Product Category Icon

Freelancing Guide: How to Freelance Like a Pro

Protect your interests and ensure you are properly compensated. Our documents are for anyone providing services, from babysitters and freelancers, to contractors and consultants.

Category Featured Contract Icon

Step 1

Service Agreement

A Service Agreement outlines the terms of a given service between a service provider and customer.

Category Featured Contract Icon

Step 2

Independent Contractor Agreement

An Independent Contractor Agreement is a written contract that spells out the terms of a working relationship between an independent contractor and a ...

Category Featured Contract Icon

Step 3

Consulting Agreement

A Consulting Agreement is a contract involving a consultant and a client, where the consultant offers their services to the client in exchange for com...

Last updated May 10, 2023

Written by

Reviewed by


Fact checked by

Is freelancing a career or a side hustle?

Is it true that freelancers are happier than employees?

In all honesty, your business is what you make of it! Use this guide to learn the tips, tricks, and legal documents that will help you get started as a self-employed worker.

If you’ve already got one foot in the door, read on to discover how to transform your freelancing hustle into a profitable business. After all, who wouldn’t be happy earning a living by doing what they love?

What is freelancing?

Freelance workers are people who work for different employers at different times instead of being permanently employed by one company.

Basically, freelancers are self-employed—which is a term that can apply to many types of workers, such as consultants and independent contractors. While freelancers and consultants typically sell intellectual services, the term independent contractor is more commonly used to describe a type of physical labour. What all these types of workers have in common is that they are self-employed and not employees.

The law treats employees and self-employed people differently. Courts or employment tribunals are often called upon to decide which of the two categories a worker belongs to. This is because it's typically more advantageous to an employer to have a worker classified as an independent contractor and more advantageous to the worker to be classified as an employee.

Provincial and territorial legislation for employment and labour standards generally describes an employee as a person who:

  • Works for or supplies services to an employer for wages
  • Receives training from their employer
  • Is entitled to things like leave, vacation, standard hours, and more

The legal definitions of ‘employee’ vary from province to province. In some cases, there are no explicit legal definitions for freelancers or independent contractors. Thus, if a court or tribunal is called upon to make a judgment, it will decide whether the worker is an employee or not an employee.

It’s important to know your legal employment status, as it impacts your rights as a worker and the benefits you may be entitled to.

What rights do freelancers have?

Unfortunately, because freelancers are typically considered to be self-employed business owners, they’re not legally protected in the same way as employees.

Although parts of the Canada Labour Code on Occupational Health and Safety apply equally to employees, non-employees and the general public, Part III of the code on standard hours, wages, vacations and holidays applies only to employees.

Similarly, each province and territory has Employment Standards or Labour Standards that only apply to employers and employees.

Thankfully, there are pieces of legislation that can safeguard your legal rights and entitlements:

  • Human Rights: The human rights codes broadly define employment situations in order to apply to different situations. As such, the human rights code in your jurisdiction can protect your right to equal treatment in the workplace, without discrimination. However, the grounds for discrimination vary depending on where you work and live.
  • Workplace Safety: The federal Occupational Health and Safety (OHS) Regulations generally apply to all workers, whether an employee or non-employee. This legislation helps prevent injury or bodily harm to working people. Likewise, the provinces and territories have their own OHS boards that enforce safe working conditions for all. Check your local OHS board to see if you qualify for coverage as a self-employed worker.

Further, you may be able to opt-in to programs that typically only benefit employees. For example, employers are legally required to contribute to Employment Insurance (EI) and the Canadian Pension Plan (CPP) on behalf of their employees.

Read more about how to contribute and benefit from these programs as a self-employed worker in the personal protection and tax sections of this guide. 

Getting started as a freelancer

Now that you know your rights as a self-employed worker, there are some things you’ll need to research and get ready before you can start looking for work.

As you start developing your new business, it helps to create a Business Plan that outlines your goals and the steps it takes to achieve them. That being said, even someone freelancing as a side-hustle can find value in a Business Plan.

Some common first steps are securing the right qualifications, researching your competitors, and establishing yourself within your target market.

Securing the right qualifications

Depending on your profession, you may need to get a license, permit, certificate, or another qualification before you’ll have any credibility as a worker or a business.

The legal requirements for operating your business may vary depending on your line of work and where you operate. For example, if you’re an independent contractor that works with hazardous material, you’ll likely need specific training and authorization to comply with federal and provincial OHS regulations. Clients may also want to confirm if you’re a registered licensed professional before they trust you with a job.

Even if your profession doesn’t have any legal requirements, furthering your education gives your clients assurance that you know what you’re doing. Whether it’s signing up for a complete course or taking a few classes online, be sure to expand your knowledge and skills in your field of work.

What’s more, you should purchase the equipment you’ll need to operate your business. For instance, you may need vehicles, tools, or certain pieces of machinery to help you get a job done. Or, if your work is intellectual, you can set up a home office with a functioning computer, updated programs, and helpful software.

Standing out from your competitors

Research the competition in your field and in your target market. The competition may change depending on if you’re selling your services online or trying to reach a certain geographical location. In any case, it’s crucial to know how you measure up to competitors if you want to stand out to clients.

For instance, are there any gaps in your competition’s service that you can fill? Will you offer reduced rates or charge higher based on better quality services?

Chances are that your clients are looking at all of their options, so it pays off to know what you can leverage in business negotiations.

Creating an online presence

Establishing an online presence is essential for any self-employed worker in this day and age.

Whether you create a website or a simple social media account, give your clients something to refer to for important details about your work. Include your contact information, experience, portfolio examples (if applicable), and customer testimonials. 

From idea to establishment, give yourself a framework to follow:

Selling your services

Once you’ve got everything you need to start working, you can begin looking for clients.

How to sell your services to businesses

A self-employed business owner might establish themselves as a sole proprietor. A sole proprietorship is a legal business structure in which an individual owner is responsible for the business’s decisions, taxes, liabilities and other obligations. Many freelancers start out as sole proprietors.

You can operate your business under your personal name, or you can come up with an official business name.

It’s certainly possible to sell your services without an official company name (especially if you’re offering intellectual services, such as freelance writing). In this case, most jurisdictions in Canada don’t require you to register your business. You’ll be able to bill clients directly and deposit payments into your personal bank account.

Alternatively, you can register your business with a different name. This might make more sense if you’re a contractor and want the company name to reflect what your business is about (e.g., Richard’s Home Renovations). Be sure to check what government regulations may apply to your business in this case. For example, you may need to register your business and create a business bank account.

Once you’ve decided what name to operate under, you can start advertising your business. In addition to traditional advertising and sponsored social media posts, there are a number of websites you can use to list your services for sale.

Read more: Should I Incorporate My Business?

The pros and cons of freelancing websites

There are many apps and web platforms that can connect service-based businesses to prospective clients and customers, such as Upwork, Fiverr, Toptal, and

But which one is the best fit for you?

Before you make a decision, consider the following benefits and limitations of freelancing websites:

Pros Cons
Convenient, accessible, and easy to navigate High competition for typically short, one-off tasks
Regulations to help prevent scams or fraud Website service fees (e.g., a site may take 10% - 30% of your earnings)
Rating systems for both workers and clients Potential wait times for getting your payments from a platform
Automated contracts Limited ability to customize contracts (e.g., changing terms for intellectual property ownership)
Support teams that help facilitate positive work relationships International markets can drive competition and reduce the availability of worthwhile projects

Freelancing platforms give emerging professionals the chance to grow their client base, portfolio, and reputation. You can search for a site that specifically serves your field of work, or you can start out with a large platform that connects clients to workers in hundreds of different categories. Either way, you’ll need to research which platform works best for your particular situation. Keep in mind that some platforms pay in US dollars.

Once you’re a bit more established, try to avoid relying on these sites for work. If you can earn those references from satisfied customers, you’ll be able to find clients on your own through word-of-mouth and online reviews. In turn, this can give you more higher-paying clients and worthwhile projects.

Protecting yourself and your work

A written contract is crucial for self-employed workers. Although freelance work can be casual, it’s always important to document the terms and conditions of a working arrangement to prevent disputes and protect your work.

Ensure you have a signed Independent Contractor Agreement or Service Agreement before you start work. If a dispute does arise with your client, it’s much harder to legally enforce a verbal or handshake deal because the terms of the arrangement are difficult to prove.

Service Agreements, Invoices, and insurance plans all play a part in protecting your best interests when self-employed.  

Create a contract

A contract establishes your rates and sets expectations about the level of services to be provided. If applicable, it can also confirm ownership and use of any intellectual property (IP).

LawDepot offers a variety of Service Agreement templates that you can customize for each client project that you take on. Simply answer our questionnaires to create the documents with the terms that you need. For instance, our templates allow you to address these essential clauses in your contract:

  • Scope of work
  • Pricing and payment schedule
  • Deadlines and delivery methods
  • Terms for cancellation
  • Copyright and ownership
Use a contract to set the terms of a work agreement with a client

LawDepot also offers contracts (some in both English and French) that further protect information and IP used during a working arrangement:

Use these contracts to elaborate and expand on clauses that may be mentioned in your original Service Agreement, or to give a client a license to use your IP.

Document the services rendered with an invoice

Invoices are crucial for proving income when self-employed. Although you won’t need to send in your invoices when filing your income taxes, you must be able to provide proof of your income if the Canada Revenue Agency (CRA) asks to see it. This is a legal requirement in Canada. 

Keep track of simple transactions

Once your business takes off, you’ll have less time for manual invoicing and billing. Instead, you may want to invest in accounting software that automates the process for you.

Alternatively, if you have the funds, you could hire an accountant. An accountant might also be useful if you’re unfamiliar with filing your taxes as a self-employed worker.

Insurance and worker’s compensation

If you’re a self-employed worker that meets eligibility requirements, you can register for employment insurance (EI) benefits and pay EI premiums on your yearly income tax returns. You won’t get regular employee benefits (like when you’re available to work but can’t find a job), but you’ll still be able to secure your income in certain situations (like when you need to take time off after having a child).

There are also individual life and health insurance plans that you can pay into, which may be more affordable than paying upfront costs when you need urgent care or support. These plans can supplement public coverage so that you can save money while still safeguarding your health.

Likewise, you may be able to apply for worker’s compensation coverage from the OHS Board in your province or territory. Typically, only approved industries are covered, and you’ll need to pay an annual premium based on your self-employment earnings. But if you work in a field that occasionally puts you at risk of injury, having this coverage can give you peace of mind.

Further details about personal coverage in your jurisdiction are listed here:

In addition to securing your income in different situations and being able to afford healthcare, you can get liability insurance to offset the costs of potential legal battles. For example, you may be held accountable if your service or product causes injury or property damage. In this case, liability insurance can cover the legal costs and payouts.

Freelancer and Independent Contractor Unions in Canada

Finally, for further protections, freelancers can join unions that advocate for and defend their rights and entitlements. These groups may also offer training, benefits packages, legal advice, and more.

For example, the Canadian Freelance Guild caters to professionals in varying fields, including writers, designers, developers, analysts, and more. That being said, there are also union groups with more of a niche focus, such as the Writer’s Union and the Graphic Designers of Canada

Filing taxes as a freelancer or independent contractor in Canada

As a self-employed worker, you’ll file taxes a bit differently than the average employee, for instance:

  • You report your self-employment income on your personal tax return (a good rule of thumb is to set aside about 25% of your income for taxes)
  • You have options to deduct certain business expenses
  • You can make contributions to your Canadian Pension Plan (CPP)

Don’t put off bookkeeping tasks until tax season. Be sure to keep accurate records of your income and business expenses throughout the year.

Getting paid in an international currency

When working for international clients, you may get payments in something other than Canadian dollars. To report any foreign income on your tax return, first use an accredited bank’s exchange rate to calculate the value in Canadian currency. Next, report your foreign income on line 104 of your T1 form.

Charging GST/HST and PST

If your business brings in an income greater than $30 000 a year, you’ll need to register for a GST/HST account with the CRA.

You should charge and collect these goods and sales taxes from your client, although the rate of tax you charge depends on the jurisdiction in which your client resides. For example, while the provinces and territories have varying tax rates, some goods and services are zero-rated (i.e., 0%) across Canada.

Visit the CRA website for more information on charging, collecting, and paying GST/HST.  

Note that if you’re working for an American client, you do not charge US sales tax.

Business write-offs

Self-employed business owners have a myriad of expenses they can deduct from their income taxes. For example, you may be able to subtract the following items:

  • Advertising
  • Finder’s fees
  • Food, beverage, and entertainment costs incurred while working
  • Professional licenses and membership fees
  • Office supplies and expenses
  • Administration fees (including legal and accounting costs)

Read more about self-employed business expenses, or talk with an accountant to see what applies to your situation. The CRA also offers a free Liaison Officer to help any small business owners or self-employed individual understand their tax obligations.

Canadian Pension Plan contributions

Typically, employers and employees split the premium costs for the Canadian Pension Plan. However, as a self-employed worker, you’ll need to pay the full premium.

You can use the CRA’s Schedule 8 form to calculate your contributions based on your earnings in a year. 

Turning your side-hustle into a full-time career

A freelance job might start out as a side-hustle, but if you put in the effort, you can turn your passion into a full-time career.

To sum up the points in this guide:

  • Get a good understanding of your rights and obligations as a self-employed worker and make a business plan
  • Invest in yourself and your business by getting a good education, the proper qualifications, and the equipment you’ll need to work
  • Spend time providing quality services to your clients and building positive relationships with them
  • Use contracts, stay on top of bookkeeping, and opt into programs to protect yourself and your work

It takes hard work, patience, and dedication to chase your dream job. Challenges will inevitably arise. However, by following these tips and laying a strong foundation for your business, you’ll increase your chances of success.

Join over 10 million people who use LawDepot

  • Trust List Image


    Create unlimited customized legal documents

  • Trust List Image


    Securely save your documents and access them any time

  • Trust List Image


    Call our free help center with technical support questions

Start for free

Table of contents