Often used in a contracting or consulting role, Pay-Rate, or PR$/hr, is simply the amount paid, pre-tax, to the contractor or consultant per-hour of labor. In a Direct Hire situation, pay-rate may be calculated as the annual salary of the potential contractor.
Taxes and other deductions the employee may select are taken out of the pay-rate. Furthermore, the employer must pay taxes, insurances, and other liabilities on behalf of the employee as well.
In a contract/consulting situation, the agency or service charges the client a flat bill-rate, from which the consultant’s pay is deducted from.