The meaning of the term “freelance” hasn’t changed much in two centuries: in the early 1800s, a free lance was a mercenary who sought the best pay without committing to one nation, company or person.

Today, contractors, independents and the self-employed also seek flexibility and good pay—and they still face battles when competing for work and managing their finances.

The number of self-employed workers in Canada is growing: there were nearly 2.8 million in 2016, up from almost 1.8 million in 1988. Nearly half of them work alone, with no paid help, according to Statistics Canada.

As the labour market shifts, so does your pool of prospects, and freelancers have their own needs. Existing social and financial aid programs aren’t designed for them, making their place in Canada’s workforce “tenuous,” said a 2016 Mowat Centre report. The Privy Council Office reported in 2015 that both entrepreneurs and consumers were already pushing for more “education, insurance and other resources” for freelancers and contractors.

As such, self-employed prospects often fall through the cracks because they have too few assets or are misunderstood.

Take it from Bandana Singh, a Toronto-based singer-songwriter who’s been building her career for the past decade. Raised by a banker and an accountant, she started her music career with money saved from working a traditional office job. But she’s struggled to find an advisor.

“It’s uncomfortable to show up at a bank to talk to a financial advisor who has no concept of the industry you work in,” she says.

When she has been accepted as a client, her advisors have cut ties with her soon afterward because they’ve either moved to another bank or started working with more affluent clients. As a result, she works only with an accountant.

Nicolina Lanni, a Toronto-based filmmaker, also depends on her accountant for tax and cash-flow advice. Lanni, who runs a production company she co-founded in 2012 and also does freelance TV work, has met with two prospective advisors. Both times, she says, “it felt overwhelming.” She ended up calling her accountant—who already knows her finances and doesn’t have to start from scratch—for reassurance about her plans. Lanni doesn’t work with an advisor.

Despite those experiences, Lanni counts herself lucky. She and her common-law partner, who also works in the TV industry, have had steady work for the last 12 years. They recently bought a cottage and Lanni has started to invest.

Prospects like Singh and Lanni don’t want off-the-rack advice from advisors. They want advice tailored to their personal situations.

Start off on the right foot

If a self-employed prospect already has an accountant or bookkeeper, those professionals are likely managing cash flow and tax planning, says Lee Helkie, a partner at Helkie Financial & Insurance in Toronto. In that scenario, the advisor’s first role is to figure out what type of financial planning is already being done and to “work within the confines of [that].” From there, you can build the relationship (see “First meeting dos and don’ts”).

Either way, Helkie says advisors should ask a lot of questions at initial meetings about the person’s goals, income and lifestyle, and about who they are. Also ask them to divide a dollar based on their top financial priorities, such as owning a house, travel, etc.

This can help pinpoint how much a client should pay themselves on a regular basis while accounting for taxes.

Sunny Widerman, CEO of Personal Tax Advisors in Toronto, says calculating taxes for freelancers is tricky.

“When income is variable, it’s hard to take one year or one month and project what your tax bill will be for the year,” she says. To start, she suggests clients put aside 15% to 20% (before HST) of what they earn, depending on their risk aversion. Clients who spend more on business items tend to pay closer to 13% tax, due to available credits.

Both experts suggest encouraging clients to track everything they earn and spend. For business purposes, they should know how much they’ve spent, for instance, on work equipment and travel. That way, they can more accurately set aside enough money to cover year-end taxes.

When it comes to investable cash, both Singh and Lanni prefer TFSAs for their flexibility and liquidity. TFSAs allow them to manage living expenses while also financing projects.

Apps for freelancers

By 2020, 45% of Canada’s workforce could be comprised of freelancers, independent contractors and on-demand workers, according to financial software company Intuit Canada. In partnership with Emergent Research, Intuit’s study shows many of these workers (47%) choose the lifestyle for job flexibility, while 41% take on freelance work to boost regular income.

The company created the Quickbook Self-Employed app to provide support for freelancers and contractors managing their finances. The tool helps workers track expenses and mileage, increase tax savings and manage invoices.

Another tool, FreshBooks, is also designed to help small business clients and contractors manage their books, while some of the big banks have launched their own budgeting tools.

Project management

For freelancers, managing work projects can involve juggling debt and weighing tax considerations.

For example, Lanni and her business partner filmed their first feature between 2011 and 2013, and its theatrical release was in 2016. To produce the film—its budget was $425,000—they decided to use their own “personal lines of credit and 0% balance transfers to allow for access to money, interest-free, while we waited for grant and broadcast licenses to come in,” says Lanni.

They were also waiting for tax credits to come through. Out of the total budget, $100,000 plus interest came from bridge financing from National Bank, says Lanni. While she and her business partner had to take on debt in the short term, they received “tax credits of roughly the same amount” once production was complete.

An advisor for Lanni would need to understand how such credits are used—the federal Canadian Film or Video Production Tax Credit, for example, or the Film or Video Production Services Tax Credit—and be comfortable with the client holding short-term debt. Lanni and her business partner have also incorporated, so she has an accountant who does both her personal and business taxes.

In contrast to taking on debt and recouping their costs afterward, freelancers may receive lump sums up front for projects or proposals. In these cases, Helkie suggests helping allocate the money based on how and when the funds must be used, whether or not the funds will be taxed, and what tax-advantaged accounts the client has (e.g., TFSA or RRSP).

When Singh received an Ontario Arts Council grant of $23,660 in 2016, for example, she knew it had to fund six months of living expenses and travel. Rather than invest it, she held it in a high-interest savings TFSA and “slowly made withdrawals.”

Singh would have invested, but she wasn’t confident doing it on her own. She wants to find advisors at a firm that works with artists or creative, home-based businesses, she says.

So far, she feels she’s had to meet the advisor’s needs. “I’d like it to be the other way around,” Singh says.

First meeting dos and don’ts

When meeting a client with variable income and who works in an industry you’re unfamiliar with, make the first meeting all about them.


  • Ask a lot of questions about their lives, past work and financial background
  • Learn about the industry they work in and their projects
  • Find out about their goals and what they see in their medium-term future
  • Ask whether they’d like to build a business or continue working on a project basis, and mention that freelancers must get a business number and charge HST when they make $30,000 per year or more
  • Ask about their past experience with advisors


  • Present a ready-made binder of typical life and financial goals from the get-go
  • Present your services before asking what they need
  • Push products like registered accounts, investment portfolios and insurance right away
  • Compare the client to other client types during the discussion