In the future we will all hold at least seven jobs, says futurist Faith Popcorn.
We’re already heading this way as employees find themselves on “fixed-term contracts” and the rest of us freelance, moonlight and go where the money is. Deloitte’s survey of 7,700 millennials found that only 27% plan to stay with their current employer for longer than five years.
More than four million Australians, or 32% of the workforce, freelance regularly, according to a 2016 CSIRO report.
There are many reasons to do it – flexibility and autonomy, working for yourself and earning money doing something you love. It’s really quite easy. All you do is get an ABN, maybe register for GST, agree a rate, do some work and issue an invoice.
And this doesn’t even take into account the ‘gig economy’ involving the likes of Freelancer, Upwork, Uber, Airbnb, Airtasker, Deliveroo and Shopwings.
But there has been a lot of furore over gig workers being left vulnerable. As an independent contractor, you’re not covered for superannuation, tax, holidays or workers’ compensation if you fall off your delivery bike and can’t work. Airtasker now has an agreement with Union NSW and the market will start to see a lot more regulation.
If you’ve decided you’re going to freelance or gig it, here are a few things to bear in mind:
Price yourself right
As a freelancer, how much income do you need? It’s tempting to compete for work by charging less than everyone else but then you’re stuck in that price-band. And while you’re designing someone’s website for $20, you could be bidding for work which pays better. Also, think about a fixed price versus hourly rate.
If it’s not you setting the price, know the facts. Sometimes, it’s not even the minimum wage.
| What | How much | Fee |
|---|---|---|
| Uber driver | Less than minimum wage up to $30-40 an hour | 25% |
| Odd jobs on Airtasker | Average task is $113. Examples: - $5 to design a logo - $300 to paint a feature wall | 15% |
| Rent your space on Airbnb | Australian Airbnb hosts in Australia make less than half of what they charge. | 3% host service fee |
| Deliveroo on a bicycle | $9 per delivery, two deliveries an hour | Customers are charged a $5 fee and Deliveroo gets a 30% cut of the restaurant bill |
Find a good accountant
They will help you get set up and keep you on track for filing a tax return.
Set aside money for tax
Look at the ATO’s tax calculator. If you’re planning on earning $80,000 in total (for all your jobs, contracts and gigs), put away at 30% for tax. You’ll get a nice little bonus when it comes to tax time if you’ve put aside too much.
Register for GST
Ensure you do this if you’ll be earning at least $75,000.
Be realistic about your budget and expenses
You can’t predict what you’ll earn so budget for those times when work is slow and bills are coming in fast.
Plan for retirement
It may seem like a long way away but the future will roll around pretty quickly so put aside at least 10% for super. You can now claim a full deduction for super contributions and could also get the Government’s super co-contribution payment if you’re a low-to-middle-income earner.