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Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades.

Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated August 5, 2020

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.

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