Contractor vs Employee, who makes more?

Contractor vs Employee, who makes more?

Contracting has become an increasingly popular career choice in the UK, offering individuals the flexibility and freedom to work on a variety of projects. But what is the average income of contractors in the UK? Let's take a closer look at the numbers.

Understanding the Contractor Market

The contractor market in the UK is diverse, with professionals from various industries choosing to work on a contract basis. From IT consultants to construction workers, contractors can be found in almost every sector. This diversity makes it challenging to determine an exact average income for all contractors.

Factors Affecting Contractor Income

Several factors influence the income of contractors in the UK. These factors include:

  • Industry: Different industries offer varying rates of pay for contractors. For example, IT contractors tend to earn higher incomes compared to those in the creative industry.
  • Experience: Contractors with more experience and a proven track record often command higher rates.
  • Location: The location of work can also impact contractor income. Contractors working in major cities like London typically earn higher rates compared to those in smaller towns.
  • Market demand: The demand for specific skills and expertise can drive up contractor rates.

Industry Averages

While it's challenging to determine an exact average income for all contractors, we can look at industry-specific data to get a better understanding. According to recent surveys, the average daily rate for IT contractors in the UK ranges from £400 to £600. In the construction industry, contractors can earn an average of £200 to £400 per day.

Contractor vs. Permanent Employee

When comparing contractor income to that of permanent employees, contractors often earn higher rates. This is due to the flexibility and additional responsibilities that come with contracting. However, it's important to note that contractors are responsible for their own taxes, insurance, and other expenses, which can impact their take-home pay.


The average income of contractors in the UK varies depending on factors such as industry, experience, location, and market demand. While it's challenging to determine an exact figure, industry-specific data suggests that contractors can earn competitive rates. If you're considering a career as a contractor, it's essential to research the rates in your industry and factor in additional expenses to ensure a realistic understanding of your potential income.

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