Developer Rate Calculator

Compare a contractor day rate against the true cost of hiring — NI, pension, recruitment and downtime included.

Permanent Hire

Salary£70,000
Employer NI (15% over £5k)£9,750
Pension (3%)£2,100
Recruitment (~15%)£10,500
Equipment & training (~10%)£7,000
True annual cost£99,350
Effective day cost (220 days)£452
120-day project cost£54,191

Contractor

Day rate£500
Days needed120
NI / pension / recruitment£0
Bench cost when idle£0
Annualised (£110,000)£110,000
120-day project cost£60,000

For 120 days of work, the employee is £5,809 cheaper on paper — but the employee number assumes the hire exists. Add 2–3 months of notice and recruitment time to that side.

Developer Hiring — FAQs

What is a typical developer day rate in the UK?

Senior contract developers in the UK typically charge £450–£700/day, with specialists (e.g. Magento, payments, integrations) at the higher end. Junior-to-mid contractors run £250–£400/day. London rates sit roughly 10–20% above the rest of the UK.

What is the true cost of employing a developer?

Beyond salary: employer NI (15% above £5,000), 3%+ pension, recruitment fees (~15% of salary first year), equipment, software licences, training, and paid leave. A £70,000 salary realistically costs £95,000–£105,000 in year one — around £430–£480 per working day.

Is a contractor cheaper than a permanent hire?

Per day, often not — a £500/day contractor roughly matches the fully-loaded cost of a £70–80k employee. The saving is flexibility: no recruitment fees, no notice period, no bench cost when the work runs out, and a senior contractor starts delivering immediately rather than after a 3-month notice period.

How many productive days does a developer work per year?

Around 220. A full-time year is ~260 weekdays, minus 28 days holiday, ~5 bank holidays, ~5 sick days, and training/meeting overhead. This calculator uses 220 working days for annualisation.

When should I hire a contractor instead of an employee?

When you need senior skills fast, when workload is project-based or uncertain, when you can't justify a permanent headcount, or when you need specialist skills (migrations, integrations, rescues) that your team lacks. Employees win when you need sustained, long-term product ownership.

Does IR35 affect contractor day rates?

For medium/large companies hiring contractors through limited companies, IR35 status determines whether the contractor is taxed like an employee — inside-IR35 rates are typically quoted higher to compensate for the tax difference. Small companies remain exempt from assessing status.

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