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High day-rate system

A high day-rate system pays an enhanced time-based wage in return for agreed performance expectations or working arrangements. It is not a special system confined to a particular industry and it need not pay separately for each unit produced. The employer relies on agreed output, supervision and other controls to justify the higher guaranteed rate. Evaluate actual productivity, quality and employee response rather than assuming a high wage automatically creates high performance.

Worked example

A firm pays $20 per hour rather than its usual $17 in return for an agreed productive work pattern. For 40 hours, gross basic earnings are $800.

Common mistake

Do not define this as an oil-and-gas work pattern or treat the extra guaranteed time rate as piecework pay.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA MA Supporting September 2026–June 2027
FIA FMA Supporting September 2026–June 2027