Pro Rata Calculation Guide: Prorated Rent, Salaries & Retainer Invoices
Pro rata (Latin for "in proportion") is a mathematical principle used to allocate costs, revenues, salaries, or rents proportionately based on time occupied, days worked, or fractional shares held.
Prorated Rent (Move-In Math)
Prorated Rent = (Monthly Rent ÷ Days in Month) × Days Occupied
For $1,800/month moving in on October 20th (12 days active out of 31): ($1,800 ÷ 31) × 12 = $696.77.
Prorated Employee Salary
Daily Salary = Annual Salary ÷ 260 Standard Working Days
For an $80,000 salary starting 6 working days before the biweekly pay cycle ends: ($80,000 ÷ 260) × 6 = $1,846.15.
The Banker's Rule vs. Exact Calendar Days
In commercial accounting, two methods exist: the Actual Calendar Days Method (dividing by 28, 30, or 31 depending on the exact month) and the Banker's Rule (assuming a flat 30-day month / 360-day year). Most residential lease agreements legally mandate actual calendar days.
