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‘To contract or not to contract ' is a phrase most tech professionals have muttered to themselves at some point in their IT career.

And in 2026, the UK technology job market is seeing a clear split. 

Permanent tech jobs give stable pay, company benefits, and structured career growth, but employers sometimes shy away from permanent hires because of higher costs in the long run. Contract IT jobs are growing fast, especially in in-demand fields including cloud computing, AI, and cybersecurity. 

Every January, professionals from all sectors contemplate job moves, and for IT specialists, further options arise in the form of permanent or contract roles. The best choice for you depends on your financial needs and long-term career goals. Here’s a guide to the benefits of both. 

Permanent IT roles: Security and belonging

Working in a permanent tech job gives stability, a regular salary, and the security of a benefits package such as private healthcare, pensions, paid annual leave, and sick leave. Permanent roles provide structured career progression and opportunities to grow into leadership positions.

You become part of a team, and companies offer training and development to help you grow. Yet, with rising employer costs, and the recent Employer Bill Act, many firms are slowing down on permanent hiring and becoming more selective about headcount.

Contract IT Roles: Freedom and fast rewards

Contract roles in tech are booming, driven by the need for niche and in-demand skills in areas where UK employment figures are seeing significant growth. Employers use contractors to fill skills gaps and deliver time-sensitive projects without long-term commitment.

Contract IT roles offer freedom and higher financial rewards. These roles can pay between two and three times more than equivalent permanent roles. Contractors can out-earn their permanent peers, pick the projects they want, and often enjoy remote work flexibility. And there is the added benefit of moving across industries and the independence of being their own boss.

But before we jump into a simple comparison, it’s important to unpack one of the biggest financial and legal caveats in contracting: IR35 and the cost of going it alone. This is where the higher headline rates meet real‑world deductions, employer responsibilities and the nitty‑gritty of tax rules, all of which can shape how much you take home.

IR35 and financial management

IR35 rules make IT contracting more complex, and this must factor into your financial planning. Being deemed 'Inside IR35' means PAYE tax is deducted at source, reducing take-home pay compared to an 'Outside IR35' status, where you retain self-employed tax advantages. 

Permanent vs. Contract: A quick comparison

Understanding the trade-offs

Permanent tech jobs are usually associated with stability. Yet, it is worth noting that in recent years there have been heavy layoffs in the tech industry. There were 123,941 employees laid off from 269 tech companies in 2025. This comes from the online tracker layoffs.fyi. It’s important to recognise that permanent roles are not immune to redundancies.

When it comes to IT contracting, the high contract day rate is not pure profit; it must cover costs that permanent employers normally bear, including Employer's National Insurance Contributions (NICs), your self-funded pension, and professional indemnity insurance. Crucially, the rate must also compensate for time off.

With permanent roles, there is more potential for paid training and development, whereas contractors will need to learn on the job, self-fund certifications, and upskill in their own time. 

What’s best for your tech career in 2026?

With digital transformation accelerating, companies across all sectors are hiring more tech professionals. Choosing between a contract and a permanent tech job depends on your personal goals and risk tolerance.

Consider a permanent job if:

• You want a stable income.
• You want comprehensive benefits (pension, paid leave, etc).
• You need long-term security or have dependents.
• You are starting a new career and need support or mentorship.
• Your goal is to become a manager, head of department, or senior leader within one organisation.

Go for contracting if:

• You want to earn more in a shorter amount of time.
• You can manage your own taxes and time off.
• You enjoy working on different projects, learning new technologies fast, and moving across industries.
• You prefer maximum flexibility and independence over corporate structure.
• You are confident in networking and quickly secure new work when a contract ends.

The good news is that today’s companies rely on both, mixing permanent staff to build stable core teams and contractors to plug urgent skill gaps. The key is to align your choice of role with your stage of life and career aspirations.

Whether you're looking for a permanent or contract role in 2026, NU Concept Solutions can help.