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What To Consider When Becoming An IT Contractor

There is a lot to think about if you want to branch out on your own as an IT contractor. Not only is the transition from corporate work to being in a small business tough, but you’ve got to consider how you’ll deal with all the practicalities

The average salary for an IT Contractor is £65,683, so it can be extremely rewarding when you do your research and preparation. To give yourself the best chance of success, take a look at our guide on what to consider when becoming an IT contractor:


You need to be aware of where you are financially and where you need to be in the next year or so to support growth. Creating a business plan can help you make a budget that supports your goals and identifies what you can and can’t afford.

It would be wise to factor in all potential costs, including IT contractor insurance, accountancy, and tax outlay.

Company type

Almost all contractors work via a limited or umbrella company, but which one you choose will depend on the structure you want to work under. Setting up a limited company means you’ll be the company director and you’re responsible for meeting the company’s obligations.

If you join an umbrella company, you become an ‘employee’ of a provider and you submit a weekly or monthly invoice to receive a salary.

Set your rates

If you’re new to the sector, you might not know what the going rate is for an IT contractor. You don’t want to undervalue yourself but you also don’t want to be overpriced. There are plenty of resources online to help you decide how much to charge clients.

What are the pros of becoming an IT contractor?

Workload management

Working as an independent contractor means you get more control over your workload. You can increase or reduce work in accordance with your schedule and you can better balance your professional and personal life.

Client selection

When it comes to selecting clients, you have a lot more choice and there is no obligation to take on clients you have no interest in.

Professional control

Working contractually gives you the freedom to specialise in the services you offer. You can focus on providing a particular type of IT care and hone your skills related to this service.

What are the cons of becoming an IT contractor?

Lack of security

When you work as an employee with a salary, you’ve got financial security because you receive a payslip every month. This isn’t the case when working contractually, so you may experience changes in your income from one week to the next.

Additional responsibility

Unlike traditional jobs, you’ll have a lot more responsibility on your plate as an IT contractor. You’re unlikely to receive sick pay and other perks like normal employees. You’ll also be responsible for your own financial record keeping and client acquisition.

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