Fractional CTO vs a full-time hire: what's the real cost difference?

The number on the job ad isn’t the real number

If you’ve started looking into hiring a CTO, you’ve probably seen salary figures somewhere between £90,000 and £150,000, depending on location and how senior a person you’re after. In London that range climbs higher. In South Wales and most of the UK outside the capital, you’re often looking at the lower to middle end of that band for someone genuinely capable.

But the salary is only the headline. Add employer’s National Insurance, pension contributions, likely equity or a bonus scheme to keep them from being poached, recruitment fees (easily 15 to 20% of first-year salary through an agency), plus a laptop, software licences, and the months it takes to find, interview, and onboard the right person. A realistic all-in cost for a full-time CTO often runs 30 to 40% above the base salary, before you’ve factored in the risk of getting the hire wrong.

And getting it wrong is common. Senior technical hires are hard to assess if you’re not technical yourself, which is often exactly why you’re hiring one in the first place. It’s a strange bit of circular logic that catches a lot of founders out.

What fractional actually costs

Fractional CTO arrangements are usually priced by the day or as a monthly retainer for an agreed number of days. Day rates across the UK market for someone genuinely senior tend to sit somewhere in the £700 to £1,200 range, though this varies a lot by experience, sector, and how hands-on the work is. A business taking on, say, two days a month might be looking at a total cost somewhere in the low tens of thousands per year, a fraction of a full-time salary.

Those are ballpark market figures, not a quote. Every engagement is different depending on what’s actually needed.

What you get for the money in each case

This is where the comparison gets more interesting than just the numbers.

A full-time CTO gives you constant availability and deep, day-to-day context on everything happening, someone in every stand-up, every incident, every planning session, and a single person whose full attention is your business.

A fractional CTO gives you senior-level judgement without the senior-level salary, someone who’s likely seen your exact problem before at other companies because they’re not spending all their time in one codebase, flexibility to scale the arrangement up or down as things change, and no long notice period or redundancy risk if priorities shift.

The honest trade-off is availability versus experience-per-pound. A full-time hire is there constantly, but you’re often paying a premium salary for someone earlier in their leadership career, because that’s what your budget stretches to. A fractional CTO usually brings more years of pattern-matching, having sorted out similar messes at other businesses, for a lot less money, but isn’t sitting in the office five days a week.

When full-time genuinely makes more sense

If you’re at the size where technical decisions need making constantly, where the team is large enough that day-to-day people management is a full job in itself, or where investors specifically want a full-time technical leader named on the cap table, a full-time hire is probably right. Fractional isn’t automatically the cheaper, smarter choice for every business at every stage.

A rough way to think about it

If your technical decisions are big and occasional (architecture choices, hiring plans, investment readiness, a major platform change) rather than constant and granular, fractional usually gives you better value: senior judgement applied where it matters most, without paying for hours you don’t need filled.

If you’re not sure which camp you’re in, that uncertainty is itself useful information. It usually means you’re not yet at the size where a full-time technical leader earns their keep, and a part-time arrangement will do the job for considerably less.

The hybrid option nobody mentions

There’s a middle path worth knowing about too. Some businesses start with a fractional arrangement and build towards a full-time hire deliberately, using the fractional period to work out exactly what kind of full-time leader they actually need, rather than guessing from a job description template. Others do the reverse: they bring in fractional support specifically to help hire and onboard a full-time CTO properly, then step back once that person is settled. Neither of these is the “correct” path, but both are more common than the cost comparison alone would suggest, and worth keeping in mind if you’re currently assuming it has to be one or the other, permanently.

Don’t forget the cost of doing nothing

It’s easy to compare these two options against each other and forget the third one sitting quietly in the background: continuing without either. That option isn’t free. It just hides its cost in slower delivery, riskier decisions, and technical debt (the shortcuts that were fine at the time but now slow everything down) building up unchecked. When you’re weighing the numbers above, it’s worth asking honestly what the current approach is actually costing you, even if nobody’s ever written that figure down.