day rate

noun
Updated on: 26 Jul 2017

Definition of day rate

:the prescribed amount of pay for a given job of work paid for by the day or hour

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Financial Definition of DAY RATE

day rate

What It Is

A day rate is the daily cost of a good, service or operating a business.

How It Works

Let's say that John Doe is a consultant to media companies. He charges $200 an hour, making his day rate (8 x $200) = $1,600.

In the oil business, a day rate is the daily cost of drilling for oil. It includes the cost of the rig, as well as the pay to the people operating the rig and the supplies needed to run the rig.

Why It Matters

Day rates are a way to calculate the cost of an intermittent or third-party service. They are important parts of calculating operating costs.


Seen and Heard

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