Freelancing in Canada: What Newcomers Need to Know

If you’re new to Canada, freelancing offers a flexible way to build your professional portfolio, gain local experience, and supplement your income. This guide provides essential information on freelancing in Canada, including benefits, challenges, legal considerations, and tips to get started. 

Why newcomers may be interested in freelance work in Canada 

Freelancing can be an attractive option for newcomers to Canada. It offers a flexible way to earn income while adjusting to a new community. Some professionals freelance while they wait to find full-time employment, while others choose to do so in addition to full-time employment to increase their income. Others forgo full-time employment entirely and opt for the freedom and flexibility freelancing offers. If you’re exploring freelancing, here are the pros and cons of working as a freelancer. 

Pros of freelancing   

• Supplement your income: If you have yet to find a full-time job, freelancing can help you earn income while searching for a job. If you have a full-time job but need to supplement your salary, freelancing provides the flexibility to earn more according to your schedule. 

• Build a Canadian portfolio: Taking on freelance projects with Canadian clients lets you gain Canadian work experience and quickly build your portfolio. This is valuable when applying for permanent jobs because it shows you can successfully work within the Canadian professional environment. It also adds to your overall resume. Your local clients can serve as references—if they are happy with your work.

• Expand your skills: Freelancing can offer diverse opportunities to refine your skills, learn industry best practices, and understand Canadian market trends.   

Challenges of freelancing 

Despite its advantages, freelancing does come with challenges, especially for newcomers:  

• Finding clients takes time: Sourcing freelance work can be time-consuming at first. Newcomers have to establish a professional network where they can find opportunities. You must invest time in building that network to find freelance work. 

• Managing admin work: As a freelancer, you are responsible for all aspects of your business, from pricing projects and tracking hours to managing invoicing and payments. 

• Uncertain income: Freelancing lacks the regularity and steady paycheck of full-time employment, as well as the many benefits that employees can get, such as pension contributions, employment insurance, or healthcare benefits. Building a financial safety net should be a priority if you plan to freelance.   

How to become a freelancer in Canada 

If you have decided to pursue freelancing, take the following initial steps to help you set up a successful freelancing practice.  

• Identify your skills: Determine what services you can offer potential clients based on your skills or the market’s demand. Feel free to upskill where necessary or explore some certifications based on your industry. 

• Set up your workspace: Ensure you have the time, space, and resources you need to be able to deliver the work. This may mean a workspace in your home or a coworking space, and it might require licensing specialized software or purchasing equipment. While freelancing allows much flexibility, set yourself up for success by creating a dedicated workspace where you can focus and get work done. 

• Create an online presence: Make it easy for potential clients to find and vet you! Create a website (many free or affordable options exist) and have an online presence with social media, particularly Linkedin, to demonstrate how your service can help your ideal clients. You can showcase your portfolio on your website, provided you have authorization to publicly share work you have done for past clients.

• Network: Making contacts within your industry should be a priority so potential clients can get to know you and your service. Attend industry events and join professional associations to build your connections. If English or French is not your primary language, networking opportunities are a great way to practice and become more confident speaking in a business environment.   

Where to find freelance jobs? 

When looking for freelance work, finding legitimate opportunities is critical. While you build out your network by attending in-person events and getting to know people in your community and industry, online platforms are also a great source to get started. Here are some reputable platforms to consider:   

• Upwork and Freelancer: These are well-known global platforms for freelancers to find clients across various industries. You can narrow your search to work on projects based in Canada. 

• LinkedIn: Many clients post freelance roles on LinkedIn. Engaging in industry groups or networking can lead to project opportunities. 

• Job boards: Local job boards, such as Job Bank and Indeed Canada, often post freelance projects. 

• Industry-specific platforms: There may be dedicated sites for specific fields, such as Behance for designers and ProBlogger for writers.   

As with any business opportunity, be cautious of scams, especially those that ask for payment to access job listings or require you to purchase products or training as part of multi-level marketing (MLM) schemes. Research potential clients thoroughly and trust your instincts if something seems too good to be true. 

What rules do freelancers need to follow in Canada? 

Make sure you understand the legal and tax obligations of freelancing in Canada before you get started.

Licensing and regulations

If you expect to earn less than $30,000 per year from freelancing, you may be able to operate without a formal business number and licence. However, registering a business number with the Canada Revenue Agency (CRA) is often recommended. It helps streamline tax filings and is required if you start charging taxes on your services. 

Some provinces and cities may have different regulations, so check local requirements if you’re offering specific services such as consulting or tutoring. For more detailed guidance, refer to resources like OWNR, which provides information on the licensing process. 

Taxes 

As a freelancer in Canada, you’re responsible for reporting your income and paying taxes on your earnings. Here are key points to keep in mind:   

• Register for a business number: If your income exceeds $30,000 a year, you may need a business number. You’re also required to collect Goods and Services Tax (GST) and the Harmonized Sales Tax (HST). To obtain a business number for freelancing in Canada, visit the CRA’s website and register online. You can also call the CRA or mail in your application. Be ready to provide basic information, including your business name, structure, address, and a description of your services.

• Keep accurate records: Track your income, expenses, and invoices. It’s essential for tax reporting and can save you time at year-end.  Canada’s tax year for businesses and freelancers ends on December 31, with tax season running until June 30. Canadian businesses and freelancers have six months after year-end to file their taxes with the CRA.

• Understand deductions: Freelancers can deduct business-related expenses, such as office supplies, equipment, home office space, and travel expenses related to their work. Keeping receipts is essential for proving purchases took place.   

Consider consulting a tax professional familiar with freelance work to help you maximize deductions and meet tax obligations. 

When freelance work grows into a fully fledged business 

If your business plans go beyond freelancing, consider starting your own business. Here’s what you need to consider when growing your freelancing into a full business:   

• Create a business plan: As your work expands, develop a business plan to help you define goals, identify target clients, and outline revenue projections. A clear business plan can also make financing more accessible if you need it. 

• Incorporate your business: Incorporating offers liability protection and potential tax benefits as your business grows. Visit OWNR to explore incorporation options. 

• Open a business bank account: Separating your personal and business finances can simplify record-keeping and make it easier to manage your cash flow. Explore RBC’s Business Account options tailored for freelancers and small business owners.

• Consider hiring: When your workload expands, you may want to bring on additional freelancers or employees to help with projects and give yourself more time to think about your next steps.   

As a newcomer to Canada, you might find freelancing to be a rewarding way to build your career, gain Canadian experience, and earn income—with excellent time flexibility as you adjust to life in Canada. You can establish yourself as a successful freelancer in your new home by understanding the legal and financial aspects, finding legitimate opportunities, and delivering quality work. At RBC, we offer a wealth of services to support you along this journey. Welcome to Canada, and best of luck on your freelancing adventure!

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