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 rate 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 January 2013:

Type of job Daily rate

No. of contracts 
(last three months)

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 pages that you may find helpful include:

One final note contracting is a lifestyle choice, it can be challenging, however as SJD has 15,000 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 15,000 already.

If you have any question about contracting or would like any further advice please call our New business team on 01442 275789 or email newbusiness@sjdaccountancy.com.