Starting a freelance career in Canada is exciting — but it can also be overwhelming. You’re suddenly responsible for finding your own clients, managing your own money, handling taxes, and running every part of the business yourself.
The good news is that most successful Canadian freelancers follow a predictable set of steps in their first year that set them up for long-term growth. Here are the 10 most important things to do when you’re just getting started.
1. Register as a Sole Proprietor
The simplest business structure for a new freelancer in Canada is a sole proprietorship. You don’t need to incorporate right away. All you need to do is register your business name with your provincial government if you’re operating under a name other than your own. In Ontario this costs around $60 and takes about 20 minutes online at ServiceOntario.
Operating as a sole proprietor means your business income is filed on your personal tax return using the T2125 Statement of Business or Professional Activities form. Keep it simple when you start — you can always incorporate later when your income grows.
2. Open a Separate Business Bank Account
Never mix your personal and business money. Open a dedicated business chequing account from day one, even if it’s just a free account at a digital bank like Tangerine or Simplii. This makes bookkeeping dramatically easier and protects you in the unlikely event of a CRA audit.
Every payment from a client goes into this account. Every business expense comes out of it. At the end of the year, reconciling your income and expenses takes hours instead of weeks.
3. Set Your Rate Properly
One of the most common mistakes new Canadian freelancers make is undercharging. When setting your hourly or project rate, don’t just think about what you want to earn — think about what it actually costs you to run your business.
A good rule of thumb is to take your desired annual salary, divide it by 1,000, and that’s roughly your minimum hourly rate. If you want to earn $60,000 a year, your minimum rate should be around $60 per hour. Because freelancers spend time on admin, marketing, and unpaid tasks, many accountants recommend adding 30–50% on top of that baseline.
4. Track Every Business Expense
Every expense related to running your freelance business is potentially tax-deductible in Canada. This includes your home office, internet, phone, software subscriptions, professional development courses, and equipment.
Use a simple spreadsheet or a free accounting app to record every expense with the date, amount, and category. Keep your receipts — the CRA requires you to keep business records for six years.
5. Send Professional Invoices Every Time
Every piece of work you complete needs a proper invoice. An invoice creates a legal record of the transaction, helps you track what you’re owed, and gives your client the documentation they need to process payment.
Use RGmotive’s free invoice generator at rgmotive.com/free-invoice-generator/ to create professional PDF invoices with automatic GST/HST calculations in under two minutes. Include your invoice number, work description, payment terms, and your GST/HST number if registered.
6. Register for GST/HST at the $30,000 Mark
In Canada, you must register for a GST/HST account once your revenue exceeds $30,000 in a 12-month period. At that point you are required to collect GST or HST from your clients and remit it to the Canada Revenue Agency.
Register through the CRA’s My Business Account portal as soon as you approach this threshold. Once registered, you also get to claim Input Tax Credits on your business expenses — which reduces the tax you owe.
7. Build a Simple Portfolio
You don’t need an expensive website to start freelancing. A simple one-page portfolio with three to five examples of your work, a short bio, and your contact information is enough to get started. Free tools like Canva, Carrd, or even a well-organized LinkedIn profile can serve as your portfolio in the early days.
Update it every time you complete a strong project.
8. Get Everything in Writing
Before starting any project, send a simple written agreement or statement of work to your client. It doesn’t need to be a complex legal contract — it just needs to state what work you will deliver, when you will deliver it, what you will charge, and what happens if the scope changes.
Getting this agreement signed before you start work protects you legally and sets clear expectations. Many payment disputes between freelancers and clients happen because there was no written agreement at the start.
9. Put 25–30% of Every Payment Aside for Taxes
Unlike salaried employees whose taxes are deducted at source, freelancers in Canada pay their taxes in a lump sum. Many new freelancers get caught off guard at tax time because they spent money they needed to pay taxes.
From every client payment you receive, immediately transfer 25–30% into a separate savings account that you don’t touch until tax time. This simple habit eliminates one of the biggest stresses of freelancing.
10. Ask Every Client for a Referral
Word of mouth is the most powerful marketing tool for Canadian freelancers. When you successfully complete a project, send the client a short follow-up email thanking them for the work and asking if they know anyone else who might benefit from your services.
A simple line like “If you know anyone looking for [your service], I’d appreciate the referral” is enough. Over time, a steady stream of referrals reduces your dependence on platforms like Upwork and Fiverr and builds a client base that trusts you.
The Bottom Line
Your first year as a Canadian freelancer will be a learning curve no matter what. But the freelancers who get ahead fastest are the ones who treat their business like a business from day one — proper invoices, separate bank accounts, tracked expenses, and professional agreements.
Use the free tools at RGmotive to make the business side easier so you can focus on the work you love.
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