Fractional CTO UK: What You'll Actually Pay vs Full-Time (October 2025)

You need technical leadership but can't justify a £200,000 salary for a full-time CTO.

You're not alone. Most UK businesses between £1-10M revenue face this exact problem. You need someone who understands technology at board level, can vet vendors, make architecture decisions, and ensure you're not wasting money on development, but you don't need them 40 hours a week.

Fractional CTOs solve this. But what do they actually cost? And when does it make more sense to hire full-time?

I've worked with 15+ UK businesses navigating this decision. This is what the numbers actually look like in October 2025.

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What Is a Fractional CTO? (And What They Actually Do)

A fractional CTO is a Chief Technology Officer who works part-time for your company, typically 1-3 days per week. They provide the same strategic technology leadership as a full-time CTO, just on a part-time basis.

What they actually do:

• Technology strategy and roadmap planning
• Vendor evaluation and contract negotiation
• Architecture decisions and technical due diligence
• Team hiring, management, and mentoring
• Security and compliance oversight
• Board-level technology representation

They're not just consultants who write reports. They take ownership of your technology decisions and outcomes.

What Makes This Different from a Consultant?

Fractional CTO: Ongoing leadership role with accountability. They're part of your exec team, make decisions, and own outcomes. Think partner, not advisor.

Technical Consultant: Project-based expert who implements specific solutions. They execute your decisions, not make them.

You need a consultant when you know what to build. You need a fractional CTO when you don't know what to build or whether you should build it at all.

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Fractional CTO UK Costs: The Real Numbers

UK fractional CTO pricing falls into three models. What you'll actually pay in 2025:

Hourly Rates

Range: £150-400/hour depending on experience

Breakdown:

• £150-200/hour: Mid-level, 5-10 years CTO experience, smaller businesses
• £200-300/hour: Senior, 10-15 years, scale-ups
• £300-400+/hour: Highly specialised (AI, FinTech, etc.), complex environments

When this makes sense: Ad-hoc consulting, short-term projects, trial engagements before committing to retainer.

Most fractional CTOs don't prefer hourly because it creates perverse incentives (billing for time vs solving problems). Expect them to push for retainer.

Day Rates

Range: £800-1,250/day

Typical engagement: 2-4 days per month

Monthly cost: £1,600-5,000

When this makes sense: Project-based work with clear deliverables, temporary coverage whilst recruiting full-time.

Monthly Retainers (Most Common)

Range: £3,000-10,000/month

What you get:

• £3,000-5,000/month: Startups, 2-3 days/month, strategic guidance + architectural oversight
• £5,000-7,500/month: Scale-ups, 3-5 days/month, active team management + vendor oversight
• £7,500-10,000+/month: Established SMBs, 5-10 days/month, near full-time engagement

What's included (typically):

• Fixed monthly hours (16-40 hours)
• Urgent ad-hoc availability (within reason)
• Strategic planning and roadmap development
• Regular check-ins (weekly or fortnightly)
• Email/Slack support between sessions

What's NOT included:

• Hands-on coding (they might review code, but won't write production code)
• 24/7 on-call support
• Unlimited hours

Equity Compensation

Some fractional CTOs (especially for early-stage startups) take reduced cash + equity.

Typical equity: 0.5-2% depending on:

• Company stage (earlier = higher %)
• Time commitment (more days = higher %)
• Cash vs equity mix (lower cash = higher equity)

Example: Seed-stage startup, fractional CTO 2 days/week

• Option A: £5,000/month cash, no equity
• Option B: £3,000/month cash + 1.5% equity

Equity is complex. If you're considering this, get legal advice on vesting schedules and strike prices. Most established fractional CTOs prefer cash unless they genuinely believe in your vision.

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Full-Time CTO UK Costs: The Complete Picture

Nobody tells you this about full-time CTO costs, it's not just the salary.

Base Salary

UK CTO salaries 2025:

• Startups (£1-5M revenue): £120,000-180,000
• Scale-ups (£5-20M revenue): £150,000-220,000
• Established businesses (£20M+ revenue): £180,000-250,000+

Total Compensation Package

But salary is just the start. The full cost:

For a £150,000 salary CTO, your real annual cost:

• Base salary: £150,000
• Employer NI (13.8%): £20,700
• Pension (3-10%): £4,500-15,000
• Bonus (10-20%): £15,000-30,000
• Benefits (private health, etc.): £3,000-5,000
• Equipment (laptop, monitors, etc.): £3,000-5,000 (one-off)
• Recruitment fees (if using agency): £30,000-45,000 (one-off, 20-30% of salary)
• Onboarding cost (lost productivity first 3-6 months): £15,000-30,000

Year 1 total cost: £241,200-300,700

Year 2+ annual cost: £193,200-220,700

Hidden Costs Nobody Mentions

Risk of bad hire:

• Average time to identify wrong CTO: 6-12 months
• Cost to replace: 1.5-2x annual salary (recruitment + lost productivity + fixing bad decisions)
• For £150K CTO: £225,000-300,000 to correct a bad hire

Opportunity cost:

• Full-time CTOs expect full exec package (equity, board seat, decision-making authority)
• Difficult to course-correct once hired
• Locked into their technical preferences and vendor relationships

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Fractional vs Full-Time: Side-by-Side Cost Comparison

Scenario 1: Startup (£1-3M Revenue)

Need: Strategic technology guidance, vendor oversight, architecture decisions. Don't need 40 hours/week.

Fractional CTO (2-3 days/month):

• Monthly cost: £4,000
• Annual cost: £48,000
• 3-year cost: £144,000

Full-Time CTO:

• Year 1 cost: £241,200 (including recruitment)
• Year 2-3 cost: £193,200/year each
• 3-year total: £627,600

Savings with fractional: £483,600 over 3 years

Verdict: Fractional wins. You don't need 40 hours/week of CTO time at this stage.

Scenario 2: Scale-Up (£3-10M Revenue)

Need: Active technology leadership, team building (5-10 engineers), daily oversight of development.

Fractional CTO (3-5 days/week initially, scaling to 4-8 days):

• Monthly cost: £6,000 initially → £9,000 as you scale
• Annual cost: £72,000 → £108,000
• 3-year cost: £270,000 (averaging £90K/year)

Full-Time CTO:

• Year 1 cost: £271,200
• Year 2-3 cost: £206,700/year each
• 3-year total: £684,600

Savings with fractional: £414,600 over 3 years

Verdict: Depends. If you're growing fast and need daily hands-on leadership, full-time starts making sense around Year 2-3. Start fractional, convert to full-time when you hit £8-10M revenue.

Scenario 3: Established SMB (£10M+ Revenue)

Need: Daily technology leadership, managing 10+ person tech team, complex product roadmap.

Fractional CTO (near full-time, 8-12 days/month):

• Monthly cost: £12,000-15,000
• Annual cost: £144,000-180,000
• 3-year cost: £432,000-540,000

Full-Time CTO:

• Year 1 cost: £301,200
• Year 2-3 cost: £220,700/year each
• 3-year total: £742,600

Savings with fractional: £202,600-310,600 over 3 years

Verdict: Full-time makes more sense. At this scale, you benefit from dedicated focus and full-time availability. The savings with fractional aren't worth the limitation.

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When to Choose Fractional CTO

Choose fractional when:

1. You're Under £10M Revenue

Unless you're exceptionally technical and have a large development team (15+ engineers), you probably don't need a full-time CTO.

Most businesses under £10M need 1-3 days/week of strategic technology leadership, not 5 days.

2. You Need Specific Expertise Temporarily

Examples:

• Raising funding (need CTO for due diligence)
• Platform migration or major technical decision
• Evaluating build vs buy for new product
• Security audit or compliance project (SOC 2, ISO 27001)

A fractional CTO can lead these 3-6 month initiatives without 3-year commitment.

3. You're Not Sure What You Need Yet

If you're unclear whether you need a CTO, development manager, or senior developer, start fractional.

Why: A good fractional CTO will help you clarify what you actually need and can even help recruit the right person when it's time to hire full-time.

4. You Want to Test Before Committing

Hiring a full-time CTO who's wrong for your business costs £225,000-300,000 to fix. Starting with 3-6 months fractional lets you test fit before committing to full-time.

Common path: 6 months fractional → convert to full-time if it's working, or the fractional CTO helps you hire the right full-time person.

5. You Need Broader Expertise Than One Person

Many fractional CTOs bring network effects. They've worked across industries and can introduce you to specialists when needed.

Example: Your fractional CTO might not be a DevOps expert, but they know three excellent DevOps consultants they've worked with before.

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When to Choose Full-Time CTO

Choose full-time when:

1. You're Over £10M Revenue with 10+ Person Tech Team

At this scale, you need daily leadership. Team management, culture building, and hands-on oversight become full-time requirements.

2. Your Product IS Your Business

If you're a SaaS company or tech-first business where the product defines your competitive advantage, you need dedicated full-time technology leadership.

Examples where full-time makes sense earlier:

• SaaS platforms
• FinTech
• HealthTech
• AI/ML products

3. You're Building a Large Technical Team Quickly

Hiring 5+ engineers in 6 months requires full-time leadership. Fractional CTOs can guide hiring strategy, but building culture and managing that growth needs dedicated focus.

4. You Need Daily Hands-On Technical Oversight

Some businesses need their CTO in daily standups, reviewing PRs, and making real-time architecture decisions. Fractional won't work here.

5. You're Post-Series A with Clear Technical Roadmap

Once you've raised significant funding and have 18-24 months of clear technical roadmap, a full-time CTO can execute on that vision more effectively than fractional.

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The Hybrid Approach: Start Fractional, Go Full-Time

What smart companies do:

Phase 1 (Months 0-12): Fractional CTO

Investment: £3,000-6,000/month

What they do:

• Establish technical foundations
• Set up processes and standards
• Define architecture and technology stack
• Make initial hires (often a strong senior developer or tech lead)
• Create 12-24 month technical roadmap

Phase 2 (Months 12-24): Increased Engagement

Investment: £6,000-9,000/month (3-5 days/week)

What changes:

• More active team management as team grows to 5-8 people
• Hands-on project oversight
• Regular 1-on-1s with tech team
• Board-level technology reporting

Phase 3 (Months 24+): Convert to Full-Time or Hire Full-Time CTO

Option A: Convert your fractional CTO to full-time (if they're interested and it's working)

Option B: Fractional CTO helps you recruit the right full-time CTO, then transitions to advisory role or hands off completely

Why this works:

• You've tested fit for 24 months before committing to full-time salary
• Your technology foundations are solid before bringing in full-time leadership
• You've saved £200,000-400,000 in Years 1-2
• If converting the fractional CTO, they already know your business intimately

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How to Evaluate Fractional CTO Candidates

What actually matters when hiring a fractional CTO:

1. Industry Experience vs Technical Depth

Question to ask: "Have you worked with businesses in [your industry] at [your stage]?"

Why it matters: A CTO who's scaled a SaaS company understands different challenges than one who's built e-commerce platforms. Industry experience matters more than you think.

Red flag: "I've worked across all industries", this usually means they're generalists without deep expertise anywhere.

2. Actual Availability

Questions to ask:

• "How many clients do you currently work with?"
• "What's your typical response time for urgent issues?"
• "Will you be available for our weekly/fortnightly check-ins?"

Most fractional CTOs work with 3-5 clients simultaneously. If they have more than 5, they're spread too thin. Less than 2, question why.

3. Strategic vs Hands-On Balance

Ask about a recent project: "Walk me through a recent technical decision you made. How did you reach that conclusion?"

Listen for:

• Do they understand business context, not just technology?
• Can they explain technical decisions in business terms?
• Do they balance "best practice" with "what makes sense for your stage"?

Red flag: If they can't explain technical decisions in business terms, they'll struggle with board-level communication.

4. Team Building Capability

Ask: "How would you help us hire our next 3 developers? Walk me through your process."

Why it matters: Fractional CTOs spend significant time hiring and building teams. If they can't clearly articulate their hiring process and assessment criteria, that's a problem.

5. Commercial Awareness

Ask: "We're considering building [feature] vs buying [SaaS tool]. How would you approach that decision?"

Listen for:

• Do they immediately jump to "build" because they love technology?
• Do they ask about cost, timeline, and business impact?
• Can they articulate the financial trade-offs clearly?

Red flag: Technology decisions without business context. Good CTOs think in ROI, not just technical elegance.

6. References from Similar-Stage Companies

Don't just ask for references, ask for:

• "Can you connect me with 2 clients at similar stage to us (£X-YM revenue)?"
• "What specific outcomes did you deliver for them?"
• "Can I see examples of technical strategy documents or roadmaps you've created?"

Anyone can claim expertise. References from similar-stage businesses matter far more than generic testimonials.

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Common Fractional CTO Mistakes to Avoid

Mistake #1: Hiring Based on Technical Credentials Alone

The trap: "They've got 15 years experience as a developer, they'll be a great CTO."

Why it fails: Being a strong developer ≠ being a strong CTO. CTO is a business leadership role that requires strategic thinking, communication, and commercial awareness, not just coding skills.

What to look for instead: Business acumen, strategic thinking, communication skills, track record of hiring and team building.

Mistake #2: Not Defining Success Metrics Upfront

The trap: Hiring a fractional CTO without clear deliverables or success criteria.

Why it fails: 6 months later, you're unsure whether they're delivering value because you never defined what "value" looks like.

What to do instead: Set clear 30-60-90 day objectives:

• 30 days: Technical audit complete, top 3 risks identified, initial roadmap drafted
• 60 days: Technology strategy document approved, vendor evaluation complete, hiring plan created
• 90 days: First hire made or in process, architecture decisions documented, quarterly OKRs set

Mistake #3: Expecting Them to Code

The trap: "Can you also help write some of our backend services?"

Why it fails: You're paying £200-300/hour for strategic leadership. Using that time for hands-on coding is terrible ROI. Hire a senior developer at £400-600/day for that.

What they should do: Architecture decisions, code review, technical hiring, vendor evaluation, strategy. Not writing production code.

Mistake #4: Not Giving Them Decision-Making Authority

The trap: Treating them like a consultant who provides recommendations, not a CTO who makes decisions.

Why it fails: If every decision needs founder approval, you're paying for strategic leadership but not getting it. You get expensive advice, not ownership.

What to do instead: Define their decision-making authority clearly. E.g.:

• Technology stack decisions: CTO decides
• Vendor contracts under £10K/year: CTO approves
• Vendor contracts over £10K/year: CTO recommends, founder approves
• Technical hires: CTO leads process, founder has final say

Mistake #5: Choosing the Cheapest Option

The trap: "This person charges £150/hour instead of £300/hour, let's hire them."

Why it fails: A strong fractional CTO will save you 10x their cost through better vendor negotiations, avoiding bad technical decisions, and hiring the right people first time.

One bad technical decision (wrong platform, wrong hire, wrong vendor) can cost you £50,000-200,000. Don't optimise for hourly rate.

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Real UK Examples: Fractional CTO ROI

Example 1: London FinTech Startup (£2M Revenue)

Situation: Raised seed funding, needed to build MVP, no technical co-founder.

Fractional CTO engagement:

• Cost: £5,000/month (2.5 days/week)
• Duration: 12 months
• Total investment: £60,000

What they delivered:

• Defined technical architecture (AWS, Node.js, React)
• Hired 3 engineers (1 senior, 2 mid-level)
• Built and launched MVP in 6 months
• Established development processes (code review, CI/CD, testing)
• Prepared technical due diligence for Series A

ROI:

• Saved £180,000 vs hiring full-time CTO (£240K total comp - £60K fractional)
• Avoided £80,000 in vendor overspend (AWS setup, avoided overpriced development agency)
• Successfully raised Series A (£3M) with strong technical foundations
• Hired full-time CTO after Series A with fractional CTO's help

Outcome: Clean handover to full-time CTO. Fractional CTO's architecture decisions still serving the company 2 years later.

Example 2: Manchester E-commerce Company (£8M Revenue)

Situation: Legacy platform struggling to scale, technical debt mounting, no senior technical leadership.

Fractional CTO engagement:

• Cost: £8,000/month (4 days/week)
• Duration: 18 months
• Total investment: £144,000

What they delivered:

• Technical audit identifying £200K/year in wasteful spend
• Platform migration strategy (monolith → microservices over 12 months)
• Renegotiated contracts with hosting provider (saved £45K/year)
• Rebuilt development team (let go 2 underperformers, hired 4 strong engineers)
• Implemented proper development processes reducing bugs by 60%

ROI:

• £200K annual savings on wasteful spend
• £45K annual savings on hosting
• Platform now handles 3x traffic without crashes
• Revenue increased from £8M to £15M (not solely due to tech, but tech wasn't the bottleneck anymore)

Outcome: Fractional CTO converted to full-time as company hit £15M revenue. Now a key part of exec team.

Example 3: Birmingham SaaS Startup (£500K Revenue)

Situation: Technical founder left, needed immediate CTO cover.

Fractional CTO engagement:

• Cost: £4,500/month (2 days/week)
• Duration: 9 months
• Total investment: £40,500

What they delivered:

• Stabilised platform (fixed critical security issues within first month)
• Documented entire codebase and architecture (nothing was documented)
• Managed existing 2-person dev team
• Recruited permanent CTO (helped define role, interviewed candidates, made recommendation)
• Handed over to new full-time CTO with full documentation and transition plan

ROI:

• Avoided 6-12 months without technical leadership (would have crippled product development)
• Security issues fixed prevented potential breach (£50K+ in potential damages)
• Smooth handover to full-time CTO (no knowledge gaps, documented everything)
• Total cost £40,500 vs £120,000+ if they'd hired wrong full-time CTO and had to replace

Outcome: Perfect interim solution. New full-time CTO started with clean slate.

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Your Next Steps

How to figure out what makes sense for your business:

Step 1: Calculate Your Actual Need

Ask yourself:

• How many hours/week do we need strategic technology leadership? (Be honest, probably 8-16 hours, not 40)
• What specific outcomes do we need in the next 6-12 months?
• Do we need hands-on daily management or strategic guidance?

If you need less than 20 hours/week and you're under £10M revenue, fractional is probably right.

Step 2: Define Your Budget Reality

Fractional option: £3,000-8,000/month gets you solid strategic leadership

Full-time option: £15,000-20,000/month all-in (salary + NI + benefits + recruitment)

If the £15K-20K/month full-time cost makes you uncomfortable, you're not ready for full-time.

Step 3: Trial with Fractional First

Unless you're absolutely certain you need full-time (large tech team, £10M+ revenue, tech-first product), start with 3-6 months fractional.

Why:

• Lower risk (3-6 month commitment vs 3-year full-time)
• Test the specific person before committing
• Clarify what you actually need
• Option to convert to full-time if it's working

Step 4: Set Clear Success Metrics

Within 30 days, your fractional CTO should deliver:

• Technical audit with top 3-5 risks identified
• Initial assessment of team, processes, and technology stack
• Draft 12-month technology roadmap

Within 90 days:

• Clear technology strategy aligned with business goals
• Measurable improvements (security fixes, process improvements, cost savings identified)
• Hiring plan if you need to grow the team

If they're not delivering this, you hired wrong.

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Need Help Deciding?

I've helped 15+ UK businesses navigate this decision. Sometimes they need fractional CTO services. Sometimes they need something completely different (like a senior developer, not a CTO at all). Sometimes they're ready for full-time.

The answer depends on your specific situation, revenue, team size, technical complexity, growth plans.

Book a free 30-minute call and I'll help you figure out what actually makes sense:

• Assess whether you need fractional, full-time, or something else entirely
• Calculate the real costs for your situation
• Identify what outcomes you should expect in the first 90 days
• Red flags to watch for when evaluating candidates

No sales pitch, just honest advice about what makes financial sense for your business.

Book your free call here

Or email me directly: jake@grow-fast.co.uk

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So Which One Should You Choose?

Fractional CTOs cost £3,000-10,000/month in the UK. Full-time CTOs cost £180,000-350,000/year all-in.

If you're under £10M revenue and don't have a 10+ person tech team, fractional probably makes more sense. You'll save £200,000-400,000 over 3 years and get the strategic leadership you actually need.

If you're over £10M with significant tech team or your product IS your business, full-time makes sense. The dedicated focus justifies the cost.

For most UK SMBs, the smart play is: start fractional, scale their engagement as you grow, convert to full-time when you hit £8-10M revenue or 10+ person tech team.

Don't overthink it. A good fractional CTO will help you figure out when it's time to hire full-time, or help you recruit the right person when that time comes.

Last Updated: October 2025