Puzzled by Hourly and Daily Rates

**malvolio** · 4 August 2005, 10:29

Basically, hourly rates are for people who work an amount of time and worry about getting paid for every little thing, daily rates for fools like me that charge a fixed sum for each day I do work on behalf of the client, be it one hour or twenty. Obviously the trick is to do more of the one hour days than the twenty hour ones - and to make sure you're contractually allowed to up the rate for antisocial things like weekends and Christmas. To be fair, a lot of the time hourly rates are to do with the client wanting to be able to cost his workload accurately.

It used to be a distinction between workers and managers, but that doesn't really apply any more - I know a lot of developers on day rates.

**Rebecca Loos** · 4 August 2005, 14:23

there's many more contracts advertised as a day rate now than they were 4-5 years ago. I think the trend to apply daily rates even for developers, DBAs etc. started 2 or 3 years ago while I was on a "contractors lifestyle break".

I think the expectation on the client's part is that they'll extract from you more than 8 hours out of a daily rate. Not all clients are like this (my last 2 fully expect to pay me overtime if I work more than 7.5 hours a day), but I guess if you ask the question: "what's in it for the client", then surely it is that they will try to play the "professional day" card (euphemism for "do like our permies and work 9-10 hours a day while we pay you for 7.5").

So with all this day rate business, the onus is back on you to try and get it into the contract that any work above 40 hours a week will trigger overtime, and of course any weekend work will be paid at 1.5 or 2 times the normal day rate.

As an example I often do 44, 48, 52 or even 56 hours a week, and charge 5.5, 6, 6.5 or 7 days for the week. Me and the other on-site contractors cleared that very early on on the project with the PM (with whom we have a good relationship) and now it works without problems.

Of course, I am sure some clients will try and make you feel guilty if you work less than the 10 hours than the permies work, or if you try to charge for 6 days just because you have a total hour count of 48 hours in a week. It all come down to managing the relationship with your client, and a contract that has something in it to that effect will always help.

**malvolio** · 4 August 2005, 14:37

It's also an anti-IR35 thing, don't forget. The more you behave like a bsines, the less likely you are to get caught by Hector.

I do not work hours, I deliver things, so how much time it takes is neither here nor there. (Right now, bizarrely, I'm actually delivering a lack of problems, but that's exactly what the client wants!). Charging by the day is therefore merely an accounting convenience from where I sit sinceI don't charge for my time, I charge for my services.

**rootsnall** · 5 August 2005, 09:28

My skill area has been on daily rates for a good decade because I think it was driven mainly by consultancies in the early days. I've never had a problem with it, all the contracts I've had and bothered reading properly said £X per day but then state the hours per day, I think they legally had to do this but in the murky IR35 world I'm not so sure if this still is the norm. If I have worked over the stated hours I would just charge for it or take time in lieu. Infact I prefer it as you are not in a quandry if you should stay and clock up a few more hours for the week. I have worked on sites on hourly rates and some contractors were squeezing every minute no matter how bored and idle they were.

**malvolio** · 5 August 2005, 10:04

It's about Direction and Control. If the contract is telling you how many hours you can/should work, you are under the client's direction - which is not a good place to be for an IR35 defence. If you have a nebulous rate per day worked, and stick to it, you're a lot better off (but not as good as being paid to deliver something tangible, of course). Charging overtime on a day rate is just taking the proverbial IMHO and is something I do not do - but then I get serious money so I'm possibly a little more tolerant of the odd long day.

Puzzled by Hourly and Daily Rates