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What is Proration?

Proration is the process of calculating proportional charges and credits when you change your subscription plan mid-billing period. It ensures you only pay for what you use and get credited for unused time.

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How Proration Works

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Basic Concept

When you change plans, Flexprice:
  1. Calculates unused time on your current plan
  2. Credits the unused portion back to your account
  3. Charges for the new plan from the change date
  4. Generates a single invoice with the net amount

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Example Scenario

You have a monthly plan that costs $100/month, and you want to upgrade to a $200/month plan on day 15 of your billing cycle:
  • Days used: 15 days
  • Days remaining: 15 days
  • Credit for unused time: $50 (50% of $100)
  • Charge for new plan: $100 (50% of $200)
  • Net amount due: $50

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Proration Calculations

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Time-Based Proration

Proration is calculated based on the time remaining in your current billing period: 
Credit Amount = (Days Remaining / Total Days) × Current Plan Price
Charge Amount = (Days Remaining / Total Days) × New Plan Price
Net Amount = Charge Amount - Credit Amount

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Billing Period Considerations

  • Monthly Plans: Proration based on days in the month
  • Quarterly Plans: Proration based on days in the quarter
  • Yearly Plans: Proration based on days in the year
  • Leap Years: February 29th is included in calculations

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Proration Examples

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Example 1: Monthly Upgrade

Current Plan: Basic Monthly ($50/month) New Plan: Premium Monthly ($100/month) Change Date: Day 10 of 30-day month Calculation:
  • Days used: 10
  • Days remaining: 20
  • Credit: (20/30) × 50=50 = 33.33
  • Charge: (20/30) × 100=100 = 66.67
  • Net amount: 66.67−66.67 - 33.33 = $33.34

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Example 2: Quarterly Downgrade

Current Plan: Premium Quarterly ($300/quarter) New Plan: Basic Quarterly ($150/quarter) Change Date: Day 45 of 90-day quarter Calculation:
  • Days used: 45
  • Days remaining: 45
  • Credit: (45/90) × 300=300 = 150.00
  • Charge: (45/90) × 150=150 = 75.00
  • Net amount: 75.00−75.00 - 150.00 = -$75.00 (credit)

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Example 3: Yearly Plan Change

Current Plan: Basic Yearly ($600/year) New Plan: Premium Yearly ($1200/year) Change Date: Day 100 of 365-day year Calculation:
  • Days used: 100
  • Days remaining: 265
  • Credit: (265/365) × 600=600 = 435.62
  • Charge: (265/365) × 1200=1200 = 871.23
  • Net amount: 871.23−871.23 - 435.62 = $435.61