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What are Prorations?  

Proration (or prorate) refers to adjusting a charge so a customer only pays for the portion of time a service was actually used. Instead of being billed for a full billing cycle, charges are calculated based on the exact number of days the service was active.

Why Are Charges Prorated?

Prorated charges commonly occur when:

  • A service is started mid-billing cycle

  • A service is changed or upgraded

  • A service is disconnected before the end of a billing cycle

Proration ensures customers are billed accurately and fairly, based on usage rather than a full month they didn’t fully use.

How Prorated Charges Work

Billing systems calculate a daily rate for the service and then multiply it by the number of days the service was active.

Example:

  • Monthly service cost: $60

  • Daily rate: $60 ÷ 30 days = $2 per day

  • Service active for 15 days

Prorated charge:
15 days × $2 = $30

The customer is billed only for the 15 days of service instead of the full $60.

Common Examples of Proration

1. New Service Activation
If a customer starts service partway through a billing cycle, the first bill may include:

  • A prorated charge for the partial month, and

  • The full charge for the upcoming month

2. Service Changes or Upgrades
When a plan changes mid-cycle:

  • The old plan is prorated up to the change date

  • The new plan is prorated from the change date forward

3. Service Disconnection
If service is disconnected before the cycle ends, the final bill may reflect a prorated credit or charge depending on billing policies.