A Complete Guide to Freelancing and the Gig Economy

Set on earning money outside the context of a full-time job, but not sure how to get started? Canstar breaks it down in our guide to freelancing and the gig economy.

There’s a growing interest behind freelancing and the gig economy, unsurprisingly. The freedom to be selective with your jobs/work, flexibility of hours, variety in your work – it all sounds pretty dreamy. The gig economy is the part of the economy that functions on independent contract work: jobs that fall under the umbrella of on-demand, short-term and freelance positions.

Nearly 144,000 New Zealanders work as self-employed contractors, which is just over one in 20 of all employed people, according to Stats NZ. It’s hard to say exactly what umbrella this 20% falls under. Some of these workers are full-time, year-round freelancers, others are on temporary short contracts. Others are still holding down a nine-to-five job but are jumping on side hustles in their free time. 

If you’ve thought about joining the gig economy and freelancing full time, there are certainly some things to think about. Like any style of work, there are advantages and disadvantages that come with it. You’ll need to be self-motivated, time-efficient, have some basic accounting skills, and you’ll need to make sure your lifestyle can accommodate working this way.


What exactly is freelancing?

A freelancer is someone who is self-employed and offers their specialised skills to clients. Jobs and gigs can be found on a variety of platforms, employment websites like Seek, sites like Upwork, new site Airtasker (recently launched in NZ) or simply through advertising on Facebook/online, or even word of mouth. If you’re a freelancer with a specific skill you might even get scouted out by a company who wants you to work for them.

There are plenty of skills that are needed by businesses in NZ that can be obtained through a freelancer, some include:

  • Graphic design
  • Writing services/editing
  • Accounting
  • Photography/videography
  • Website designing 
  • Marketing/social media managing 
  • Tutoring or teaching
  • Project management

What are the pros of freelancing?

There are a number of advantages and perks that often come with freelance work. Of course, it depends on the nature of the work you’ve been hired to do, but these can include:

Working from where you want

Freelancing is a great option if you like working from home, or if you move around a fair bit. If you have your own space and peace to work, it can be a great perk. Yes, you can definitely wear pyjamas all day (but Canstar’s covered why it’s probably best not to). 

Setting your own hours

If you’re a freelancer, you can generally set your own hours, as long as you get the work done for your client. Maybe you’re more productive early in the morning. Or maybe you want to work before your kids wake up, get them off to school, and then continue working until they get home. Freelancing can offer the flexibility to do this. 

Working on projects/jobs that are meaningful to you

As a freelancer, you have complete say in the projects you work on and the clients you work for. This means, generally, you’ll be able to seek out work that resonates with you, or at least aligns with your values. Of course, sometimes you can’t afford to be fussy when it comes to work. But if you can, this is definitely a positive.

Getting your name out in an industry 

Freelancing is a great way to get your name out there across multiple outlets, platforms and businesses. This can be an advantage in certain industries. Take writing, for example. Your portfolio could span writing for ten different outlets in a variety of styles, compared to the same number of stories written for one outlet over the course of one contract. The same goes for something like photography. Freelancing can let you prove you and your skills are diverse. 

Getting paid what you believe your work is worth

You’ll generally set your own price for your services, which is often higher than what you’d make as an employee doing the same work. You’ll need to make sure your rate pays you fairly for the time it takes you to do the work, and any other resources you need to complete a job.

It’s affordable to get going

Anyone can start freelancing if you have a skill to offer. It pays to have a website so people can find you and check out your work, but it’s a gig that anyone can get on board with.

Increased work-life balance

Taking leave, holidays and working specific days and not others are easier if you’re a freelancer and not on a long-term contract. Flexibility in a job often leads to better work-life balance in the long run. 


What are the cons of freelancing?

Yes, there are cons too, and plenty of them to consider. The gig world isn’t all roses.

It can be isolating 

Are you a social butterfly who loves nothing more than a good chat over coffee and lunch at work with your co-workers? Know that the freelancing world can often be isolating. You’ll be spending a lot of time alone. A lot! Are you someone who likes to bounce ideas off people often? You’ll have to make sure, too, you’re okay with working totally solo (at least most of the time) on a project.

You are on a schedule, despite your freedom

The client who has hired you, of course, has a schedule, too, on when they want work done. You’ll need to be pretty efficient with getting work done on time and to a high standard.

Jobs can be few and far between

The freelance life can be a hard one for this reason. It’s good when it’s good, and it’s (very) bad when it’s bad. You’ll need to be willing to branch out and do other short-term jobs, potentially, while you wait to get more freelance gigs.

It can be stressful

You might be managing multiple projects at once to make ends meet. They might all have the same due date. You need good time management skills to freelance, meet deadlines, stay calm, and make sure your personal life doesn’t blur too much with work life.

It can take a while to build client relationships

It can take some time to get your name out there and get clients to trust you enough for them to hire you for projects. A proven track record of you completing great projects is helpful here.

You won’t score long-time employee benefits

Some employers offer benefits like free health insurance with a job, which you’ll miss out on. And holiday pay, that doesn’t exist, of course, if you’re freelancing full time. Work drinks, staff outings… More often than not, if you work completely for yourself, you’re a lone wolf!

You’ll have to know how to do your own taxes

You’ll have to be pretty onto it with keeping track of what you’re owed, chasing companies up for payment who’ve used your skills, and keeping on top of your taxes, ACC payments and, possible, GST. If you’re earning enough it can be worth investing in accounting software to help with this, rather than pay for the services of an accountant.


So, how do you get started?

It can be as simple as finding a gig that appeals to you online and going from there; building your own site to market your services; or networking within your existing webs in your industry. Our top three tips:

  • Define exactly the service you offer. Be specific and know your target market. If you’re a photographer, for example, what do you specialise in? Are you a wedding photographer or a pet portrait photographer? These are key words people will be searching for on Google, too, so you’ll pop up easier.
  • Decide your rates. This can be tricky, especially if you’re young and new to the freelance game. But the idea here: don’t set your rate so low you devalue your work, and don’t set it so high people will take one look and say: “Forget it!”
  • Create an online portfolio. We can’t stress this one enough. As a freelancer, it will be your biggest tool.

How does KiwiSaver work if you’re self-employed?

It’s a good question: how does your KiwiSaver change as a new member of the self-employed club. It’s a bit of a long-winded answer, but essentially: 

  • If you will not receive PAYE income as a contractor – eg, if you are going to invoice for your contract work – your employment status will change to self-employed, and you will not be required to make any contributions to your KiwiSaver account.
  • You can still make voluntary contributions to KiwiSaver whenever you want to – although you will need to check with your provider if there’s a minimum amount to contribute.
  • You won’t get employer contributions, but you will still be eligible for the maximum member tax credit of $521.43 from the Government.
  • If you’re self-employed and your income is subject to PAYE deductions, you will be considered an employee for the purposes of KiwiSaver. This means the KiwiSaver contributions minimum of 3% will continue to be deducted from your gross salary or wage, and you must also make the minimum employer’s contribution of 3%.

Compare KiwiSaver providers for free with Canstar!

What about tax?

If you’re part of the gig economy, you’ll need to pay tax on all your jobs. For tax purposes, the rules that apply to freelancers are the same as those for contractors or self-employed people. You’ll need to set money aside for tax from every pay cheque (unless you’re exclusively working through a labour hire company that’s paying your withholding tax, or are otherwise having the correct tax deducted at source). The full run-down on that can be found on MBIE’s site.

If you’re freelancing, you might want a savings account that’ll align with your new line of work. Canstar regularly compares the banks’ offerings so you can compare them too, easily, and all in one place. Just hit the button below:

Read more about Canstar's Bank of the Year Savings Accounts 2020 here!

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