How to work legally as a freelancer in Australia

Those seeking to become a freelancer in Australia will be happy to hear that it’s perfectly possible.

However, there are some points to consider and steps to take to ensure you’re operating within the law.

For example, you’ll need to register to receive an Australian Business Number (ABN). This enables you to make tax payments on time if your freelance income exceeds certain limits.

Overseas guests of Australia need documentation that entitles them to work as a freelancer, but Australians simply need identification to prove they are an Australian citizen to work legally.

In this in-depth article, we’ll provide a complete guide to working as a freelancer in Australia, so read on to find out which parts apply to your plans.

Selecting the best freelancing business type

Whether you aim to take on writing jobs producing weekly blogs, or are interested in earning money from creating web copy, after you’ve decided to monetise your abilities, you must choose how to go freelance.

The Australian Government requires you to pay tax on any income that exceeds a specific threshold, and you can work as a sole trader as a company or in partnership with someone else.

There are responsibilities associated with each type of freelance business, but also unique benefits. Working as a sole trader is considered by many to be the least complex way to freelance legally in Australia, but you may find that partnering up or launching a company is more suited to your plans.

Sole Trader

When you’re launching a new freelance business, working as a sole trader is an option.

Often referred to as the simplest business model, it involves you taking full responsibility for running your freelance business. As a result, you can decide how much of the money you make that you can use, and bear any losses fully should they occur.

Importantly, when you pay tax, you do this as a single entity, rather than separating yourself and the enterprise you run.

To work freelance as a sole trader, you must obtain a free Australian business number (ABN). Additionally, you can select to register a name for your business name for an extra cost. You can also choose to have dedicated business bank account separate from your personal account.

You’re obliged as a sole trader to keep any records of your freelance activities, like invoices and expenses, to cover a five-year period. If you stop trading as a freelance business, it’s your duty to inform the government inside 28 days.

Limited Company

You can legally freelance in Australia by starting your own company.

A key benefit of forming a company is that unlike a sole trader, it is treated as a registered business entity. This allows the company to pay taxes, incur debts, get sued or sue, record profits and carry out a wide range of other business-related activities, just like an individual.

However, as company director, you must follow certain legal obligations while running your business, under the Corporations Act 2001. Your firm must also register for GST (Goods and Services Tax), after its annual turnover exceeds a set limit.

Acting as company director, you’ll need to comply with your legal obligations and keep correct and up-to-date financial records. By law, you must update ASIC (Australian Securities and Investments Commission) when you make any major changes in your company details within 28 days.


You can select to found a freelance business as a partnership with just one or multiple individuals.

With a partnership, you’ll share the losses and profits with your nominated partners. Partnerships also benefit by being able to pool resources together, which can sometimes ease the transition from a conventional employment role to freelance status.

The Australian government currently recognises three types of partnerships: General Partnerships (GP), Limited Partnerships (LP) and Incorporated Limited Partnerships (ILP).

In General Partnerships, all partners share business responsibility equally. Furthermore, all partners have unlimited liability for their business-related obligations. Commonly, freelancers choose a GP when they play an active role in the business.

Limited Partnerships differ in that each partner’s liability is restricted by how much money they contributed to the partnership. As an LP, you’re most likely a passive investor, who does not play a role in day-to-day business activities.

An Incorporated Limited Partnership is comprised of a minimum of one general partner. The other partners in the ILP hold limited business obligations. If the business fails to meet any obligations, it is the general partner who is personally liable for any shortcomings.

It’s important to remember that if you work freelance as a partnership, you will need to obtain an ABN and a tax file number (TFN). You must also file a partnership tax return annually via the Australian Taxation Office (ATO).

You must also register for GST should your turnover exceed the current threshold. Finally, partnership laws can vary between territories and states in Australia, so ensure you check the specifications for the area you will operate from.

How do you register your freelance business in Australia?

To work and receive payment legally in Australia as a freelancer, an ABN is imperative.

With 11 digits, the ABN is employed to identify you to the government, other enterprises and the ATO.

Freelancers can get their free ABN from the Australian Business Register (ABR), which issues ABNs to businesses.

ABN applications have specific requirements. Freelancers must care for their own clients, have set up a dedicated business bank account, hold business insurance (like public liability or WorkCover) and bill and invoice for any work carried out.

Freelancers that fail to quote their ABN in invoices will find that Australian businesses can legally withhold a payment percentage.

Freelance business taxes in Australia

Some similarities exist regarding reporting taxes as a company or a sole trader. However, there are also some important differences that freelancers should be aware of.

Freelance partnership and sole trader tax

A useful item when launching a new career as a freelancer is that individual freelancers are entitled to a tax-free threshold.

In partnerships or working as a sole trader, the tax-free threshold will apply to you. Anything earned below the set threshold is tax free.

For each financial year, you must lodge a tax return. You can lodge your return by linking to ATO online, via a myGov account.

How much tax you pay depends on whether you earn more than the tax-free threshold, and just how much more.

Freelance company tax

Companies don’t receive a tax-free threshold. They must pay for each dollar their company makes at the current percentage requested. Unlike sole traders, companies lodge tax returns as a separate legal entity.

As a result, when acting as a director, employee or shareholder, they must separately lodge their own tax returns.

Company tax returns lodged must indicate the company’s name, any income tax due as well as deductions. Company taxes are manually lodged by downloading a company tax return form and completing it. The form can then be mailed directly to the ATO postal address based in the state capital city.

Freelancer tax deductions

It’s possible to deduct freelance expenses from your tax owed if you incur expenses that qualify as business-related expenses. These expenses are described as those you would not incur if you had not been operating from a home or business office where you freelance.

Are you interested in working as a freelance writer in Australia?

A freelance career offers an abundance of benefits to those who embark on one.

Rather than being restricted to working from the same office each day, you can carry out your role from home or on the road as you travel.

Instead of the nine-to-five grind, you can keep your own hours and work at the best time to suit your lifestyle or personal responsibilities.
When you work as a freelancer, you invest in yourself, and after you fulfil your legal obligations to the government, can enjoy the profits personally.

Now that you know how to legally operate as a freelancer in Australia, the next step is to find work that suits your skillset. If you have an excellent command of the English language and dependable online access, you can find a wide range of writing jobs available that don’t require you to have experience or a degree.

If you can turn in high-quality, original work to deadlines, we can offer you a various types of online writing assignments. You could be penning weekly or monthly blogs on a diverse selection of topics, or helping improve company sites and e-commerce platforms with engaging web copy and product descriptions. You might find yourself writing press releases or locational landing pages that boost SEO (search engine optimisation).

We are always looking for talented writers who are dedicated to improving their abilities. Once you follow the steps above and can legally work as a freelancer, we’d love to hear from you. Apply to become a freelance writer with us here at Words of Worth Australia today, and launch your brand-new career writing from home.

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