What is a Day Rate?
A day rate is the daily cost of a good, service, or operating a business.
How Does a Day Rate Work?
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 Does a Day Rate Matter?
Day rates are a way to calculate the cost of an intermittent or third-party service. They are important parts of calculating operating costs.