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Understanding hourly rates, day rates, and the best pricing model for fractional CTOs.
UK Fractional CTOs charge £175-£600 per hour when billing hourly, but most prefer day rates (£850-£1,600/day) or monthly retainers. Hourly billing is uncommon for ongoing fractional CTO work because strategic leadership doesn't fit time-tracking models. Day rates better reflect the value and commitment of CTO-level work.
Hourly: £175-£250 | Day Rate (8 hrs): £850-£1,200
Hourly: £250-£350 | Day Rate (8 hrs): £1,200-£1,400
Hourly: £350-£600+ | Day Rate (8 hrs): £1,400-£1,600+
Most fractional CTOs avoid hourly billing for ongoing work. Here's why:
CTO work isn't task-based—it's strategic thinking. Architecture decisions, mentoring engineers, and technology strategy happen through conversations, reviews, and deep thinking, not discrete billable tasks. Time tracking undermines the strategic nature of the role.
Effective fractional CTOs need full days to immerse in each client's context—reviewing code, attending meetings, making decisions. Hourly work encourages fragmented time that reduces effectiveness. Day rates ensure focused, high-quality engagement.
Hourly billing creates perverse incentives—more hours = more revenue. This conflicts with a CTO's goal: build systems and empower teams to operate without constant CTO involvement. Day rates or retainers align incentives around outcomes, not time spent.
Time tracking is tedious and distracts from strategic work. Day rates eliminate this overhead—both sides know exactly what they're paying/earning each month. Simplicity and transparency beat precise hour counting.
Hourly billing can work for specific scenarios:
For these scenarios, hourly rates typically run 1.5-2x the equivalent day rate calculation to compensate for context switching and lack of ongoing relationship. Example: £1,200/day CTO might charge £225-£300/hour for ad-hoc work (vs £150/hour if calculated simply).
| Model | Best For | Pros | Cons |
|---|---|---|---|
| Day Rate £850-£1,600/day | Ongoing work (1-3 days/week) | Simple, predictable, full-day focus, aligns incentives | Less granular, requires full-day commitment |
| Monthly Retainer £4k-£12k/month | Predictable scope, defined deliverables | Budget certainty, no tracking, outcome-focused | Requires clear scope definition, less flexible |
| Hourly £175-£600/hour | Ad-hoc work, short engagements (<40 hrs) | Granular billing, flexible time commitment | Time tracking overhead, fragmented work, misaligned incentives |
| Project-Based £15k-£50k | Defined projects (tech DD, security cert, architecture review) | Fixed price, clear deliverables, no surprises | Scope creep risk, less flexibility |
If you're a fractional CTO considering hourly billing, here's how to calculate your rate:
However, most fractional CTOs quote day rates instead: £260/hour × 8 hours = £2,080/day, which they might round to £1,200-£1,400/day to stay competitive while accounting for the fact that not all 8 hours are equally productive.
For Companies:
For Fractional CTOs:
For more on fractional CTO pricing, see: Fractional CTO Cost Guide and Salary Expectations.
Explore opportunities and resources for fractional CTO work.