How to become a self-employed software engineer: the 7-step plan

If you’re scientifically or mathematically minded, love solving problems, and keep up with current technology, software engineering might be the role for you. An emerging trade that evolves with technology, software engineering takes drive, dedication, and a genuine passion to succeed.

If this sounds like you, read on to find out how you can become a self-employed software engineer.

How to start your own software engineering business

Along with all the above technical skills, there are certain skills you’ll need to know in order to become self-employed. As many different trades and industries can benefit from the help of a software engineer, being a freelance software engineer comes with many opportunities.

Self-employed people must be organised, committed, and have excellent communication skills in order to market themselves and manage the day-to-day responsibilities of running a business. As a subject matter expert, you’ll also need to be able to explain and justify complex technical issues to people who may not have a strong understanding of software.

Our guide will help you combine these skill sets in order to begin your own software engineering business.

1. What is a software engineer?
2. Types of software engineers
3. How long does it take to become a software engineer?
4. Setting your self-employed software engineer salary
5. Finding work as a self-employed software engineer
6. Starting out as self-employed
7. Choosing your software engineer insurance

1. What is a software engineer?

So what does a software engineer do, exactly? Software engineering roles all share similar responsibilities but the role can have many different names. The benefit of being self-employed is that you can choose your own title – but when you’re looking for work it’s important to note that your role may have different titles depending on the client.

Some additional job titles for software engineers include:

• software programmer
• software developer
• using the name of a specific programme language, such as Java or C# programmer
• any use of ‘systems’ or ‘database’ instead of software

Regardless of what you decide your job title is, your responsibilities will be roughly the same. You’ll be creating and maintaining computer software to support whatever business you’re working within. This work will be constantly evolving as new technologies emerge, so you’ll also be responsible for advising on new strategies and directions as they become available.

You’ll work with a variety of teams from product, analysts, marketing, and more to support business needs. You’ll need to be skilled in software and coding and be able to diagnose, troubleshoot, and fix software errors.

2. Types of software engineers

As a software engineer, you may have a speciality you tend to focus on in your work. This could come from previous experience and training or naturally develop through a particular passion or interest. Some software engineering specialisms include:

• front-end engineering
• back-end engineering
• testing or quality assurance (QA)
• security or data

3. How long does it take to become a software engineer?

Software engineers are subject matter experts but how you gain this knowledge can come from many different routes. You may study a degree or college course in a related subject or join a software engineer apprenticeship scheme.

The most important thing is that you get practical experience alongside the theoretical. Many university degree programmes will require you to do practical assignments allowing you to put theory into practice – while others may include internships or placements in companies for you to learn on the job.

Some good degree subjects which give you the skills to be a self-employed software engineer include computer science, IT, maths, and electronics.

4. Setting your self-employed software engineer salary

One of the main benefits of being self-employed is that you can set your own hours and salary. This means that as you gain more experience and a strong reputation in the industry, you can charge more for your services.

The average annual salary for software engineers employed by companies is between £25,000 and £50,000 – with experienced software engineers earning more than £70,000 (National Careers Service).

As a self-employed software engineer, your salary will vary depending on where you live, how many hours you work, and what you charge. If you’re just starting out, the average salary for a self-employed engineer on Upwork is £14 an hour.

You’ll charge your clients through an invoice. Read up on how to create an invoice with our free template here.

5. Finding work as a self-employed software engineer

You can find software engineering work on online freelancing websites or contract work on job advertisements. You may even have an online portfolio displaying your work and letting potential clients reach out to you.

To find work, you’ll need to market yourself effectively. Not only will your previous work experience be useful here, but so will other more general skills which can set you apart from other applicants.

Communication

When you’re self-employed, you’ll be working with a large variety of people and companies – many of whom will be hiring you because they don’t have the skills or resources to do the work themselves. You’ll need to be a great communicator and be able to explain technical concepts to others. This is a great skill to demonstrate when advertising your services.

Equipment

There’s no doubt that as a software engineer, you probably already embrace technology – but it goes without saying that you’ll need to have a good computer that can run all the software you’ll be working on.

Client relations

As with any self-employed work, client retention is always a good idea. Keeping a good working relationship with your clients means that they’re more likely to keep you in mind when future work opportunities come up.

6. Starting out as self-employed

But before you take on any clients, it’s crucial that you’re officially registered as self-employed.

There are two ways to do this, which will differ depending on how you plan to work. One way is to register as a sole trader. This involves telling HMRC that you’re self-employed and then paying tax through Self-Assessment, as well as paying Class 2 and 4 National Insurance contributions.

Another option is to set up your own limited company. This way, you can market yourself as more of a business than as a sole trader. Unlike registering as a sole trader, your company will have a legal identity separate to that of its directors and shareholders. This has a range of advantages and disadvantages, so make sure to research which route best suits your business goals.

You may take on work as a self-employed contractor for another company – such as working on a project in another business on a freelance contract. Make sure you understand the off-payroll working rules if you’re working as a contractor through your limited company. It’s important to be sure that you know whether your contract is inside or outside IR35.

Read our guide to bookkeeping in order to keep track of all your finances.

7. Choosing your software engineer insurance

You might not think you need insurance as a self-employed software engineer, but there are still risks involved in the role. Perhaps your software causes accidental damage to someone’s property – or somebody trips over your laptop cable when you’re working onsite. Insurance means you’re protected when problems do happen.

And if your software engineering business goes well and you hire employees, employers’ liability insurance is a legal requirement.

Simply Business offers software developer insurance and IT consultant insurance, so you can find a cover that works for you.

Are you a self-employed software engineer? Let us know your best tips for starting out in the comments below.

More small business guides and resources

• What is a freelancer and how can you become one?
• The self-employed guide to Self Assessment tax returns
• How to start a business
• Is business insurance a legal requirement?