A sole-trader is an umbrella term for anyone who is self-employed, but this can look vastly different across various industries. Freelancers, for example, are just one kind of sole-trader.
What is a freelancer?
Freelancers work for various different people, brands and companies. They generally work on a per-job basis and get paid as such. This means they can work for multiple different places or clients at once, and it’s not even considered cheating (!).
Instead of getting a salary or weekly wage from someone who hires them as a full time employee, they do a job and get paid for the agreed rate on that specific job (set either by themselves or by the person hiring them).
After completing a job, the freelancer (you, maybe?) sends an invoice and gets paid.
While a freelancer might charge an hourly rate for their services, they often do not have to work to set hours, unless agreed with by their client. Generally, freelancers get to set their own hours, and this is usually why they’ve chosen this kind of working life (sleep-ins, long lunches, work-life balance, you name it).
What do freelancers usually do?
Freelance work tends to happen in a lot of creative industries, such as:
1. Writing
This could include writing articles, reports or reviews for news outlets or magazines. Or it could be writing content for a brand, or copy for someone’s social media or website.
2. Graphic design
A freelancer could work for big brands and corporations or help startup companies with their new, exciting logo.
3. Marketing
Instead of developing or using an internal marketing team, a corporation might prefer to freelance this task out depending on the specific project.
4. Public relations
Similarly to marketing, a corporation might hire someone to do PR for their product on a freelance basis, or a small business might opt for a freelance publicist over a big PR company.
5. Photography
Businesses often hire someone to take photos of their corporate events or hire someone to shoot content for their website or socials.
That being said, developers, and IT and HR consultants can all work in a freelance capacity.
Freelancer taxes
Since freelancers work for themselves, they need to sort out their own income tax. This means they have to calculate it first and pop it aside somewhere safe to be paid towards their tax bill at the end of the financial year.
Then, we’ve got GST. If you are set to earn over $75k in the next 12 months, you are required to be registered for it, and charge and collect it from your clients. Which means you’ll need to lodge a BAS regularly. Lots of fun things!
Plus, we can’t forget about the Medicare Levy, student loan repayments (your HECS debt for that ever-handy arts degree), as well as super contributions if you plan on having an enjoyable retirement.
Or, if you’re lazy and not a fan of admin (we get it) you could call on us (that’s Hnry to you) and we’ll sort out all of this tax stuff for you.
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