What is proration? How subscriptions charge for changes mid-cycle
By SendPay Business · · 2 min read
Proration means charging only for the part of a billing period a customer actually used. It matters most when someone upgrades, downgrades or cancels a subscription part-way through a month.
A worked example
- A customer pays £30 for a 30-day plan, so each day is worth £1.
- After 10 days they upgrade to a £60 plan, worth £2 a day.
- For the 20 days left, the old plan's unused value is £20 and the new plan costs £40.
- So the customer pays the £20 difference now, and the full £60 from the next billing date.
When to prorate
Proration feels fair to customers who upgrade and makes it easier to say yes to a bigger plan. For downgrades, many businesses keep it simple: the lower price starts at the next billing date, with no refund for the current period. Whatever you choose, say so clearly before the customer changes plan.
When to keep it simple
For low-priced plans, the amounts involved can be tiny and confusing on a receipt. Changing plans only at the next renewal is a perfectly good choice if it is explained upfront.
Where SendPay fits
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How much should a mid-cycle plan change cost?
Use the free calculator to work out the prorated charge or credit.
Proration calculator →Read next
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.