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.

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 salaries are often necessary if a salaried employee is hired after the first of the year or when a salaried employee doesn't work the full amount of hours agreed upon in their employment contract. Prorated salaries are solely used for salaried workers.

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.

Although salary is prorated to time worked, full benefits are provided all year. For some repairs such as osmotic blisters the warranty is prorated over the five years.

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.

A prorated salary is when an employee is owed the amount of their salary proportionate to the number of days that were worked.

Divide the number of items or days used by the maximum number of items or days to obtain the unit value. Multiply the unit value by the number of days or items to get the prorated amount.