Proration
Exactly how mid-cycle charges are calculated when your customer upgrades
When your customer upgrades mid-cycle, they get credit for the days they already paid for on the old plan, and are charged for the remaining days on the new plan. Here's how the math works.
The Calculation
Credit = Old price × (days remaining / days in cycle)
Charge = New price × (days remaining / days in cycle)
They pay = Charge - CreditExample: Simple Upgrade
Your customer is on Starter at $29/mo, paid on January 1.
They upgrade to Pro at $99/mo on January 15 (15 days remaining).
Credit for unused Starter days: $29 × (15/30) = $14.50
Charge for remaining Pro days: $99 × (15/30) = $49.50
They pay today: $35.00
Next full invoice: $99 on February 15Example: Upgrade with Extra Seats
When your customer has extra seats, those are prorated too.
Current plan: Pro $99/mo, 5 included seats, $25/extra seat
Your customer has 8 seats (5 included + 3 extra = $174/mo total)
They upgrade to: Business $299/mo, 10 included seats, $20/extra seat
On January 15 (15 days remaining)| Calculation | |
|---|---|
| Credit for plan base | $99 × (15/30) = $49.50 |
| Credit for extra seats | $75 × (15/30) = $37.50 |
| Total credit | $87.00 |
| Charge for new plan base | $299 × (15/30) = $149.50 |
| Charge for new extra seats | $0 — their 8 seats are now within the 10 included |
| Total charge | $149.50 |
| They pay today | $62.50 |
Notice that your customer's 8 seats are now fully covered by the Business plan's 10 included seats, so they stop paying for extra seats entirely.
Quarterly and Yearly Plans
The same calculation applies — the only difference is the cycle length.
Example
Your customer is on Plan A at $300/quarter (January 1 – April 1).
They upgrade to Plan B at $600/quarter on February 15 (45 days remaining).
Credit: $300 × (45/90) = $150.00
Charge: $600 × (45/90) = $300.00
They pay today: $150.00
Next renewal: May 15Why Downgrades Aren't Prorated
Downgrades take effect at renewal. Your customer already paid for the current cycle and keeps their plan until it expires. Since there's no mid-cycle switch, there's nothing to prorate and no refund.
Why Free → Paid Isn't Prorated
When your customer moves from a free plan to a paid plan, there's no credit to give — the free plan costs $0. They simply pay the full price of the new plan from that day.
Related
- Plan Changes — When proration applies and when it doesn't
- Seats — How seat-based billing works with upgrades
- Invoices — What invoices your customers receive
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