Pro-rata | Meaning and Definition

What is Pro-Rata?

Pro-rata refers to the division of something into parts to form a whole. It does not imply that all components are equal but rather that each element is valued by another. It’s especially beneficial when the exact value of something is difficult to identify on its own but can be simply assigned a proportional value in comparison to anything else. 

Even when you’re not an entrepreneur or in the financial industry, you’ll almost certainly come across pro-rata at a certain stage in life. If you move into a home on a day other than the first of the month, for instance, your owner is liable to prorate your monthly rent.

They will do this by dividing the total month’s rent by the number of days in the month to calculate the appropriate daily rent. The cost will then be calculated by multiplying the number of days you will be in the flat during the first month.