Rates of pay for IT contractors
Special update: Click the link for SJD's latest and constantly updated IT Contractor daily rates checker. Just enter your location and skill set to see the current average daily market rate. The rates checker also provides a guide to how much contractors would take home if working through their own limited company.
As an IT contractor, daily rates of pay can be high but vary according to a number of factors including:
- Experience - this includes both technical and business experience
- Skills - the average contract rate can be increased significantly by investing in your skill set
- Location - London and the South East tend to pay the highest rates
- Economic climate - at the moment, you may find that the recession has affected jobs as well as pay rates. However, you may be surprised to know that the demand for IT contractors is still healthy and expected to grow over the next year. Researching jobs sites has shown that although there has been a dip in the number of contract roles the drop in permanent jobs has been far more severe (60% drop in permanent jobs vs just 25% for contractor roles).
Obviously the more sought after the role, the higher the pay, however average rates appear to be around £50-£60 per hour based on a £400 per day rate, as detailed by ITjobswatch.co.uk.
Find below rates and roles as of 27 August 2009:
| Type of job | Daily rate |
No. of contracts |
| Developer | £350-400 | 9,000 |
| SQL | £360-510 | 5,500 |
| Analyst | £350-400 | 8,500 |
| Java | £450-500 | 3,500 |
| C# | £450-500 | 3,000 |
| Banking and finance | £450-500 | 7,000 |
| Consultant | £400-500 | 3,500 |
| Oracle | £400-450 | 4,500 |
| .NET | £350-400 | 3,500 |
| Windows | £300-350 | 4,500 |
Currently the best paying IT jobs seem to be within the fields of .Net, SharePoint, SQL and C with the software market proving it's more resilient than hardware. However, this does change over time based on economic climate, changes in technology and supply and demand.
As a group, IT jobs have seen a 5% increase in daily rate from the same time last year (although we are sure a number of contractors have also seen rates drop). The number of positions have fallen since last year however, at the beginning of August, Contractor UK noted that the IT industry was one of the first industries to start hiring again after the recession. Professionals in IT are more positive than their counterparts in every other major sector.
Negotiating your contract rate is vital as an IT contractor especially when first starting out– it’s likely that you can increase the standard rate by playing on your skill set. You’ll need to take into account:
- State of the IT contract market
- Level of experience you have
- The demand for your specific skills
- Ability to negotiate (very important and something many find uncomfortable)
- Keeness for the job
Other websites and pages that you may find helpful include:
Contractor calculator
Becoming an IT contractor
Limited or Umbrella
Jobstats
ITJobsWatch
One final note, contracting is a life style choice, it can be challenging, however as SJD has 10,000 contractor clients, we can only assume it must also be very rewarding. The worst that can happen is you don’t find contracting is right for you. Financially, any accountant will tell you that working through your own limited company is the most tax efficient way possible. To read more about take home pay you may find thus interesting: Limited or Umbrella along with this case study: moving from permanent to contracting.
Accountancy services for IT Contractors from SJD Accountancy
If you are already an IT Contractor operating through your own limited company, or if you are thinking of setting up as an IT Contractor or even working through an umbrella company and want to go limited, then SJD Accountancy can give you a wealth of information and advice. We provide a low cost fixed-fee accountancy service which has been developed specifically for contractors, freelancers and consultants. We've been acting for clients across the UK since 1992 and have more than 10,000 already.
If you have any question about contracting or would like any further advice please call our New Client Services helpdesk on 0500 152 500 or email jaime.thorpe@sjdaccountancy.com.
We are the only national specialist firm of accountants with offices in all major UK cities, so you’ll never be far from your accountant. SJD also has more qualified staff than any other firm in our market, with qualifications from the following major tax and accountancy bodies - ATII, ATT, ACCA, CA, ACA, FCCA, ACMA. You’ll also be pleased to know that we are one of the lowest priced as well. All of our clients receive:
- Free face-to-face meetings. This is another unique service, only SJD offers free face to face meetings - tax is complicated and sometimes only a meeting will do.
- Unlimited access to your own dedicated accountant. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant face to face.
- Money back service guarantee. All your telephone calls and emails will be answered the same day or we will refund your monthly fee.
- Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market.
We offer an all inclusive low cost monthly package which includes completion of accounts, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, unlimited access to your accountant and all company returns.
All this for a fixed monthly fee of £95 plus VAT, which is one of the lowest prices in the market.
Appoint SJD Accountancy and never worry about your tax or accountancy affairs again!
You may also find the following pages, guides and case studies useful:
Take home pay calculator - How much could you be taking home
Contractor FAQ - All your frequently asked questions and their answers
First time Contracting or Freelancing? - A summary of the alternatives along with pros and cons
Step-by-step Guide to Contracting - Download a FREE copy of our guide
Limited or Umbrella? Can't decide? - We help you decide which is best for you
Take home pay case studies - Examples of contractors using limited and umbrella companies
Expenses Guide - Know exactly what you can claim
Umbrella company guide - Everything you ever wanted to know about umbrella company services
IR35 Guide - A great plain English guide to IR35
