How much can freelance Business Analysts earn per hour, per day?
If you are a Business Analyst considering a venture into the world of freelance, it’s likely that you have built up your knowledge and experience to a specialist level, writes Albi Clack, senior principle consultant at leading STEM recruitment agency Computer Futures.
So you want to freelance in technology?
Your colleagues and friends who have made the transition to contracting as a Business Analyst have been successful, and you feel encouraged to explore freelancing as a Business Analyst yourself. You may have worked in organisations that utilised contract resource and you too now seek the flexibility, variation and financial benefits which only freelancing in IT can provide.
There are a myriad of things to consider before taking the plunge into contracting; its shorter notice periods, your current financial stability, having the confidence that your specific knowledge and expertise is in-demand (and backed up by your experiences), and whether stock will be put into your qualifications. And that’s to name just a few!
Salary as a Business Analyst…
But money (often) matters most, so the key question is, how much can you earn as a freelance Business Analyst, per hour, per day?
In the UK, on a full-time basis, the average salary range for a Business Analyst is between £43,000 and £55,000 a year.
Entry-level salaries for BAs tend to start at around £22,000 a year, in contrast to experienced “Senior” or “Lead” Business Analysts who can expect an annual salary of up to £75,000.
How much can freelance Business Analysts earn, per hour, per day?
Seventy-five thousand pounds-a-year in salary is not to be sniffed at! But here’s the thing Free-Work readers might not realise -- the potential exists to double your earnings as a Business Analyst if you freelance.
The average day rate for a contract Business Analyst is between £450 and 500 a day.
There are multiple factors to this rate and your take-home pay to be aware of, however. The IR35 determination; the industry/sector, and the level of specialism required.
How are Business Analysts generally assessed under IR35; outside or inside?
The client will make an IR35 determination on every role -- ‘outside’ reflective of a B2B engagement and ‘inside’ reflective of an employee relationship. Financially, an inside IR35 role will result in your day rate being taxed at source, so it’s worth calculating your actual take-home pay (after tax) before you formally accept a contract.
Generally speaking, the IR35 status of Business Analyst contracts depends on the risk appetite of the industry and the engaging client and their organisation -- not the role or specialism itself.
We find that the more highly-regulated industries, such as Utilities and Legal & Financial, tend to determine a higher proportion of contractors as inside IR35. Whereas the majority of other private sector customers who augment their teams with contract resource, will engage contractors on an outside IR35 basis, enabling a B2B relationship.
Across the private sector ‘on the ground;’ we have seen contract Business Analysts rates range from £300 a day to £700 a day. Remember, behind each rate, is a customer with a specific profile and set of requirements, and a freelancer with a benchmarked value.
Be prepared to accept a lower day rate for your very first BA contract, as you are effectively at entry-level. The raised expectations and level of autonomy of freelancers are things that are, in effect, ‘earned’ in the contract market, so you will likely need to ‘build-up’ to an average market rate.
How do I secure premium pay as a Business Analyst?
The higher day rates for contractor Business Analysts are offered by customers and commanded by freelancers, due to a range of reasons.
Freelance Business Analysts with specific experience of a sought-after skill, for example, comprehension of complex financial regulations or the detailed understanding of niche technology, will hold a higher value to the customer. Similarly, experience of a specific project could be highly beneficial if the engagement is mid-delivery, as the need to both minimise orientation and maintain velocity would be paramount to the project’s success.
Does location and industry affect a Business Analyst’s pay?
Other factors that can determine Business Analyst pay rates include industry and location. Industries such as Financial Services, Oil & Gas and Pharmaceuticals are more likely to offer higher day rates, with the demand of the requisite skills and experience to meet their requirements.
And in terms of geography, the average day rate in London and the South East of the UK is comparably higher for a BA, than it is in the Midlands and the North. But there are of course exceptions!
In summary, you should be seeking to achieve £450-500 per day as a benchmark day rate as a contract Business Analyst. But remember, if moving from an average Business Analyst salaried permanent role, in time, you could double your earnings.
Senior Principal Consultant at Computer Futures
Albi Clack is a senior principal consultant at Computer Futures, having been with the organisation for 5.5 years. He specialises in the placement of contract Business Analysts across the North of England. Albi's focus is on cultivating meaningful partnerships with customers and contractors, where his consultation enables personal and professional growth.