Self-employed workers now make up over 15 per cent of the Canadian workforce in all types of sectors. Using individual professional skills to gain freelance work can be a great way to pull in extra income, or take charge of your full-time career as your own boss.
With the strong cultural push towards remote contract or project-based working, you may be wondering how to get started with freelancing. In this article, we will cover the basics of freelance work, including the benefits and constraints of freelancing, building a professional network, and possible fields of freelancing.
What is freelancing?
A freelancer is an individual who is effectively self-employed. Freelancers use their unique professional skills to work on their own projects, collaborate on projects with companies, or do contract work for limited periods of time. A freelancer or free agent is not on payroll with any specific company, but rather gets hired on a project-by-project basis. This gives them the opportunity to have more control over the type and amount of work they do. However, a freelancer is also required to personally take on the responsibilities of running their own small business, sourcing their own work, and vetting their clients to make the best business choices.
Flexible, remote freelance work has many benefits, but it also poses a unique set of challenges. Newcomers hoping to break into the Canadian platform economy should be aware of the advantages and disadvantages of freelancing, as well as the added responsibility of managing Canadian taxes and registering themselves as a business.
Networking and the platform economy
Freelancers thrive in what is called the platform economy (also known as the gig economy or sharing economy). The platform economy is one way of building your professional network and gaining exposure for your services. You may already be familiar with the platform economy if you use ridesharing services like Uber or Lyft, food delivery services like DoorDash or Grubhub, or task-based services platforms like TaskRabbit. This term references the renting of personal skills, services, or resources in exchange for monetary payment over a digital platform, like an app or a website. Business registration service Ownr recommends that freelancers look for gig or contract work on online platforms such as Hyr, Communo, Freelancer.ca, Upwork, or Fiverr.
|“The gig economy, as we now call it, has revolutionized creative industries to include far more contract and freelancing work than ever before. Companies tend to hire full-time creative workers less often, instead sourcing out their design, marketing, and other creative jobs to freelancers. Freelancers can also leverage their contract with a company into a more permanent role when the company grows and begins looking for full-time hires.”
– Rob Lawrence, Vice President, Mandrake Human Capital
Social media can also be a free platform to network within your local and professional communities and beyond. Create a separate social media account for your business to share updates on what you are working on, the personality of your business, and connect with others in the industry. LinkedIn, Facebook, Instagram, and Twitter are often used by freelancers to connect with their intended audience.
Tip: Keep your business profiles on sharing platforms up-to-date and grammatically correct – like you would a resume. Respond to requests quickly and professionally for the best chance of securing a contract.
The 5 benefits of freelancing as a newcomer
Flexibility in working hours and location is a prime benefit of being self-employed. If the traditional 9-to-5 office life just isn’t for you, if you live in a remote area, or if you have home and family needs to keep an eye on throughout the day, freelance work may allow you to find a personal work/life balance that suits your individual needs. Whether it be to earn some extra cash or follow a passion, such as photography, many Canadian freelancers actually choose to pursue their individual careers in their spare time outside of their main career.
2. Pursue your passions
Some freelancers also choose to self-employ as it allows for variety and creative stimulation. Being your own boss means that you get to choose the projects you dedicate your time to; if you have options, you can pick projects that are close to your heart and challenge you in new ways to vary up your work schedule.
3. Low entry barrier
As long as you are skilled in your field and you possess the equipment to do your job well, you are theoretically able to start freelancing. For writers or web designers, a laptop might be all you need to get started, which lowers financial opportunity barriers to newcomers in some fields. Registering your business does come with some cost, but newcomers working as freelancers may appreciate the ability to be their own boss in their everyday work.
4. Contract work can be leveraged into a full-time opportunity
Contract work can be a great way to get your foot in the door with a company and show them the skills you can bring to the table. When it is time to hire for full-time positions, companies you have contracted for will already know your name and the quality of work you can produce.
5. Testing your skills as a “solopreneur”
“Solopreneurs” are aspiring entrepreneurs who work individually to achieve their own business goals without hiring extra employees. The goal of many “solopreneurs” is to test the waters to see if there is a demand for their skills and services. Newcomers might find freelancing a good way to test the waters of entrepreneurship.
The possible constraints of freelancing as a newcomer
Expanding your network
The most important part of becoming a successful freelancer is being able to leverage professional connections into employable gigs. As a newcomer to Canada, you may start out with a limited Canadian network, which can be a barrier to spreading the word about your professional skills and limit your business. However, the internet has made building professional connections significantly more accessible to newcomers. LinkedIn is a good starting point for you to build your network. See the top 10 tips to optimize your LinkedIn profile.
No employee benefits
Most Canadian employers offer a set of employee benefits that are managed by the company. These may include health and dental insurance, disability insurance, life insurance, counselling services, and payment into the Registered Retirement Savings Plan (RRSP). As a self-employed freelancer, you will be responsible for procuring these benefits for yourself, which takes extra time and money.
Tracking your own payments
As a freelancer, you are your own marketing, development, growth, and accounting departments, all rolled into one. If you have never freelanced before, you may find it difficult to keep track of the money you are owed. Effective invoicing is crucial, so you may want to enlist the help of an invoicing platform to keep tabs on your finances when first starting out.
5 common types of freelance work
Freelance work options are growing rapidly as new technologies are constantly being innovated to allow new ways of remote working. Writing and art used to dominate freelance work, but it has now expanded to include everything from mobile app development to being someone’s virtual assistant. Here are some of the most common freelancing fields:
1. Freelance writing
Writing is one of the most common types of freelancing jobs since many businesses require fresh written content. Some types of freelance writing include article writing, blogging, creating website copy, social media, editing, marketing, and more.
2. Technology and development
If you possess the right tools and skills, you can freelance a job in tech from anywhere in Canada. Web development, mobile app development, information technology, blockchain, SEO specialization and more can be lucrative for freelancers.
3. Creative work
Photography, audio and video production, graphic design, and other creative fields work especially well for freelancers, as you can choose specific creative projects that interest you.
4. Remote administrative support
Small businesses often source out their data and administration work to contractors. Data entry, virtual personal assistance, and translation services are sought-after skills for remote freelancers.
If you have teaching certifications, tutoring is a versatile form of freelancing that can even be done online. School-age students require tutoring for mathematics, science, and language, but you can also use your tutoring expertise to teach adult professionals important tech skills, language skills, and more.
Tip: If you don’t see your profession in this list, that doesn’t mean you can’t create a freelancing business out of it. As long as there is a demand for your skill, you may be able to freelance many other types of work that are not mentioned here. Be creative and research your field to determine what opportunities are available to you for freelance work.
Registering your freelance business and keeping track of your finances
How to register your business as a newcomer
If your freelance work becomes successful, you may want to register or incorporate your business. If you plan to open up a business in Canada, see the newcomer’s guide to starting your own business. For those who are unsure about the business structure, you can also take the online Ownr business structure quiz to find out which structure might be right for you.
Ownr, an RBC Venture, is the simplest, most convenient way to register or incorporate your business and build your brand. Their database is connected to all the national and provincial registries, allowing you to search 30 business names for free.
Register your business through Ownr, using the promo code ARRIVE60 and get $60 CAD off.
How to invoice as a freelancer
When doing work as a freelancer, it is necessary to create clear, professional invoices with all relevant information for client and tax purposes. List the following information on any invoice from your work:
- Your contact information: your business name, your name, address, phone number, and email.
- An invoice number: each invoice should have a unique numerical invoice code to avoid duplicate payments and keep invoices organized.
- An itemized list: detail all of the products or services you provided.
- The payment due date: indicate when you require your payment from your contractor.
- Payment options you accept: accepting multiple payment options makes it easier for others to pay you.
- Send a receipt after payment: confirm that the invoice has been paid by sending a receipt.
Use an online invoicing platform like Hiveage, Quickbooks, or Hubstaff to easily create and track your invoices. Be sure to send your invoices promptly to ensure quick payment – within 48 hours of delivering your work is a good time frame.
Tip: See Ownr’s Invoicing Basics for Small Business Owners for more invoicing tips.
How much should you charge as a freelancer
When you are self-employed, you get to choose how much you charge for your service. Do your research on skill-sharing platforms to see how much money freelancers are charging for similar services to keep your wage in a reasonable range. Before starting a project with a contractor, take the time to clarify that they are prepared to pay you a designated sum for your work and write it up in a contract. Note if you want to be paid hourly, by project, or on a retainer basis. Some freelancers choose to charge partially or fully upfront, so that they do not have to chase their payment after they have already performed their work.
Tip: Read reviews and speak to industry contacts on possible employers to ensure that they are legitimate and will reimburse you fairly for your services.
How to file taxes in Canada as a freelancer
Any income you receive in Canada must be reported to the Canada Revenue Agency (CRA) for tax purposes. Keep a detailed record of your freelancing income and expenses throughout the fiscal year so that this information is readily available to you during tax season. You will be required to file a Form T2125, Statement of Business or Professional Activities to report any income earned from self-employment. See more on the CRA’s protocols for income tax on self-employed earnings.
One major difference between working for an employer and being self-employed is that instead of having your taxes deducted on each cheque, you will be required to pay your taxes in a lump sum. Prepare by setting aside at least 30 per cent of your income for your taxes and Canada Pension Plan (CPP) contributions.
Tip: Keep your personal and business finances separate by creating a bank account for your business income and expenses. Download a freelance expense tracker app like Sorted to help keep your business expenses organized and save time during tax season.
Freelancing can be a unique opportunity for newcomers to create meaningful and flexible work in their own field, or earn extra money on top of an existing career. Knowing the advantages and disadvantages of freelance work can help you make the decision to become your own employer, depending on your personal work habits, lifestyle, and field of expertise. Being personally accountable for your own employment as a freelancer takes effort, organization, and a strong professional network to find suitable opportunities and professional success.
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