Freelancers

What Is a Freelancer?

A freelancer is a self-employed individual who provides services to clients—often on a project or short-term basis—without being tied to a long-term employment contract. Freelancers operate independently, offering their skills and expertise to one or multiple clients at a time, typically under a business structure such as a sole trader or through an ABN (Australian Business Number) in Australia.

Freelancers are not employees; they are considered independent contractors, which has important implications for tax, superannuation, and workplace entitlements.

📘 ATO: Employees vs. Contractors

Common Industries for Freelancing

Freelancing is especially common in industries that value project-based, creative, or technical skills. Examples include:

• Graphic design and branding
• Copywriting and content creation
• Web development and IT services
• Photography and videography
• Marketing and advertising
• Accounting, consulting, and legal services
• Education and training

With the rise of digital tools and remote work, freelancing is increasingly accessible across nearly all sectors.

Key Characteristics of Freelancers

• Operate under their own ABN and invoice clients for services rendered
• Set their own hours and often work remotely or from a personal workspace
• Negotiate fees and contracts independently
• Manage their own tax, GST, and superannuation
• May have multiple clients simultaneously
• Generally not entitled to leave, redundancy, or award benefits

Freelancers are responsible for their own business and professional obligations, including bookkeeping, insurance, and compliance with ATO requirements.

Freelancers vs. Employees: What’s the Difference?

⚠️ Misclassifying an employee as a freelancer (or vice versa) can lead to serious Fair Work and ATO compliance issues. Businesses must assess the relationship correctly.

Legal and Financial Considerations in Australia

In Australia, freelancers must ensure they meet all legal obligations, including:

• Registering an ABN through the Australian Business Register
• Determining if they need to register for GST (required if turnover exceeds $75,000)
• Issuing tax invoices for all services
• Paying income tax on earnings, often via Pay As You Go (PAYG) instalments
• Managing their own superannuation contributions (though some clients may be required to pay super in certain cases)

💡 Did you know? From July 2022, businesses must ensure super is paid for contractors who are paid primarily for their labour, even if they’re invoicing via an ABN.

Benefits of Hiring Freelancers

For businesses, engaging freelancers can provide:

• Scalability: Add skills quickly without long-term commitment
• Cost efficiency: No need to provide leave, super, or ongoing employment benefits
• Access to specialised expertise: Gain niche skills for specific projects
• Reduced onboarding time: Freelancers are typically project-ready

For freelancers, benefits include:

• Control over workload and schedule
• Freedom to choose clients and projects
• Potential to earn more per hour or project
• Work-from-anywhere lifestyle

Challenges of Freelancing

For Freelancers:

• No guaranteed income
• Responsible for own tax, insurance, and admin
• No paid leave or employee protections
• Must consistently find and retain clients

For Employers:

• Less control over day-to-day availability
• Intellectual property and confidentiality concerns
• Cannot demand exclusivity without formal contracts

Employers should draft clear service agreements that define scope, deliverables, IP rights, and confidentiality terms.

How Microkeeper Helps with Freelance Contractor Management

Even though freelancers aren’t traditional employees, managing their pay and integration into projects still requires attention. Microkeeper helps you:

• Record ABN and contractor details
• Process contractor payments and generate reports
• Track cost centres and project allocations
• Manage onboarding, contracts, and secure document storage
• Use digital clock-in/clock-out tools (if onsite time tracking is needed)

Explore Microkeeper's Contractor Management Tools

FAQs About Freelancers

Can freelancers work full-time hours?

‍Yes, but they should not be treated like employees. Working regular hours under company direction may suggest an employment relationship.

Do freelancers need insurance?

‍Yes, most freelancers need public liability and professional indemnity insurance, especially when working onsite or offering consulting services.

Can a freelancer request superannuation?

‍Generally, freelancers manage their own super. However, if your freelancer is primarily providing labour, you may be required to pay super.

Final Thoughts

Freelancers bring flexibility, agility, and deep expertise to businesses in a fast-changing economy. For workers, freelancing offers autonomy and diverse career opportunities. However, clear agreements, tax awareness, and mutual respect are crucial to making the relationship work.

Whether you’re hiring freelancers or managing contractor payments across projects, tools like Microkeeper can simplify your workforce operations and help you stay compliant.

_{Disclaimer: This article is for informational purposes only and does not constitute legal or financial advice. For guidance specific to your business, consult a qualified advisor or the Australian Taxation Office (ATO).}