Prorate Calculations for Subscription Model

Prorate Calculations

Prorate will be auto-calculated by Ezypay for first billing in the subscription if your customer subscribes to a plan midway through the intended payment schedule. Recurring billing starts from a future date onwards. If the value calculated by Ezypay is not fitting or if you want to opt out of prorate, you can specify your own amount for the first billing.

The prorated calculation is based on the period from the customer's subscription start date (also known as sign up date) until the customer's payment start date. The day rate will be dependent on the customer's payment interval and recurring billing date. Prorates only apply to the amount on the plan or subscription, not the setup payments.

Enabling Prorate

Prorates can be enabled by setting firstBilling to prorate on plans or subscriptions:

• On plans, you can turn on prorate and set the preferred billing day for your plan. Ezypay will then auto-prorate from the start date of the subscription to the day before the preferred billing day for the created plans.
• On subscriptions, prorate is applied without additional configuration if already configured on a plan. However, you can still change the subscription start date and the recurring billing start date then the system will auto-prorate accordingly as defined in the subscription.

Examples of a Subscription Scenario with a Prorate

Example 1:

A customer joins the club on May 11th and subscribes to a $50 Monthly Membership. Billing for this plan occurs on the 5th of every month. Since the customer can start enjoying the club's services from May 11th onwards and the customer's first payment will not be collected until June 5th, hence, a prorate amount is charged for this customer from May 11th until June 4th.

The day rate for both May and June will be different, given the days in both months differ.

• The day rate for May = $50.00/31 days = $1.61 (after rounding up)
• The day rate for June = $50.00/30 days = $1.67 (after rounding up)

Since there's a different day rate for both months, the pro-rate amount for both months will differ too.

• From May 11th until May 30th, there are 21 days. Hence, the pro-rated amount for May = $1.61 21 days = $33.87*
• From June 1st until June 4th, there are 4 days. Hence, the pro-rated amount for June = $1.67 4 = $6.68*

After getting the respective day rates and pro-rated amount for both months, the final pro-rate amount to be collected will be: $33.87 + $6.68 = $40.55

Example 2:

A customer joins a club on May 11th and subscribes to a $50 Monthly Membership. Billing for this plan occurs on the 5th of every month. The customer can start using the club's services from May 11th onwards and the customer's first payment will only be collected on June 5th. However, you don't want to charge a prorate amount. Instead you want to charge the usual monthly amount as specified in the plan's amount.
The rate for both May and June will be the same as defined in the plan's amount field.