Time Charter Commission is calculated as what percentage of the periodic time charter hire payments?

Time Charter Commission is calculated as what percentage of the periodic time charter hire payments?

• A. 1.25% of the periodic time charter hire payments
• B. 0.5% of the periodic time charter hire payments
• C. 2.0% of the periodic time charter hire payments
• D. 1.0% of the periodic time charter hire payments

Answer: (A)

Time charter commission is calculated as a fixed percentage of each periodic hire due, not on the entire total hire upfront. The standard rate used for time charters is 1.25% of every periodic time charter hire payment. So, for each payment period, you multiply that period’s hire by 0.0125 to determine the broker’s commission. For example, if the monthly hire is 100,000, the commission that month would be 1,250, and over the charter term the commissions accumulate accordingly. The other percentages would under- or overcompensate compared with the common practice for time charters.

Time charter commission is calculated as a fixed percentage of each periodic hire due, not on the entire total hire upfront. The standard rate used for time charters is 1.25% of every periodic time charter hire payment. So, for each payment period, you multiply that period’s hire by 0.0125 to determine the broker’s commission. For example, if the monthly hire is 100,000, the commission that month would be 1,250, and over the charter term the commissions accumulate accordingly. The other percentages would under- or overcompensate compared with the common practice for time charters.