proratedamount

Proratedamount refers to an adjustment to a charge or credit that reflects only a portion of a billing period or service term. It is used when a customer begins, ends, or changes a subscription partway through a cycle.

Calculation is typically based on proportional use of the period. A common formula is prorated_amount = base_amount × (days_in_use ÷ days_in_period). Depending on policy, days_in_use may be the number of days from activation to the period’s end, or the number of days being charged in the current period. Some schemes use per-day or per-hour calculations and may apply rounding rules.

Example: A monthly plan costs $30. If a user signs up on the 10th day of a 30-day month, the period in effect is 21 days, and the prorated charge is $30 × 21/30 = $21. Another example: a yearly plan priced at $120 with a mid-year change may involve crediting the unused portion of the old term and billing the new term on a prorated basis.

Applications: Proration is common in subscriptions, utilities, rental agreements, and refunds for partial periods. It helps ensure charges align with actual service utilization or entitlement.

Considerations include ensuring consistent definitions of the period length (calendar days, business days, or 360/365-day conventions), applying rounding rules, and handling taxes. Policy details also affect whether proration yields a charge, a credit, or both, and how promotions, trials, or upgrades influence the calculation.