Contractor rates…

For full rate benchmarking, please contact us with your request

What are the true impacts of IR35 on rates?

Rate differential between Inside IR35 and Outside IR35 contractors not as much as you’d expect but value difference is significant.

As you will see in our rate benchmarking chart, the difference is not as much as you may think.

Average Rates per skillset Sep 2022 v’s Sep 2023

Skillset
IR35 Status
IR35 %
Mean Rate
% change v's Sept 2022
Systems Full Lifecycle
Outside
35.5%
£73.19
11.0%
Systems Full Lifecycle
Inside
65.5%
£73.01
28.4%
Systems I&V
Outside
12.0%
£55.27
-6.9%
Systems I&V
Inside
88.0%
£62.62
12.3%
Electronics
Outside
38.5%
£59.55
13.3%
Electronics
Inside
61.5%
£60.78
31.9%
FPGA
Outside
68.5%
£70.97
14.1%
FPGA
Inside
31.5%
£70.27
9.4%
Software
Outside
56.0%
£67.98
15.0%
Software
Inside
44.0%
£65.79
6.5%
Mechanical
Outside
37.5%
£49.11
11.6%
Mechanical
Inside
62.5%
£47.03
4.8%
Safety
Outside
100.0%
£78.88
12.7%
Supportability
Inside
90.0.%
£57.72
9.4%
Project Manager
Inside
100.0%
£82.87
12.3%
Project Planner
Inside
100.0%
£61.74
9.0%
Cyber Security
Outside
90.0%
£101.18
0.0%

So why is the difference not as much as you would think?

Although there are many other variables such as opportunity to work from home that will impact the contractor rates and attraction, one of the biggest differences could be viewed as the competency of the contractor. Typically, higher calibre contractors are able to secure available Outside IR35 contracts, while those with less experience or technical level may only be able to secure the Inside IR35 contracts.

This means that organisations recruiting for Outside IR35 contractors are not only saving costs in some instances, they’re also getting much better value from the contractor they engage.

As rates continue to rise, the mean rates for existing contractors are already falling behind the average being advertised for some skills when recruiting new contractors.

With the trend for contracting/temporary work/gig economy expected to continue and accelerate in the coming years, identifying how to create competitive advantage in the market to attract the best contingent talent is crucial for organisations. By reviewing and enhancing your engagement proposition to contractors it has the potential for significant impacts on your ability to attract talent and your overall value return.

Salaries
ED&I

Average Rates per skillset Sep 2022 v’s Sep 2023