How to Become a Consultant in Australia: Complete Business Setup Guide

Last updated: 8 July 2025

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1. Legal Requirements for Australian Consultants

Do consultants need a license, qualification or permit?

This depends on your industry or field of expertise. Some fields require a university degree and a special licence or certification. For example, if you intend to work in the insurance, real estate, financial planning or accounting fields, you will need a special licence and/or qualification.

However, there is no specific certification or qualification to actually practice as a consultant. All you need is the specialist skills, a solid reputation and some good connections.

Bear in mind, if you are planning to operate your consulting business from home (and in particular have clients visit you at your home), you may require a special council permit, licence or even insurance. Contact your local council for information on the local requirements and any necessary permits.

What is the difference between a consultant and an employee?

It is essential to ensure that your legal relationship with your client is that of a consultant, not an employee. If you are deemed to be an employee, your client could be liable to pay you Superannuation, holiday pay, health insurance, etc. When they contracted your services, this was likely not part of the deal.

Your Consulting Agreement should clearly state, and require your client to acknowledge, that neither you nor your employees, if any, are or will be the client’s employee or agent.

However, this alone will not ensure that you are legally considered a consultant. There are other factors that will be considered in determining whether you are an employee or a consultant.

You are more likely to be considered a consultant, rather than an employee for tax purposes, if:

• You are allowed to delegate or subcontract your work to a third party
• You are paid based on the result achieved, rather than a salary or hourly rate
• You supply your own equipment, and at your cost
• You have control over your work, subject to the terms of an Agreement
• You work on projects or phases from time to time
• You have the freedom to accept or refuse additional work
• You carry on other jobs at the same time, and
• You take commercial risks and are legally responsible for your work (e.g. carry your own Professional Indemnity insurance)

More information on the ATO’s website here.

What legal agreements or notices should I use in my consulting business?

Here are the legal agreements and notices that we recommend you use in your consulting business:

• Consulting Agreement: This document clarifies the details of your consulting services, confirms the deliverables, and outlines the progress payments. It is important that the Agreement includes clauses that cover intellectual property protection, confidentiality of client data and limitation of liability.
• Privacy Policy: If you collect any personal information, such as email addresses, physical addresses, and telephone numbers, you must post a Privacy Policy statement on your website.
• Website Disclaimer and Terms & Conditions: A Website Disclaimer can protect you from frivolous lawsuits from your website visitors. Posting Terms & Conditions is now a requirement of the latest Australian Consumer Law.

None of these legal forms are complicated, and using them will show you’re a professional operator. Additionally, as we mentioned at the beginning of this guide, doing things correctly will help prevent legal issues and protect you and your business from lawsuits.

2. Business Structures for Consultants in Australia

What business structure should I use for my consulting business?

In Australia, there are generally 4 options for structuring your business:

• Sole trader
• Pty Ltd Company
• Partnership, and
• Trust

The best business structure for you will depend on your personal circumstances, and making the right decision is crucial. Discuss the pros and cons of each option with your accountant. Here’s a quick summary of each option.

Being a Sole Trader is the simplest and least expensive option. Designed for business owners who are the sole proprietors of their companies, this structure doesn’t give you much protection if things go wrong. Your personal assets are unprotected from any claims arising from your business.

Incorporation (i.e. forming a Proprietary Limited Company) effectively makes your business a separate legal entity from you. This structure involves quite a bit of paperwork and can be more expensive to maintain, but it offers your personal assets protection from liability. Only your company assets are at risk in the event of any legal actions and company debts.

Creating a Partnership allows you to go into business with multiple people and share income. Partnerships are easier and less expensive to set up than companies. However, all partners are collectively personally responsible for the business’s debts and actions against the Partnership. And each partner is individually liable for debts incurred by the other partners. This means you have unlimited liability, unlike a Company structure.

A Trust isn’t an organisation at all, but instead a legal structure to hold assets. For example, you might set up a Trust to hold your business assets, then appoint a Trustee to manage them. Typically, the Trustee is a Company, and the Trust provides asset protection, limiting liability associated with operating the business. Trusts are very flexible for tax purposes. However, a Trust is a complex legal structure, and establishing one costs significantly more than a Sole Trader or Partnership.

For more detailed information on each of these business structures, see our feature article: How to Choose the Right Business Structure in Australia.

Sole Trader vs Pty Ltd for consultants?

Choosing between operating as a sole trader or incorporating as a Pty Ltd company is one of the most important decisions you’ll make when starting your consulting business. As a sole trader, you can commence operations immediately with minimal setup costs – typically just an ABN registration and business name. This structure suits consultants who are testing market demand, operating as a side business, or expecting annual revenues of under $100,000.

However, the significant drawback is unlimited personal liability, meaning your personal assets are at risk if legal issues arise.

A Pty Ltd company structure provides crucial asset protection by creating a separate legal entity, limiting your personal liability to your investment in the company. While setup costs are higher (approximately $600 in ASIC fees plus accounting expenses) and ongoing compliance is more complex, this structure is strongly recommended for consultants. Additionally, once your income exceeds $120,000, the company tax rate of 25% becomes advantageous compared to personal marginal tax rates.

When should I incorporate my consulting business?

Most successful consultants follow a natural progression: starting as sole traders to validate their business model, then incorporating within 12-18 months as revenue grows. Key triggers for incorporating include:

• Annual revenue exceeding $100,000
• Securing enterprise or government clients
• Hiring subcontractors or employees
• Operating in high-risk sectors (finance, healthcare, construction)
• Requiring enhanced professional credibility

The decision ultimately depends on your risk profile, revenue projections, and client base; however, consulting in high-liability fields warrants immediate incorporation, regardless of revenue.

3. Register Your Consulting Business

How do I register my consulting business name?

Registering your consulting business name in Australia involves several steps, depending on whether you’re using your own name or creating a business name. If you’re operating under your own name (e.g. “Jane Smith Consulting”), you don’t need to register a business name – just obtain an ABN. However, if you’re using any other name (e.g. “Strategic Solutions Consulting”), registration is mandatory.

1. Before registering, check name availability: Start by verifying your proposed name is available through the ASIC website. Also, check domain availability for ‘.com.au’ and social media handles using tools like namechk.com. Avoid using names that are already in use or too similar to those of established consulting firms in your field.
2. Registration process: Use the Australian Government Business Registration Service (register.business.gov.au) to register everything in one place. You can simultaneously register your business name, apply for an ABN, and register for GST if needed.
3. Protect your consulting brand: After registering your business name, secure your domain name using your ABN or ACN through registrars like Webcentral or Google Domains.
4. Trademark your consulting brand: Most importantly, consider trademarking your consulting business name with IP Australia – this is the only way to legally prevent others from using your brand name. Business name registration alone doesn’t provide exclusive rights to the name.

Should I register social media ‘handles’?

Yes, absolutely. For consultants, having a matching domain and social media presence is crucial for professional credibility.

Why it matters: Consistent handles across platforms (e.g. @SmithConsulting on all channels) make you easier to find and appear more professional. It also prevents others from taking your business name on these platforms, which could confuse potential clients or damage your reputation.

Focus on LinkedIn first (essential for B2B consulting), then secure Twitter/X, Facebook, Instagram, and YouTube. Even if you only actively use LinkedIn initially, claiming your handle on other platforms protects your brand and gives you options as your consulting business grows.

Should I trademark my consulting business name and logo?

Just because you set up a ‘Pty Ltd’ company or registered your business name with ASIC, this does not mean you ‘own’ your brand name. Any business could start using your brand name for another business activity!

This concept is one of the most misunderstood aspects of starting or running a business. And business owners frequently contact us because someone is using their brand name. The only way to protect your brand name and restrict its use is to register your trademark with IP Australia.

Should I register my consulting business for GST?

If your consulting business has annual revenues of over $75,000 then you must register for GST. If you have annual revenues of less than $75,000 then talk to your accountant about your options.

4. How to Price Consulting Services in Australia

How much do consultants earn in Australia?

Australian consultants typically charge between $100 and $500 per hour, depending on their expertise and industry. Here’s what you can expect:

Consulting Rates by Experience:

• Entry-level (0-2 years): $75-$150/hour
• Mid-level (3-7 years): $150-$300/hour
• Senior (8+ years): $300-$500/hour
• Specialist/Expert: $500-$1,500/hour

By Industry:

• Management Consulting: $200-$400/hour
• IT Consulting: $150-$350/hour
• Marketing Consulting: $100-$250/hour
• Financial Consulting: $250-$500/hour
• Social Media Marketing: $150-$250/hour
• Digital Marketing Strategist: $200-$300/hour

Most successful consultants in Australia earn between $150,000 and $350,000 annually, with top performers exceeding $500,000.

Hourly vs project-based pricing?

Both pricing models have their place in consulting, and most successful consultants use a mix depending on the client and project type.

Hourly pricing works best for:

• Initial client engagements where the scope is unclear
• Ongoing advisory or retainer work
• Troubleshooting and problem-solving assignments
• Clients who prefer transparency in billing

The main advantage is simplicity and fairness – you’re paid for the time you work. The downside is income caps (limited hours in a day), and clients may question the time spent or push for lower rates.

Project-based pricing works best for:

• Clearly defined deliverables and outcomes
• Repeatable services you’ve done before
• High-value strategic work
• Clients focused on results, not time

The advantage is earning potential – efficient consultants can earn more by completing projects faster. It also aligns your interests with those of your clients. The primary risks are scope creep and underestimating the effort required.

Smart approach for new consultants: Start with hourly pricing to understand how long tasks actually take, then transition to project-based pricing once you can accurately estimate effort. Consider offering both options: “This project is $15,000 fixed price or $200/hour, estimated 75-80 hours.” This gives clients a choice while protecting your interests.

How do consulting success fees work?

Consulting success fees are typically based on achieving a desired outcome, such as a product launch, a signed financing deal, an acquisition, or a joint venture agreement. The success fee is usually a one-time bonus payment, over and above normal (or reduced) consulting fees.

By contrast, consulting performance fees are usually recurring and based on achieving a desired outcome, such as dollar cost savings or revenue milestones. In these cases, the performance fees could be based on sharing a percentage of the improved margins or revenue with the consultant.

Again, if you choose to pursue any of these options, ensure you have a well-written agreement that protects your interests and guarantees payment.

How does consulting for equity work?

Startups are often short of cash and are willing to trade consulting services for a share of their equity. Some consultants are willing to take the “risk” of this form of payment – others stay well clear.

Sometimes, a compromise is reached where a portion of the consulting services is paid for in cash and the remainder is paid for by equity participation. Alternatively, you could be offered a position on their Board of Directors, Advisory Board or come on as a Co-Founder (with founders’ shares) in exchange for your consulting services.

If you choose to pursue any of these options, make sure you have a well-written agreement that protects your interests. You should also consult with your accountant, as there may be tax due on the value of the shares issued. In such cases, options or warrants may be a more tax-effective way of being remunerated.

5. Protect Your Intellectual Property

Who owns the IP I create for clients – me or them?

By default in Australia, work created specifically for a client under a consulting agreement typically belongs to the client, but this can and should be clarified in your Consulting Agreement. Without a written contract, ownership can become a costly dispute.

The general rule: IP created specifically for a client project (reports, strategies, custom solutions) usually belongs to the client who paid for it. However, your pre-existing IP (methodologies, frameworks, templates you’ve developed) remains yours unless explicitly transferred. The key is distinguishing between “background IP” (what you bring) and “project IP” (what you create for them).

How do I protect my consulting frameworks and methodologies?

The best way to do this is to ensure you have a clear and robust Consulting Agreement that clearly defines:

• What IP is owned by you
• What IP is owned by your client
• What IP is retained by your client after you have delivered your service
• What license terms apply to any IP you transfer to your client
• What IP is to be kept confidential, and
• What IP is to be returned or destroyed on project completion

In addition, implement a ‘need to know’ policy to help protect your IP and trade secrets. Not everyone within your client’s organisation needs to know how you carry out your work and what tools and techniques you use. Consider restricting access to information to only those people who need to know, and, where possible, have them sign a Confidentiality Agreement.

You should always keep your IP and confidential information in secure locations, in a secure manner. For example, use strong passwords on your computer and secure your wireless network with a password. And consider registering your IP with trademark names and/or logos.

Red flag: Never sign agreements that transfer “all IP created during the term” to the client – this could inadvertently include your core business assets.

Can clients use my materials after our engagement ends?

This depends on what your Consulting Agreement says. Without clear terms, clients often assume they can use everything forever, including sharing your methods with competitors.

The standard approach is to let clients keep using the specific work you created for them (their strategy document, their marketing plan) for their own business. However, your templates, frameworks, and methodologies should be licensed for internal use only; they can’t be shared or resold.

Some consultants add time limits on certain materials. For example, training materials may be licensed for one year and then require renewal. This protects your IP while being fair to clients.

6. Consulting Agreements

Should I use a Consulting Agreement with my clients?

Yes. You need to have a signed Consulting Agreement (also called a Consulting Contract) with each of your clients – this is the most important document you should use as a consultant.

A Consulting Agreement lays out the terms of your engagement and describes the project and consulting services you will provide. Depending on the requirements of your client, the Agreement can be very specific regarding the services to be performed (with specific outputs, phases, start and end dates) or it can be more open-ended and general.

Avoid disputes by having a clear Agreement that specifies the services to be performed and outputs to be delivered.

You must ensure that your client has acknowledged and agreed to your terms. This is for your legal protection. They can acknowledge your terms with any of these methods:

• Signing your Agreement using an eSignature service
• Signing, then scanning/photographing your Agreement and returning it by email
• Acknowledging your Agreement by email, or
• Acknowledging your terms by ticking a box during your online purchase process

Each of these methods offers a different level of protection. But if you have no proof of a contractual agreement, your terms may be invalid and not able to be relied upon to protect you.

What clauses should my Consulting Agreement include?

Your Consulting Agreement should include, at minimum, clauses that cover:

• Detailed description of the consulting services you are providing
• Deliverables, phases of work and any applicable timelines
• Payment schedule and term or length of your engagement
• Intellectual property protection for your own materials
• Confidentiality
• Termination, cancellation and refunds
• Dispute resolution
• Insurance requirements
• Indemnity with Limitation of Liability, and
• Governing law

Your Consulting Agreement should be tailored to each specific client, detailing the services you are providing to them. A well-written Agreement will not only provide you with legal protection, but it will also help manage your client’s expectations.

What is the difference between a Consulting Agreement and a Consulting Engagement Letter?

Typically, a Consulting Engagement Letter is less formal and less comprehensive than a Consulting Agreement. It can be initiated by either the client or the consultant and agreed upon by email. It is usually a short letter for discussion before an agreement or terms are presented, and should include confidentiality provisions.

We always recommend using a well-drafted and comprehensive Consulting Agreement with all your clients – it will provide you with better legal protection and demonstrate that you are a professional operator. This is the full terms of agreement for your consulting services, formalising your consulting proposal.

What is the difference between a Consulting Agreement and a Consulting Proposal?

Typically, a Consulting Proposal just lays out the scope of a potential consulting project with:

• Description of the issue to be resolved
• Proposed work and phases of work
• Project deliverables
• Timeline, and
• Consulting Fees

Once a client has agreed to a Consulting Proposal, these details can form part of a formal Consulting Agreement. If you just get client agreement to your Consulting Proposal – and don’t formalise a proper Consulting Agreement – you leave yourself open to potential disputes regarding termination, liability, IP ownership, payment schedule, etc.

7. Legal Notices for Your Website

What legal notices does my consulting business website need?

Your consulting website requires three essential legal notices to comply with Australian law and protect your business. These should all be linked in your website footer and accessible from every page.

Privacy Policy: Mandatory under the Privacy Act if you collect any personal information such as names, emails, phone numbers. It must explain what information you collect, how you use it, with whom you share it, and how visitors can access their data. Even a simple contact form triggers this requirement.

Terms and Conditions: The Terms and Conditions you publish on your website should include clauses that cover your compliance with the Australian Competition and Consumer Act, how you handle returns and refunds, intellectual property protection and copyright, indemnity with limitation of liability, and governing law.

Website Disclaimer: Protects you from liability if visitors rely on general information or resources you publish. This is crucial for consultants who share insights, articles, or frameworks on their website. It should state that the content is general in nature and doesn’t constitute professional advice for specific situations.

Should my website include the Terms & Conditions for my consulting services?

Typically, your website is for your visitors. So it should include a Privacy Policy and your general Terms and Conditions. Your specific Consulting Terms are usually provided to clients only. You can still publish them on your website, but hide the link and only provide it to clients when they engage your services. You should also have an Agreement available that you tailor to your specific services and provide to your clients.

8. Insurance & Risks of Being a Consultant

Do consultants need professional liability or business insurance?

It is a good idea to have Professional Indemnity/Liability Insurance to protect your business against claims that the professional advice or services you provided as a consultant were negligent and caused your client loss or damage. You have a duty of care when you hold yourself out to be a professional, and people rely on your expertise.

For example, if an error or omission occurs in the course of your work and that error or omission causes a financial loss or injury to your client, then they can sue you for damages. Professional Indemnity Insurance is intended to cover such claims.

However, insurance policies can be expensive and very difficult to claim on. If you choose to buy insurance, be sure to read the Terms carefully. Your best protection comes from:

• Using a well-drafted Consulting Agreement
• Having robust Terms & Conditions on your website, and
• Operating as a ‘Pty Ltd’ company.

A ‘Pty Ltd’ company limits your personal liability and any claims to the assets of the company. It may also be less expensive than maintaining Professional Indemnity/Liability Insurance.

Am I liable for the consulting advice I give?

Yes. As a consultant, you are vulnerable to claims where clients rely on your work or “advice”. Clients may claim that they relied on your advice and suffered financial loss or made detrimental business decisions, and claim you are responsible. But a well-drafted Consulting Agreement will mitigate this potential risk.

In the event I am sued, how can I limit my liability?

You need to have a signed Consulting Agreement with your client that includes a ‘Limitation of Liability’ clause. In the unfortunate event that a claim is made against you, a well-written clause should limit your financial downside. This is particularly important where you are a Sole Trader. To limit your liability further and protect your personal assets, you should consider setting up and running your business under a ‘Pty Ltd’ company.

Additionally, your website should include a Website Disclaimer. You cannot control how some website visitors may read and rely on your written content, and a Website Disclaimer will limit your liability in such circumstances.

9. Time Tracking & Accounting Software

What is the best time tracking software for a consultant?

The best time tracking software depends on your consulting style, but most Australian consultants use either Toggl Track, Harvest, or Clockify for their simplicity and value. These tools integrate seamlessly with popular invoicing software, making client billing straightforward.

For solo consultants: Toggl Track ($9/month) is the go-to choice. It’s dead simple – click to start timing, click to stop. Excellent reporting clearly shows the amount of time you spend on each client or project.

For consultants with teams: Harvest ($12/user/month) combines time tracking with invoicing and expense tracking. Ideal for those with subcontractors or employees. The built-in invoicing feature allows you to track time and bill clients from a single platform.

For budget-conscious consultants: Clockify offers a robust free plan with unlimited tracking. Although the interface isn’t as polished, it handles the basics well and includes reporting features. Great for testing if time tracking works for your workflow before committing to paid software.

What is the best accounting software for a consultant?

For Australian consultants, Xero is the clear winner. It’s designed to meet Australian tax requirements, integrates with every business tool you’ll need, and is preferred by most Australian accountants. At $32-65/month, it’s the standard for a reason.

Integration tip: Choose accounting software that connects with your time tracking tool. The Xero + Toggl combination is compelling – time entries flow directly into invoices, eliminating manual data entry and ensuring you bill for every minute worked.

Check out this article for more online business tools – The Complete Online Business Toolkit: What We Actually Use.

How do I collect overdue invoices from clients?

If your client has not paid you, you can issue a Letter of Demand to them. This is a formal request to settle an outstanding debt, and the first step required as part of any court claim. Additionally, ensure that your invoice Terms include additional interest for late payment.

10. Hiring Contractors & Employees

Can I subcontract my consulting work to others?

Whether you can subcontract depends on your client agreement – some explicitly prohibit it, while others allow it with client notification or approval. If permitted, you must have a written Contractor Agreement with any subcontractor that mirrors your obligations to the client, including confidentiality, IP ownership, quality standards, and deadlines.

What agreements do I need when hiring contractors or subcontractors?

You need a comprehensive Contractor Agreement (also called a Subcontractor Agreement or Independent Contractor Agreement) that protects your business and clarifies the working relationship. This is non-negotiable – verbal agreements leave you exposed to disputes, IP theft, and client poaching.

Essential elements your Contractor Agreement must include: The agreement should clearly state the subcontractor has no direct relationship with your client and that you remain fully liable for the work delivered. Key protections include requiring subcontractors to maintain professional indemnity insurance, assigning all IP to you (so you can transfer it to your client), and including non-solicitation clauses preventing them from working directly with your client for 12-24 months.

Remember that even with subcontractors, you remain responsible for the quality and timely delivery of work to your client, so choose carefully and maintain oversight throughout the project.

We hope you found this guide on how to become a Consultant in Australia helpful.

INFOGRAPHIC: How to Become a Consultant in Australia

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About the Author: Vanessa Emilio

Vanessa Emilio (BA Hons, LLB, ACIS, AGIA) is the Founder and CEO of Legal123.com.au and Practice Director of Legal123 Pty Ltd. Vanessa is a qualified Australian lawyer with 20+ years experience in corporate, banking and trust law. Click for full bio of Vanessa Emilio or follow on LinkedIn.

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