Contract rates – How much will you earn as an IT contractor?

How much can you earn it contractor

Generally, IT contractors earn significantly more than permanent employees performing similar roles. You could potentially double your gross earnings for performing a similar job.

Contract rate basics

Of course, contractors have to endure the uncertainty of finding short-term work and weathering economic downturns, so these factors inevitably result in higher pay levels.

It’s important to note that even if your gross pay doubles when you make the move into contracting, your net take-home pay is unlikely to be twice as high.

Your take home pay will also be influenced by:

  • How you trade – limited or umbrella company.
  • If your contract work is caught by the IR35 rules.

Contract rates vary greatly according to the location of the contract, the skills and experience required to perform a given role, and other factors such as the general strength of the IT contract market and the attractiveness of the role.

You can establish the typical rates paid for roles by talking with agencies and other contractors.

Online resources and recruiter websites can also provide useful benchmarks for expected rates.

Where can you find IT contract rate data?

Despite the size of the contracting industry, only one online database provides real-time rate-related information.

ITJobsWatch is a handy site that provides high-level data for key roles (such as analysts and developers) and specific skill sets (e.g., Oracle, UNIX, Java, .NET).

Start with this overview of the most popular contract skills. It displays the median daily rate, and the yearly change. You can then look at niche skills and view live contracts.

In the past, other sites like Jobstats provided rough but effective graphs showing the industry’s relative health, but these sites are no longer maintained.

Other useful sources of contract rate information

Aside from ITJobsWatch, there are no other obvious sources of real-time online IT contractor average rates. In fact, there appears to be far less easy-to-digest data online than ten years ago.

Instead, you have to delve a bit deeper to find other handy sources of information.

Here are some useful links to sites we use here at Contract Eye:

  • Reddit is an excellent source for IT contract rate data, although you’ll need to search the existing posts. The Contractor UK board has lots of good posts discussing rates.
  • The Contractor UK forum is another good source for rate information—it’s been online for over twenty years. You’ll have to conduct a search and drill down to find relevant information.
  • Some leading recruitment agencies publish salary and contract rate data, but these days, they like you to provide some information before you download. For example, Langley James and Hays.
  • LinkedIn – the social media engine of choice for contractors – contains plenty of rate information in posts. Once again, you’ll have to search. You’ll find pages like this.
  • Freelancer platforms like Upwork or PeoplePerHour can give an indication of market trends for short-term contracts, though they primarily cater to freelancers not contractors.

Talk to other contractors to get a real insight

Remember, networking is also a powerful tool.

Many contractors find rate information by attending industry events, connecting with peers (particularly on LinkedIn), or joining professional associations such as the BCS (British Computer Society) or other tech-focused groups.

As is often the case, other contractors are a great source of real information for all things contracting.

Our Partner Accountants