Freelancing sounds like a breeze. You’re your own boss, you decide your hours and you don’t get involved in office politics? Well, sort of. Undoubtedly, more and more of us are building careers that are based on freelance or contract employment, but it isn’t all plain sailing, explains freelance writer Liz Caxton.

Not all of us are cut out to struggle up the corporate ladder. Some of us are incapable and some are perfectly capable but simply don’t want to. Years ago, my grandfather told me that nobody actually liked their job: they had to work to pay the bills. Yes, a scary fact of life, but one that I’ve never really wholly subscribed to. Working in a well-paid, but dreadful job to live is a desperate way to spend your life, as far as I’m concerned! I would much rather earn less, but feel as if I had some control over my own life. Still, that’s just me. Hence, there’s no Rolex on my wrist and Merc in my garage.

Successful Freelancer = Successful Networker

While freelancing is by no means perfect, it can offer a career unparalleled in the non-freelancing workforce. Within reason you can decide the hours you work, you are very nearly your own boss and can easily body-swerve any office politics. There is, however, one very important factor in successful freelancing: you must be able to sell yourself and what you do and you must be able to network your pants off.

Freelancing can be on a short or long term basis. Some industries, most commonly the IT industry, tend to refer to this type of arrangement as ‘contracting’. Skilled technicians are employed for a set period to obtain a specific goal. From an employer’s point of view it works well: no sick pay, no holiday pay and no skills training to fork out for.

Who Freelances?

In an ideal world we could all sashay in and out of assignments on a freelance basis, but unfortunately this isn’t an ideal world. Whilst the areas of freelance possibility are increasing, some professions are more suited to freelance work than others.


Designers, (graphic, textile, product, etc)

Editorial types (writers, journalists, editors, proof-readers, etc)

Nurses and most health care workers

IT specialists (particularly those with skills in networking, e-commerce, programmers, help-desk)

Hospitality/Tourism workers (tour guides, waiting staff, customer service, bar staff, etc)

Teachers, both school and TAFE teachers

Musicians and singers (session and teaching)

Artists (cartoonists, illustrators, graphic, etc)

Fitness/gym instructors and sports coaches

Counting the Dollars

For the past three years Claire Webster has worked as a freelance graphic designer. “As a freelancer you can usually demand a higher hourly rate than your full-time counterpart, but with your higher rate goes the assumption that you will require minimal ‘settling in’ time. You must be able to slot in and get on with the job within the minimum of disruption to the team around you,” warns Webster. “To remain employable you must keep your skills up-to-date and relevant.”

If you have ‘incorporated’ your own company through which you are paid, then your employer/client will settle your fees as a gross amount. You will then be responsible for making all the legally-required deductions. However, as many freelancers don’t run their own incorporated businesses, employers will deduct tax from a freelancer’s gross and make the legal superannuation contributions on their behalf.

The main benefit of running your own incorporated company versus freelancing as ‘yourself’ basically comes down to the level of tax you pay. Corporation tax being currently below the highest rate of personal tax. However, with shift towards freelance and contract work, the Treasury has recently released guidelines that state that if more than 80% of your total income is derived from one organisation you may have to pay tax at the highest personal rate. Speak to your accountant to determine which business model suits your situation best.

Legally Speaking …

Most freelancers work outside the award system and so are not covered by current employment legislation. “To ensure that you get what you originally discussed, insist upon a signed contract with your client,” advises freelance copywriter Jill Carpenter. “To save on precious funds, I got a basic ‘template’ contract drawn up with a lawyer when I started freelancing, which I adapt for each assignment I undertake.”

This document should clearly define what is expected of you and of your client, and should include your payment terms. Getting paid can be one of the toughest aspects of freelancing! Some freelancers have even been known to employ debt collectors on their behalf to collect what’s owed, but don’t let that put you off – it’s only money after all!

Manage Your Money

Financial management is an important part of freelancing. As soon as you quit your full-time job you also quit your regular pay cheque. In the initial period of freelancing, you must be able to survive financially assuming you have very little work on – or that you haven’t been paid yet for work you have done. Carpenter has been freelancing now for a little over three years: “Initially I wasn’t prepared for the enormous swings in my bank balance,” recalls Carpenter. “But after eight months or so, it began to level out – thankfully!”

In addition to giving up a regular pay cheque you have also given up your sick pay entitlement. Now, nobody ever thinks they’re going to get sick, but there are times when it happens. Prepare in advance for the eventuality by regularly putting some money away to cover your lost income.

Income protection is another aspect of financial management you should seriously consider when freelancing, talk to a financial adviser about how best to protect yourself financially.

It’s not all news bad on the finance front though; freelancing often enables you to claim expenses you can’t as a full-time employee. You may be able to claim part of your rent, your phone and power bills and travel if your office is at home. Unfortunately, the Tax Office will require detailed logs of your expenses before they will allow a claim.

“Meet with an accountant before you start freelancing to find out exactly what records you should keep,” Webster advises. “In my first year of freelancing I left it until ‘tax time’ and was told I couldn’t claim for certain things because I hadn’t kept sufficient records. I put it down to experience, but now I make sure it can never happen again!”

So, freelancing is not exactly a breeze, but it can offer a very satisfying career. Sure, you have little job security, your workload is unpredictable and you have to be vigilant with your record keeping. But on the bright side you get to ‘walk in and walk out’ without the inherent stress that goes with many full-time positions. You have a greater control over how you spend your days – which to us corporate ‘opted-outers’ is the biggest bonus! You don’t have to get weighted down with office politics. And finally, if you’re really good at what you do and make sure everyone knows it, you could earn significantly more than your full-time counterparts.