Side Hustle vs Freelancing: Which Extra Income Path Is Right for You?
With living expenses on the rise, many people are exploring alternative ways to earn extra money. In 2025, two of the most popular ways to earn extra money are through side hustles and freelancing. Both offer flexibility, autonomy, and the potential for financial growth. However, when it comes to choosing between side hustling and freelancing, the lines get a bit blurry. Though they may seem similar on the surface, there are key differences between the two paths that can significantly impact how you work and what you achieve.
Whether you’re aiming to boost your income, pursue a passion, or gain more freedom, deciding which path to take depends on your goals, skills, and lifestyle. Is one more flexible than the other? Which offers more earning potential? Let’s dive into the differences, advantages, and challenges of side hustles and freelancing to help you make the best choice for your next venture.
Introduction to Side Hustles and Freelancing
There are many reasons individuals may choose to start a side hustle or a freelance career. Aside from financial freedom, self-employment offers a more flexible work schedule and opportunities to gain valuable experience. Side hustles and freelancing allow you to follow your passions on a part-time basis without losing your main source of income. Let’s explore the key differences between the two, so you can determine which pathway best suits you.
Defining a Side Hustle
A side hustle (or side gig) is a job or activity that someone does in addition to a main source of income. Unlike traditional full-time employment, side hustles often offer greater flexibility in terms of hours and workload, making them appealing to those looking for additional financial security or a creative outlet. Side hustles allow you to explore other interests outside your full-time job, develop new skills, or boost your overall earnings without committing to a secondary full-time business.
Side hustles vary greatly in terms of commitment, expertise and investment required. Some, such as selling handmade crafts online, require significant investment in time and materials. Others, such as gig work, may require your other tools or vehicles. However, there are many side hustles, such as dropshipping, that require minimal investment and can be worked remotely.
Defining Freelancing
Freelancing is a type of work arrangement where someone offers services to clients on a temporary project or short-term contracts. While some side hustlers will freelance, not all freelancing is a side hustle. Freelancers are self-employed, meaning they can set their hours, scope of work, and prices. In fact, many freelancers will work the equivalent of full-time hours, either with one client or spread across multiple clients.
Freelancing offers flexibility and independence, but it also requires managing all aspects of a business, such as creating a business plan, finding clients, negotiating contracts, and handling finances. Freelancers are not only their own boss, but often act as their own project manager, accountant, editor, job-seeker and personal motivator. It requires careful planning to maintain a proper work-life balance on top of seeking and managing clients.
Key Differences Between Side Hustles and Freelancing
Income potential
The income potential of side hustles and freelancing can vary significantly depending on several factors, including the type of business structure, time invested, skills, and market demand.
Side hustle earnings can vary from a few hundred dollars a month to thousands, depending on the nature of the hustle. Side hustles often start small and require time to grow before they become lucrative, meaning it may take time to reach your desired income level.
Freelancing income varies based on skills, experience, and client demand. Freelancers in fields like programming, web design, or digital marketing can make between $20 to $150+ per hour, while writers or virtual assistants may earn between $10 to $50+ per hour. The more experience you have as a freelancer, the higher your income potential. Freelancers can start earning as soon as they secure new clients. However, this is predicated on their experience and education.
Time commitment
Side hustles are inherently designed for flexibility. While you could turn a side hustle into a primary job, a main draw is that you can pick and choose when you work and for how long. This makes side hustles appealing to all types of entrepreneurs, whether you can commit just an hour a week or dedicate 50.
When freelancing, you are paid for your hours or projects completed, which means you need to consistently work to maintain your own income stream. While rates can be high, scaling is usually limited to the hours you can work. Additionally, you’ll need to perform the various administrative tasks associated with running your own business, such as registering your business, applying for an ABN, creating advertising materials and managing accounts. Some freelancers must also set aside time to hone their skills, particularly those working in rapidly evolving fields like tech and ecommerce.
Flexibility and control
Both side hustles and freelancing can be flexible ways to earn money. With freelancing, this flexibility is often influenced by client deadlines and project requirements. While you can take on multiple clients and set your own hours, you must balance these commitments to meet your client's expectations.
Side hustles, on the other hand, are largely self-driven with little to no external pressure from clients. The true flexibility of side hustles will depend on the type of side hustle and which digital platforms (if any) you choose to use. For instance, delivery drivers might face penalties for declining delivery requests, while an artists taking commissions upon request will have more freedom to choose their clients.
Pros and Cons of a Side Hustle
Benefits of having a side hustle
Additional income
A side hustle allows you to earn a steady stream of additional income alongside your primary employment. This extra cash can help you cover general expenses, save for a large purchase, pay off debt or even build an emergency fund, giving you greater financial stability and peace of mind. Additionally, side hustles diversify your income streams, protecting you financially if your main source of income is affected by layoffs, salary cuts, or other challenges.
Personal achievement and fulfilment
While side hustles are still work, many revolve around personal interests that you may enjoy. Whether you enjoy photography, writing or coaching, side hustles let you monetise these passions and provide personal fulfilment beyond your day job.
Professional development
Side hustles often involve learning new skills or improving existing ones. This could be anything from marketing, sales, and financial management to creative or technical abilities, making you more versatile and marketable in your career.
Low-risk, high-reward
A side hustle gives you a safe space to experiment with new business ideas without the financial pressure of relying on it as your sole source of income. You can test your ideas, learn from mistakes, and fine-tune your approach without the risk of losing your primary income.
Challenges of maintaining a side hustle with a full-time job time management
No matter how passionate you are, there are only 24 hours in a day. If you work full-time, it may be difficult to maintain a healthy work-life balance alongside a second job. You can invest in time management software, learn time and project management techniques, and learn to prioritise tasks effectively.
Reduced overall productivity
By making the most out of your time, side hustles can feel very productive. However, you may find your overall productivity suffers. If you’re not careful, working a side hustle can contribute significantly to burnout, which will negatively impact not just your income sources, but your overall health and wellbeing.
Conflict of interest
There are many ways your two income sources may conflict. Your employer may resent you if one job takes precedence over the other. Some businesses may have a non-compete clause that prevents you from starting a side hustle in the same or a similar industry. Before starting a side hustle, check whether your employer has any policies regarding secondary jobs.
Financial risks
Although there are many low-risk side hustles, there are still potential financial risks, particularly if you need to buy equipment. Before venturing into a side hustle, ensure you only invest what you can afford. Try your potential side hustles to see if they are the right fit before investing too heavily.
Pros and cons of freelancing
Benefits of freelancing
Flexible schedule
Freelancers have the option to set their own working hours. You can choose when to start and stop working each day, making it easier to balance work alongside hobbies, family life or other commitments.
Independence and autonomy
In addition to controlling their work hours, freelancers have greater control over the projects they work on and how they approach them. You can decide how to approach tasks, set your own strategies, and make creative decisions without necessarily following a company’s chain of command. Clients may have guidelines for projects, but you can choose whether you take on these projects.
Work from anywhere
Whether you prefer working from home or while travelling, freelancing offers the flexibility to work from anywhere. Many freelancers work remotely, eliminating the need for a daily commute. This not only saves time but also reduces expenses related to commuting, such as fuel, public transport, or meals.
High earning potential
Freelancers often have the opportunity to earn more than full-time employees. You can set your own rates, negotiate fees, and scale up your business by taking on more clients or projects. In some cases, experienced freelancers can command premium rates.
Challenges of freelancing
Income variability
Since freelancers typically work on a contractual basis, there is no income guarantee as with salaried work. Income can vary wildly depending on the demand for your services, average rates, and other factors.
Highly competitive
Freelancing can be highly competitive, though this varies somewhat depending on your industry. The more specialised your skill set and field, the less likely you are to have significant competition. By working on your personal brand, honing your expertise and networking with other freelancers and clients, you’ll reduce your direct competition significantly.
Unpredictable work-life balance
Although you have increased flexibility, you may be required to work outside standard business hours or work more hours than a traditional salaried position, particularly if you work with overseas clients. Since each contract is temporary, you may not have the chance to develop a consistent schedule, which may impact your personal life.
Lack of benefits
Salaried positions offer a variety of benefits to employees. Firstly, they offer consistent income on a regular schedule, which provides financial stability and helps with household budgeting. Salaried employees often have contracts or terms offering more job security. Employers also offer benefits such as insurance plans, retirement plans or contributions, paid time off, and access to company assets such as vehicles. Finally, these jobs are subject to labour laws that protect employers and offer fairness in terms of wages, time and workplace rights. Freelancers do not receive these entitlements and must provide their own benefits.
Choosing between side hustle and freelancing
Evaluating your skills and goals
Assess your skills to understand your strengths and identify areas for improvement. Identify your core skills, including soft skills like communication, organisation and problem-solving. Consider any past work experience and reflect on feedback you have received.
If you’re a beginner, a casual side hustle may be the right place to start. If you’re experienced in your chosen field and you have self-motivation, you may be ready for freelance work.
Considering time and effort requirements
Take stock of your daily activities and personal commitments. Do you have enough time in the day to engage in a side hustle or freelance work? Freelancing often requires upfront investment in building skills, creating a portfolio, and marketing yourself to clients, while side hustles may demand evenings and weekends to see growth. The initial phase can be time-intensive, with inconsistent income, but with careful planning, it can lead to flexible work and financial rewards.
Identifying your target market
Identifying your target market is crucial when starting a side hustle or freelance career. Begin by considering who will benefit most from your skills or products. Research your potential audience’s demographics, preferences, and pain points to tailor your offerings to their specific needs. Narrowing down your target market makes it easier to reach the right clients, leading to more meaningful connections, higher demand for your services, and a better chance of long-term success.
Examples of successful side hustles and freelance careers
Gig economy jobs
When most people think of side hustles, they think of gig workers. Gig work is temporary work given on a short-term or project basis. Common types of gig work include ride-sharing, food delivery, on-call work, or task-based work (often basic errands or manual tasks, such as moving furniture). Depending on the types of gigs, this side hustle can be incredibly flexible, allowing you to work whenever you have spare time. You can use many platforms to find this type of gig work in Australia. Popular platforms include:
Affiliate marketing
In affiliate marketing, an “affiliate” (someone officially attached to an organisation) markets an organisation’s product or services in exchange for a commission. Sales are tracked using affiliate links that connect an affiliate’s post to a product page. Affiliate marketing is a thriving industry, with global affiliate marketing spending expected to reach $15.7 billion by the end of 2024 and experiencing a predicted CAGR of 18.86 per cent between 2023 and 2032. Up to 83 per cent of marketers use affiliate marketing programs to drive brand awareness. This gives aspiring influencers plenty of opportunities to make extra money. Affiliate marketing is performance-based, so you’ll need to be motivated, and you may find the industry easier to break into if you have a background in marketing, content creation or social media influencing. Popular affiliate marketing platforms include:
Content creation
Both freelancers and side hustlers can take advantage of the thriving content creation market. 94 per cent of B2B marketers create short articles and blog posts and 84 per cent use videos in their marketing strategies. A content creator’s primary role is to create content that helps businesses or brands communicate their brand message, engage their audience, and drive actions like purchases, clicks, or follows. They may work across a range of mediums, including writing, video production, graphic design, photography, and more. However, content creators often have to deal with long hours, heavy workloads and high competition, particularly with the technological advantages offered by AI.
Freelance consulting
Freelancers with expertise in finance, HR, marketing, or management offer consulting services to businesses looking for external advice. As a consultant, you’ll be able to provide specific, expert advice to help solve clients' problems, improve workflows, and achieve specific goals. Consultants typically charge by the hour or per project, and rates can be significantly higher than traditional salaried roles. Experienced consultants can charge premium rates based on the value they deliver, making this a lucrative career pathway for freelancers.
Dropshipping
With the global dropshipping market expected to reach $301 billion in 2024 and interest continuing to grow, it’s never been a better time to get involved in dropshipping. Over 27 per cent of retailers use some form of dropshipping for fulfilment due to its host of benefits. In dropshipping, retailers list products on their website for customers to purchase. When a customer makes an order, retailers forward the order onto their suppliers, who then ship directly to the customer. For retailers, this means they never have to carry inventory or pay the associated overhead costs. It is a low-risk, high reward way to not only start a business but to test new product lines, expand your existing catalogue, and respond to market trends quickly and efficiently. Using platforms like Dropshipzone, you can find reliable suppliers quickly and easily with minimal risk. To see how Dropshipzone operates, check it out here.
Summary
Side hustles typically involve part-time ventures aimed at generating extra income alongside a full-time job, offering flexibility with fewer long-term commitments. Freelancing, on the other hand, often evolves into a full-time career, with individuals offering specialised services on a project basis for clients. While both paths provide autonomy and income potential, the right choice depends on your professional goals, available time, and the level of effort you’re willing to invest.
