Prorate Calculation

Prorate calculations

When setting up a subscription, the first billing can be configured as a prorate. The prorated calculation covers the period from the subscription creation date (sign-up date) to the first billing date. The day rate is determined by the subscription amount, payment interval, and the number of days in each relevant month. Prorates apply only to the subscription amount and exclude any setup payments.

Example 1: Subscription scenario with a prorate

A customer subscribes to a $50 Monthly Membership on May 11th, with billing scheduled on the 5th of each month. The first billing occurs on June 5th. Since the first billing is prorated, the customer pays for the period from May 11th to June 4th.

Plan	Subscription Creation Date	Billing Start Date, Amount	Next Billing Date, Amount
$50 - Monthly,`firstBilling = prorate`	11 May	5 June, $40.55	5 July, $50

Detailed Calculation:

Day Rate Calculation:
1. May has 31 days:
  Day Rate for May = $50.00 / 31 = $1.61 (rounded).
2. June has 30 days:
  Day Rate for June = $50.00 / 30 = $1.67 (rounded).
Prorated Amount Calculation:
1. For May 11th to May 31st (21 days):
  Prorated Amount for May = $1.61 × 21 = $33.87.
2. For June 1st to June 4th (4 days):
  Prorated Amount for June = $1.67 × 4 = $6.68.
Total Prorated Amount: $33.87 + $6.68 = $40.55.

Example 2: Subscription scenario with a full amount

A customer subscribes to a $50 Monthly Membership on May 11th, with billing scheduled on the 5th of each month. The first billing occurs on June 5th, and the customer is charged the full monthly amount regardless of the start date.

Plan	Subscription Creation Date	Billing Start Date, Amount	Next Billing Date, Amount
$50 - Monthly, `firstBilling = full_amount`	11 May	5 June, $50	5 July, $50

In this case, no prorated calculation is applied, and the customer pays the full monthly fee of $50 at the first billing date.