow, sometimes making it feel like a ‘choose your own adventure’ career.

Disadvantages to freelancing

There’s one important caveat, however: it’s not all cafes, beaches and couches, and going from employee to solo entrepreneur is not for everyone. It can be lonely, monotonous and stressful because you’re responsible for everything.

As a freelancer, you’re not just a writer, designer or coder — you’re also the accountant, head of marketing and project manager, responsible for customer service, quality control, and operations, so you need to wear many hats every day.

Freelancing vs. other types of employment

When defining freelance work, it’s also helpful to understand what it’s not and how it compares to other types of employment.

Freelancing is not:

Salary work. It can involve a recurring contract, but it’s not salaried work with benefits such as superannuation, sick leave and public holiday pay.
An employer-employee relationship. Freelancers and clients are project partners.
Sitting on the beach sipping margaritas. Successful freelancers are driven, disciplined people operating a business.

How freelancers get paid

Unlike a fixed salary that goes into your account every week or fortnight, freelancers send invoices for their completed work as partial or full payments before the project begins or at sign-off.

The contract outlines the payment terms, which the freelancer usually prepares and sends to the client. Freelancers are responsible for their own tax, superannuation, insurance, operational expenses, and holiday pay. These expenses are factored into the overall hourly cost of services.

For example, a $50 hourly rate might seem lofty but once you’ve factored in the 9% super, 10-30% tax, expenses, holidays, and sick days, you soon realise it’s not $50 in your pocket. Remember, the rate also reflects your own industry experience and, with that, the ability to do the job better and faster.

» MORE: How to Pay Tax as a Sole Trader

How to find freelance jobs

The best part about freelancing is it opens you up to the global economy. Starting out, it’s helpful to focus on a geographical area to build your network in before applying for projects anywhere.

The most common ways to find freelance gigs are:

Word of mouth and referrals

For new freelancers, your best bet is to reach out to your network. While this might be your first time freelancing, you’ve been in the workforce for years and should know colleagues and clients you can call on.

Connect with your ex-colleagues and acquaintances and let them know you’re freelancing now.

Networking

For many people, especially creatives, networking is unnerving. But you can find your own way to network. You can meet a potential client one-on-one for coffee or bring a freelance friend to an event for moral support. Network in a way that feels natural to you.

Social media

Let the world know you’re freelancing, but don’t try to be everywhere online. Pick one or two social media platforms you can invest in, where your potential clients spend time. LinkedIn, Twitter, Instagram, and Facebook Freelance Groups are great places to start.

Job boards

Many job listings exist on platforms such as UpWork, Behance, and OzLance. While there are thousands of opportunities on these platforms, you have to apply for each project and build your profile.

The danger with these websites is the low rates and the transactional nature of these projects. Freelancers rarely have the opportunity to build a real, long-term relationship with these clients, as the platform acts as the middleman.

» MORE: Working From Home? Know Your Tax Deductions

How to make freelancing work for you

You won’t have it all figured out on day one. Start small with one client and get yourself out into the freelance world. Pay attention to what you like doing, who you enjoy working with, when you’re most productive, and what issues you’re coming up against.

Create a website, work on your social media profiles, set up your software (accounting, project management and CRM) and prepare a one-page introduction you can send to prospects. Build up your portfolio, invest in a mentor, talk to an accountant and find professional resources. The sooner you realise you’re running a business — and not ‘just freelancing’ — the better.

Most importantly, believe you can do it. Businesses need good freelancers.

Australian Bureau of Statistics, “Working arrangements,” accessed April 21, 2023.
Self-Employed Australia, “Independent Contractors: How Many in Australia?,” accessed April 21, 2023.