Prorated

Prorated refers to the proportional distribution or allocation of a sum of money, a period of time, or other resources based on a pre-defined period or segment. It's a method of adjusting a total amount to reflect partial usage or involvement, ensuring fairness and accuracy when costs, benefits, or responsibilities are not fully utilized or incurred. This typically involves calculating a fraction of the total amount corresponding to the specific portion being considered. This technique is widely used in various financial and operational contexts, like billing, insurance, and time management.

Prorated meaning with examples

• The tenant moved in mid-month, so their rent was prorated to cover only the days they occupied the apartment. The landlord calculated the daily rate and multiplied it by the number of days, making it easy to show the cost. This made for a simpler, fairer method.
• When the employee took a leave of absence, their annual bonus was prorated based on the number of months worked during the year. This ensured they received compensation proportional to their contributions. This makes employee satisfaction higher and more effective.
• The insurance company prorated the claim payment, deducting the deductible and then calculating the covered amount based on the policy's terms. This is an industry-standard practice, ensuring fairness.
• We prorated the costs of the shared office space, dividing the monthly expenses amongst the various businesses based on the square footage used. This allowed each business to cover just their proportionate share.
• The subscription service offered a refund that was prorated according to the unused portion of the membership term after cancellation. Customers found this was a positive aspect of the company, showing customer service.