Outsourcing and working with freelancers
Outsourcing lets a small business get expert help without hiring - bookkeeping, design, IT, marketing, admin and more. It works best when you're clear about what you want, choose carefully and put the agreement in writing. This guide covers how to do that, and why the line between a contractor and an employee matters.
In short
- Outsource work that's specialised, occasional or better done by someone else, and keep what's core to your business.
- Check a freelancer's work, references, ABN and any licences before you engage them.
- Write a clear brief and a written agreement covering scope, price, deadlines, ownership of work and confidentiality.
- Calling someone a contractor doesn't make them one. The law looks at the whole working relationship.
- Give contractors only the access they need, and remove it when the job is done.
What to outsource
Good candidates for outsourcing:
- Specialised work you don’t have the skills for: legal, IT security, design, web development.
- Occasional work that doesn’t justify a hire: a website build, a brand refresh, a stocktake.
- Routine work someone else can do more cheaply: bookkeeping, payroll, admin, transcription.
- Peak-time help in busy seasons.
Keep in-house what’s core to how you win and serve customers, and anything you need tight control over.
Your options
| Option | Good for | Things to know |
|---|---|---|
| Local freelancer or contractor | Ongoing relationships, work that needs a face-to-face meeting | Check references and availability |
| Specialist firm or agency | Bigger projects, continuity, a team of skills | Higher cost; check who actually does the work |
| Online freelance marketplaces | One-off tasks, a wide choice of skills and prices | Quality varies; check reviews and work samples |
| Virtual assistants | Admin, inbox and calendar management, data entry | Be careful with access to systems and data |
Finding and checking contractors
- Ask for referrals from other business owners and your network. See Networking and referrals.
- Look at real work similar to yours, and speak to one or two past clients.
- Check their ABN and business details, and any licence or registration the work needs (for example, BAS services need registration with the Tax Practitioners Board).
- Ask about insurance that’s relevant to the work.
- Start small: a paid trial task before a big project.
Write a clear brief
Most outsourcing problems come from unclear expectations. Your brief should cover:
- the goal and what success looks like
- the deliverables: what, in which formats
- deadlines and milestones
- the budget, or ask for a fixed quote
- examples of what you like and don’t like
- who the contact is and how you’ll communicate
- access they’ll need, and what they won’t get.
Put it in writing
A written agreement protects both sides. Cover:
- Scope and deliverables
- Timeline and milestones
- Price, invoicing and payment terms
- How changes are requested and priced
- Ownership of work: who owns designs, content, code and other materials, or what licence you get
- Confidentiality and how your data is handled
- How either side can end the arrangement
On ownership: the Attorney-General’s Department explains that copyright generally belongs to the creator when the work is made, and can be transferred to others. If you need to own the work, say so in writing. See Contracts and legal basics.
Contractor or employee?
This is one of the most important legal points in outsourcing, and getting it wrong can be costly. This guide doesn’t give employment or tax advice, but in summary:
- The label doesn’t decide it. The Fair Work Ombudsman explains that the whole working relationship is considered, including control over the work, financial risk, who supplies tools, whether the person can delegate, and whether the work is ongoing. Holding an ABN or sending invoices doesn’t automatically make someone a contractor.
- The ATO says employees work in and are part of your business, while independent contractors provide services to your business. Tax and super obligations differ, and super can apply to some contractors. See the ATO’s guidance.
- Sham contracting, treating an employee as a contractor, is against the law.
If you’re unsure, check the Fair Work Ombudsman and ATO guidance and get advice. If the arrangement looks like a job, see Hiring your first employee.
Managing the work
- Agree check-in points and milestones, especially on longer jobs.
- Give feedback early and specifically.
- Pay on time: good freelancers have other clients.
- Use a shared task list or project tool. See Project management basics.
- Keep records of what was agreed, delivered and paid.
Protect your data and accounts
- Give each contractor their own login, never shared passwords.
- Grant the least access needed for the job.
- Use multi-factor authentication on everything they can reach.
- Remove access as soon as the work ends.
- Keep your own copies of files, code, domain and website logins, so you’re never locked out.
See Cyber security and backups.
Common questions
What work should a small business outsource?
Work that’s specialised, occasional, or that someone else can do better or more cheaply: bookkeeping, IT support, design, web development, marketing, copywriting, payroll and admin. Keep work that’s core to how you win and serve customers.
How do I know if someone is a contractor or an employee?
It depends on the whole working relationship, not just what the agreement calls it. The Fair Work Ombudsman looks at factors such as control over the work, financial risk, who supplies tools and whether the work can be delegated. Holding an ABN doesn’t automatically make someone a contractor.
Who owns the work a freelancer creates for me?
Generally the creator owns copyright in what they make unless it’s assigned in writing. Agree in your contract who owns designs, content, code and other work, or what licence you get to use it.
What should a freelancer agreement include?
The scope and deliverables, timeline, price and payment terms, how changes are handled, ownership of work, confidentiality and data handling, and how either side can end the arrangement. Keep it in writing, even for small jobs.