Pricing Your Fractional Finance Work: A Practical Guide

Pricing is the part of fractional practice that finance professionals handle worst, which is an irony worth noting. People who spend their working lives on margin analysis routinely set their own rate by taking their former salary, dividing by 220 and adding a bit — which produces a number that is both arbitrary and usually too low. This guide covers what the market actually pays, why the day-rate calculation misleads, how retainers change the economics, and how to raise rates without losing the clients you have.

It is written for Financial Controllers, Finance Managers, management accountants and finance business partners who are setting up, or already running, a fractional practice. If you are still deciding whether to make the move, start with our guide to becoming a fractional Financial Controller, then come back here once you are ready to put a number on your time. We also cover IR35, VAT, professional indemnity insurance and contracts.

Why the salary-divided-by-days calculation is wrong

The instinct is to price against what you earned. A £95,000 Financial Controller divides by 220 working days, gets £432, rounds to £450, and feels they have priced fairly. Three things are missing.

Employment cost, not salary. That £95,000 cost the employer closer to £114,000 with National Insurance, pension and benefits — employer National Insurance rose to 15% in April 2025, and current rates are on gov.uk. The honest comparator is £518 a day, not £432.

You will not bill every working day. Business development, admin, holiday, illness and the gaps between engagements are real. A realistic fractional practitioner bills 140–180 days a year, not 220 — and the rate has to carry the unbilled time.

And you are not selling time, you are selling accountability. The client is buying someone answerable for the numbers being right, which is why a fractional FC at £4,000 a month is compared against a £114,000 permanent hire rather than against an hourly rate.

Work it back properly: to earn the equivalent of a £95,000 package at 160 billable days, with practice costs, you need roughly £750 a day — which is at the very top of the London range for a Financial Controller and above it everywhere else. The realistic conclusion is that fractional pays better than employment through volume of clients and rate discipline, not through the day rate alone.

Practice costs are easy to underestimate, so list them before you set a rate: professional indemnity insurance, your professional body subscription and CPD, accountancy software and a laptop, an accountant for your own company, travel that clients will not reimburse, and the pension contributions an employer used to make on your behalf. Together they commonly run to several thousand pounds a year.

What the market pays

Role (day rate)	London / South East	Regional UK
Fractional Management Accountant	£300–£425	£275–£375
Fractional Finance Manager	£350–£475	£325–£425
Fractional Financial Controller	£405–£650	£355–£490
Fractional FC — regulated or complex	£555–£750	£490–£565
Fractional Finance Business Partner	£400–£600	£350–£500
Fractional Finance Director	£600–£900	£525–£775
Fractional CFO	£750–£1,300	£565–£975

Full benchmarks are in our fractional FC rates guide, fractional CFO rates and the interim finance rate card. The Financial Controller rows follow those guides: in London a newly fractional FC typically charges £475–£560 a day and a senior FC with private equity or complex group experience £650–£750, with the South East a step lower and the Midlands and North lower again.

Qualification — ICAEW, ACCA or CIMA — is assumed at these levels rather than priced. Three factors move you within the band: scarcity of the specific experience — regulated, consolidation, systems implementation and sector depth all price up; the state of what you are inheriting, since a rescue prices above maintenance; and whether the client has an alternative. A business that has already tried and failed to recruit permanently is a different conversation from one comparing three fractional providers.

Day rate or retainer?

For anything ongoing, retainer, and the reasons run both ways.

For the client: a predictable monthly cost that sits in the budget, no invoice surprises, and no conversation about hours that discourages them from asking a question.

For you: predictable income, no time recording, and an engagement defined by outcomes rather than attendance — which is where the value actually is.

A retainer is normally expressed as days per month at a modest discount to the day rate — five per cent is typical, ten is generous. The discount buys commitment and predictability, and it is worth it.

Day rates remain right for genuinely variable work, for a first engagement where neither side knows the shape yet, and for bounded projects — a systems implementation, a first audit, a consolidation build — which should be priced separately from the ongoing retainer rather than absorbed into it. Our guide to fractional FC engagement models sets out how retained, project and hybrid arrangements are usually scoped.

The retainer arithmetic

Days/week	Days/month	At £500/day	Typical retainer	Client comparison
1	~4.3	£2,150	£2,000–£2,400	vs £114k permanent
1.5	~6.5	£3,250	£3,000–£3,600	—
2	~8.7	£4,350	£4,000–£4,800	—
3	~13	£6,500	£6,000–£7,200	—

The right-hand column is the one to keep in mind during a pricing conversation. A client paying £4,200 a month is spending £50,400 a year for senior finance accountability — against £114,000 fully loaded for the permanent equivalent, with recruitment cost, notice period and employment risk attached. Framed that way the conversation is straightforward, and it is the framing our guide to outsourced FC services uses with clients.

The table uses £500 a day to keep the arithmetic simple. At London FC rates the same shapes cost more: our rates guide puts one day a week in London at roughly £29,000–£39,000 a year and two days at £52,000–£68,000, against £82,000–£140,000 all-in for a permanent Financial Controller. The comparison favours the client at every level, which is the core of the case for fractional Financial Controllers.

What to price separately

Four things that should never be absorbed into an ongoing retainer, because they destroy its economics.

Bounded projects — a systems implementation, a first consolidation, an audit remediation. Scope them, price them at a project rate, and deliver them alongside rather than inside the retainer.

Transaction support. Due diligence and fundraising are intense, unpredictable and higher-value; they warrant a separate rate.

Anything below your level. If the client needs bookkeeping, they need a bookkeeper — and helping them find one is more useful than doing it yourself at FC rates.

And genuine scope expansion. The commonest way fractional engagements become unprofitable is quiet growth: a bit more each month until two days is doing three days’ work. Raise it early, factually, and re-scope. Clients almost always accept it; the difficulty is entirely in the raising.

Raising rates

Fractional practitioners are notoriously bad at this, and the cost compounds. The two commonest pricing mistakes are related: anchoring to an old salary, which understates the number by a third before unbilled days are counted, and then never raising it. Four practical points.

Review annually, on a date. Deciding in advance that you review every January removes the question of whether now is the right moment.

Raise for new clients first. If raising existing rates feels difficult, price new engagements higher and let the average move. Within eighteen months the portfolio has repriced itself.

Give notice and a reason. Two or three months’ warning, and a factual basis — market rates, the scope as it has developed, the length of the relationship. Clients budget annually and dislike surprises far more than they dislike increases.

And accept that you may lose one. A client who will not accept a reasonable increase after two years is usually the one taking most of your time for least of your money. Losing them creates capacity for a better-priced engagement, which is generally a good trade.

The portfolio view

One final piece of arithmetic that people miss. Your effective rate is not what you charge; it is what you earn divided by all the days you work, billed or not. A practitioner charging £600 a day but billing 130 days earns less than one charging £500 and billing 175.

That means utilisation is at least as important as rate, and the levers on it are different: retainers rather than ad-hoc work, a referral network that keeps the pipeline warm, and enough clients that losing one is inconvenient rather than serious. Three or four retained clients at one to two days each is the shape most successful fractional practices settle into. Our portfolio FC productivity framework covers running several clients at once.

IR35 and how you are engaged

The same day rate can leave you with very different take-home pay depending on how you are engaged. Most fractional finance professionals work through their own limited company (a personal service company, or PSC); some work through an umbrella company or on a part-time fixed-term contract. Our comparison of umbrella, PSC and fixed-term arrangements covers the mechanics of each.

If you work through a PSC, the off-payroll working rules — usually called IR35 — decide whether each engagement is treated for tax as if you were an employee of the client. For medium and large private-sector clients and all public-sector bodies, the client makes the status determination and must give you a status determination statement. For small private-sector clients, your own company makes the assessment. HMRC’s guidance on understanding off-payroll working (IR35) sets out who is responsible, and its check employment status for tax tool is the starting point most clients use.

Status depends on the facts of each engagement — control, substitution and whether the relationship looks like employment — not on the label in the contract. Genuine fractional work, with several clients, your own methods and defined deliverables, often points away from employment, but no engagement is outside IR35 automatically. What matters for pricing is the consequence: if an engagement is inside IR35, tax and employee National Insurance are deducted at source and much of the efficiency of working through a company falls away. Many practitioners quote a separate, higher rate for inside-IR35 work, or decline it. Our guide to employment tax, IR35 and benefits in kind covers the wider rules, and it is worth taking specialist advice before you sign your first engagement.

VAT registration and quoting your rate

Your company must register for VAT once its taxable turnover for the previous twelve months goes over £90,000, or if you expect it to exceed that figure in the next 30 days alone; the rules are on gov.uk. The test is rolling, so a practice billing £500 a day for 180 days will cross the threshold during its first full year. You can register voluntarily below it.

Always quote day rates and retainers exclusive of VAT, and say so in your proposal. VAT-registered clients reclaim it, so for them it changes nothing. Smaller clients that are not registered bear the full 20%, which makes your effective price a fifth higher — worth knowing before you quote a start-up. For the technical side, see our guide to VAT for finance teams.

Professional indemnity insurance

Professional indemnity (PI) insurance covers claims that your advice or work caused a client loss. Many clients ask to see a certificate before you start.

Check your professional body’s rules too. ICAEW, ACCA and CIMA each have their own definitions of public practice, and providing accountancy services to several clients through your own company can, depending on the work, bring you within those rules and the practising certificate and PI requirements that go with them. Ask your institute before you start rather than after. Whatever the answer, the premium is a practice cost and belongs in the day-rate calculation above.

Contracts that protect your pricing

A good engagement letter does as much for your rate as the rate itself, because it is where scope creep is either prevented or allowed. Whether you contract directly or through an agency, make sure the terms cover:

• Scope and days — the deliverables and the number of days a month, with a mechanism for additional days at the agreed day rate.
• Rate review — an annual review date written in, so the conversation is expected rather than awkward.
• Payment terms — invoicing monthly in advance for retainers, with a clear payment period and late-payment terms.
• Notice — a notice period on both sides, commonly one to three months for ongoing retainers.
• Project work — a statement that bounded projects and transaction support are scoped and priced separately.
• Liability and insurance — a reasonable cap on liability, consistent with your PI cover.
• Working practices — terms that reflect how you actually work, which also matters for IR35: your own methods, your own equipment, and a right of substitution where realistic.

If you are placed through a recruitment firm, its terms with the client sit alongside your own; read both. Our guide to interim versus fractional finance explains how each model is usually contracted, and our first 90 days guide shows what clients expect to see delivered once you start.

A pricing checklist before your next proposal

• Work your rate up from target income, realistic billable days (140–180) and practice costs, not down from an old salary.
• Offer ongoing work as a monthly retainer at no more than a five to ten per cent discount.
• Confirm the IR35 position and who is making the determination.
• Quote exclusive of VAT and track your rolling twelve-month turnover against £90,000.
• Have PI insurance in place and check your professional body’s rules.
• Put a rate review date in the contract and in your diary.

Frequently asked questions

What day rate should a fractional Financial Controller charge?

In London, typically £475–£750 a day depending on experience and complexity, with the South East at around £405–£640 and the Midlands and North at around £355–£565. Regulated, consolidation and private equity experience sit at the top of each range.

Should I charge a day rate or a monthly retainer?

A retainer for ongoing work, usually expressed as days per month at a five to ten per cent discount to your day rate. Use a day rate for a first engagement whose shape is unclear, for variable work and for bounded projects.

Does IR35 apply to fractional finance work?

It can. Each engagement is assessed on its own facts. Medium and large clients make the determination themselves; for small clients your company does. If an engagement is inside IR35, price it accordingly or decline it.