What Does Prorated Mean? (2024)

FAQs

What Does Prorated Mean? ›

To prorate is to divide something in a proportional way, based on time. If your new landlord prorates your first month's rent, she only charges you for the days you've actually lived in your apartment.

: divided, distributed, or assessed proportionately (as to reflect an amount of time that is less than the full amount included in an initial arrangement) The catch is that the Dolphins can get back the prorated portion of the $5 million if Madison defaults on the contract.

Prorated pay is about adjusting an employee's salary based on the actual time worked during a specific pay period, rather than paying the full amount no matter what. Think of it as fine-tuning an employee's salary to match the work they've actually done.

What is Prorated Billing? Prorated billing is a form of billing or invoicing customers based on the proportion of the monthly service that's used. In other words, prorated charges ensure that customers are billed only for the number of days that they actually used the service.

What is Prorated? In accounting and finance, prorated means adjusted for a specific time period. For example, if an employee is due a salary of $80,000 per year, and they join the company on July 1, their prorated salary for that year would be $40,000.

Pro Rata Refund means a refund of tuition that has been paid for a portion of the program beyond the last recorded date of attendance.

In short, the meaning of prorated is splitting a numeric value based on the proportion of time passed in the relevant time frame. Commonly used in financial situations, prorated fees may be assessed for a partial month's rent or an employee's wages.

Prorated definition

Proration sounds complicated, but it's actually a very simple concept. Essentially, if you use something for less time than you're scheduled to use it for, it's fair to expect that you'll only be charged for the time you used. That's essentially what we mean by a prorated charge, or prorated amount.

Take the monthly rate and divide it by 30 to get the amount per day. Multiply the rate per day by the number of days to get the prorated sum.

What is an example of prorated billing? ›

Prorated Billing Example

An example of prorated billing is when a customer upgrades from a lower-tier plan to a higher-tier plan or vice versa. For example, a customer always pays for a particular subscription plan on the 1st of the month.

How to calculate prorated charges and credits. Changing your plan or features may result in prorated charges or credits if the change is effective in the middle of your bill cycle. To avoid prorated charges, schedule plan or feature changes to start on the first day of your next billing cycle.

What is prorated rent? Prorated rent is a portion of the rental rate that matches whatever portion of the month you're living in the apartment. So if you rent an apartment and don't move in until the 20th of a 30-day month, your prorated rent would likely be one-third of your regular rental rate.

To prorate is to divide something in a proportional way, based on time. If your new landlord prorates your first month's rent, she only charges you for the days you've actually lived in your apartment.

How Do I Calculate Pro Rata? Calculating the pro rata of items varies because it calculates a proportion of a given whole. Consider a company that charges 20% interest per year. The prorated interest rate would be calculated as (20% / 12) x 6 = 10% if you calculated it over six months.