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SJD Accountancy > Resources > Sector Advice > Becoming an IT Contractor

Becoming an IT Contractor

If you work in IT, find out how becoming an IT contractor could benefit you.

Guide to finding a contract

SJD Accountancy > Resources > Sector Advice > Becoming an IT Contractor

There are many reasons why you may choose to work on a contract basis, with money being one of the major factors. Contractors almost always earn more than permanent employees; however, they lose out on benefits such as holiday and sick pay.

Appointing an IT contractor provides employers with the option to bring in additional resources when required.

How much could I earn?

There are many reasons why you might choose to work on a contract basis with money being one of the major factors. Contractors almost always earn more than permanent staff which takes into account the lack of pension, holiday pay and sick pay. Our online take-home pay calculator can show you exactly how much more you could take home by contracting through your own limited company.

The benefits of IT contracting

There are many advantages to becoming a contractor, these include the following:

  • Financial benefits: Typically, contractors are paid more than permanent employees.
  • Flexibility: As a contractor, you are your own boss and can therefore choose a schedule that works for you.
  • Skills development: You will work in a variety of roles and companies, giving you the chance to work on a range of different skills.
Computer screen with arrow showing how you can maximise your income
Graphic of a contract on a clipboard with two signatures

Looking to find your next IT contract?

Our free guide to finding a contract will help you secure your next role.

What’s in the guide?

  • Finding the right contract – Agencies or job boards? We’ve got you covered.
  • Seven secrets to optimising your income – From experience to presentation skills.
  • CV’s, e-CV’s and CV databases – How to make sure your CV is picked up.
  • Five tips when writing your CV – why it is important to keep it up-to-date.
Get the guide

The downside to IT contracting

This is a fairly impressive list of positives, but it’s only fair to point out a few of the negatives as well.

  • Finding contracts: Contractors are responsible for finding contracts.
  • Lack of benefits: You won’t receive the same benefits which permanent employees receive.
  • Financial management: You will need to manage your finances, however a contractor accountant can make this simple.

Limited or umbrella?

limited company

Once you have decided that contracting is the route for you then you will need to decide how you want to work. There are two options available to you:

  1. Working as an employee of an umbrella company
  2. Forming your own limited company

Whichever route you take will depend on your individual circumstances, although working through your own limited company is the most tax-efficient way of working. We have compared both options in our comprehensive guide.

Most Popular Pages

If you need any further help or advice try these most popular links.

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Becoming a Contractor

Calculate Pay

ltd company certificate
Limited Company Formation

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