Self-employment paying off for IT contractors

Monday 16 October 2017

Anyone thinking about becoming self-employed is likely to be concerned about their finances. It can be difficult to make the leap into being your own boss if it's not clear how much you will be earning if you do so. Luckily, IT professionals will be pleased to hear that contracting could well be the best financial decision for them.

Recent research performed by QDOS Contractor has found that 40 per cent of IT contractors charge a day rate of more than £500. The average yearly wage for someone working in this industry is just under £45,000, which these freelancers could make in just 90 days, or around four months of five-day working weeks.

In fact, if these contractors were able to work every working day in 2017, they would earn £126,000. Eight per cent of the 711 freelancers surveyed reported charging over £700 for a daily rate, so could potentially make over £175,000 this year.

In fact, very few contractors had a daily rate lower than £300. Only 12 per cent of those surveyed charged lower than this, with the vast majority billing clients £301 and above per day; enough to make the average IT wage in 150 working days. Overall, 20 per cent of the freelancers surveyed said they charged between £301 and £400 per day, while 28 per cent had a daily rate of between £401 and £500.

However, it is important to bear in mind that very few contractors are able - or willing - to work every single day in a year, which will affect your income. You should remember that charging higher rates may bring you more income, but could also put off potential clients who cannot afford your services.

Seb Maley, Qdos Contractor's CEO, said: "In comparison to employment, self-employment will always bring with it added risks and less security, which in many respects counterbalances what might well be perceived as expensive day rates."

Nevertheless, this method of working comes with a large number of benefits. Self-employment means more flexibility, with the ability to work whenever you choose. It also gives you the freedom to decide how you want to work, as well as how much to charge for your services.

With the potential to earn a significant amount of money, it is always worth at least considering moving into self-employment. If you're wondering what your options are, Brookson has a free guide you can download to see whether freelancing is right for you.

By Victoria McDonnell

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