Proration is a billing concept that is applicable to Subscription Products. Subscription products pricing is based on a fixed time e.g., per day or per month or per year etc.

Proration applies when something is changed mid-period to determine the price to charge for the partial period.

MonetizeNow supports the following proration types:

Day-Based
Calendar-Month-Based
Month-Based

Day-Based

In the Day-Based proration method, we use the number of days as the way to calculate proration. More specifically, the proration is decided based on the number of days between the end date and the start date.

Let's understand this concept by using an example.

Let's say the price of a Product is $120/year

We need to determine the price of this product for a period of 6 months, with the following dates.
Start date = Feb 15, 2023
End date = Aug 14, 2023

Here's how Day Based Proration will work in this case:

Day-based proration = Days between (Aug 14 - Feb 15) = 180
Total days in a year starting on Feb 15, 2023 = 365
Proration = 180 / 365
Price = $120 * 180 / 365 = $59.18

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Leap-year consideration
The denominator in the above equation will be 366 in leap years.

Calendar-Month Based

In the Calendar-Month proration, the first and the last month will be fractional

There are three parts to this type of proration:

Use fractional days in the first month, if not a whole month
Count whole months till the end date
For the last month use fractional days, if any remaining

For the example:

Fractional days in first month = 15/28
Whole number of months = 5 (Mar, Apr, May, June, Jul)
Fractional days in last month = 14/31
Proration = 15/28 + 5 + 14/31 = 5.987327189
Price = $120/12 * 5.98 = $59.87

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Leap-year consideration
leap year consideration applies to calculation in 1 and 3 above only

Month-Based

Treats each month the same, no matter how many days there are in the month and all fractional calculations are applied to the final month of the calculation.

Count the number of months starting from the start date
For the last month use fractional days, if any remaining

For example:

Proration = 6
Price = $120 / 12 * 6 = $60

📘
Leap-year consideration
leap year consideration applies to calculation in #2 only.