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Contracting Pros and Cons

I was trying to think about what to post today when Emma Budd, my current ShareUp buddy, came up with the idea of writing about contracting and given that I started contracting almost exactly 3 years ago, I thought it was worth putting something together. I’ve always contracted as a Developer so experiences might vary with other careers, but generally you will face the same issues. Lets start with the positive bits.


Pay – We may as well get this out of the way first as the extra money is what most people think of first when talking about contracting. I certainly do better financially as a contractor, even the lower rates available tend to work out better than the average developer salaries, plus I feel I have a level of control over my finances that I didn’t have as a permanent employee. It might not always be like this, the UK Government seem determined to make it more difficult for contractors, with yearly tax rises, but at the moment it is still better.

Politics – Of course you’ll still have to deal with people and make a good impression with the people who you are working for, but you should find less need to play the corporate game. You won’t have appraisals, reviews etc, and some places will already regard you more like a consultant or specialist, so will respect your opinion. I personally found this both reduced my stress massively, and increased my confidence.

Variety – This comes from changing contracts periodically and getting to work with different people on different projects. The rewards of this shouldn’t be underestimated, there is potential to learn technologies more rapidly this way and getting to see how different people code is also a great bonus. You’ll also have to ability to work in different locations and may be willing to try something for 3 or 6 months that you wouldn’t risk doing permanently.

Independence – This may be an illusion, as you are always dependant on being able to find work, but I certainly feel more independent being a contractor, if anything I think it’s made me more ‘grown-up’ and responsible.


Benefits – The downside of that extra pay is that you get no benefits, at all. No pension included, no private healthcare, no life insurance, no cycle to work etc. All of those things you have to manage and pay for yourself, which isn’t much fun.

Holiday – OK, so this is another benefit but as a contractor you get no paid holiday. This means you’ll need to take that into account when coming up with your rate, as otherwise you feel that all holiday is lost money, and you’ll start to dread taking days off, or even bank holidays. Christmas is especially bad with a number of places closing down for a period, making for a lean January. You’ll start to price up holidays, and then also add on the lost days pay, and ultimately not feel like having time off, I haven’t had a week off this year and am looking forward to Christmas! On the other hand if you save you can take longer periods off between contracts so a lot of this really is to do with financial planning and discipline.

Career Path – When you work in a permanent job the longer you stay there the more chance you have of going up that company ladder. Unfortunately with contracting you’re more likely to have a role and keep getting future roles which are the same or similar. It’s quite difficult for example to get a contract as a Lead Developer if you’ve never been a Lead Developer, whereas in a permanent job there is a better chance you’ll work up to that role.

Paperwork – If you run your business as a Limited company then the chances are you are going to have a lot of paperwork to do and taxes to understand. Obviously a good accountant will help with this but you are still going to have to do a decent job of managing purchases, invoices, and your money in general to pay Corporation tax, PAYE tax, VAT etc.

Contract End – You knew this was part of the deal but all contracts will end and even if you are really enjoying what you are doing you will have to move on at some point, like The Littlest Hobo. It’s not all bad as mentioned above under Variety, but it is worth remembering.

I think that will do for the moment, I may write one the other way round at some point, the pros and cons of being permanent, although some of it will just be the reverse of the above. For me at the moment contracting suits me much better, I can only see me going permanent somewhere if it was an amazing opportunity, but never say never.

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