What is proration? How subscriptions charge for changes mid-cycle
By SendPay Business · · 2 min read
- 1Set up the plan once
- 2It renews on the same day each month
- 3Payments arrive without chasing
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.
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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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SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.
Questions people ask
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
Spotted a mistake or something out of date? and we'll fix it. How our guides are made
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. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.