What is a 'Day Rate'

A day rate is the price/cost of a particular service for an entire workday. In some markets, it is referred to as "per diem" (a cost that an organization will pay for one days' work) and often translates to a 7.5 hour work day. Some purchasing organizations prefer a quoted day rate instead of an hourly rate for services. Day rates vary significantly due to the nature of the work and the region/country where that work is performed.


When a worker isn't covered under a salary or is a contract worker, sometimes a rate of pay will be negotiated on a day rate basis. Common examples of when a day rate might be used include the rate of pay for a manual laborer, the price of a hotel room when no overnight stay is utilized, or the price for a contractor to perform work for a client. Day rates vary significantly due to the nature of the work and the region/country where that work is performed. Work that requires more specialized skill will command a higher day rate than work a person can be taught to do on the spot, like digging a ditch or hauling rocks. The region or country where the work is performed will also make a difference. Countries and regions within countries with a higher cost of living will generally pay more for manual labor than emerging countries or regions within developed countries which have a lower cost of living.

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