# What is pay rate?

Source: https://launch-rec.com/glossary/pay-rate. Category: Commercials. Market: US and UK.

## Definition

The hourly rate paid to the contractor before employer taxes and insurance. It is the input to every bill rate calculation, not the cost of employing them.

## In practice

The pay rate is what the worker sees on their timesheet. What leaves your bank account is the pay rate plus employment burden — payroll taxes, workers' compensation, holiday accrual and any benefits you carry.

W-2 and PAYE contractors carry burden; genuine 1099 or limited-company contractors do not, but they carry classification risk instead. Price the two differently and document why.

## Related terms

- https://launch-rec.com/glossary/bill-rate
- https://launch-rec.com/glossary/employment-burden
- https://launch-rec.com/glossary/worker-classification