Pro-rata
Encyclopedia
Pro rata is an adverb or adjective, meaning in proportion. The term is used in many legal and economic contexts. It is sometimes spelled pro-rata, but this is technically a misspelling of the Latin phrase. In North American English this term has been vernacular
ized to prorated.
Pro rata has a Latin
etymology
, from pro
, according to, for, or by, and rata
, feminine
ablative of calculated (rate or change).
or a defective product
concerns many manufacturers, the liability
under tort law is allocated pro rata.
"is liable for his own share or proportion only, they are said to be bound pro rata. An example ... may be found in the liability of partners; each is liable ... only pro rata in relation to between themselves."
files for bankruptcy
, and "the debtor is insolvent, creditor
s generally agree to accept a pro rata share of what is owed to them. If the debtor has any remaining funds, the money is divided proportionately among the creditors, according to the amount of the individual debts." "A creditor of an insolvent estate is to be paid pro rata with creditors of the same class."
pay, and vacation
time are typically calculated on pro rata basis.
Under US Federal
regulations, a government
worker has the right, that, "When an employee's service is interrupted by a non-leave earning period, leave is earned on a pro rata basis for each fractional pay period that occurs within the continuity of employment."
The American Federation of Teachers
(AFT), a US
labor union, argues that all part-time or adjunct
instructors should get pro-rata pay for teaching college
courses. This is an important issue, as of 2010, for part-time faculty
.
Irish
secondary school
teachers are entitled to pro-rata pay for part-time work.
Under British
employment law, "Regulations state that, where appropriate, the pro rata principle should be applied to any comparison ... to be given ... holiday."
Likewise, in Tasmania
, Australia
, the law clearly grants workers the privilege of part-time benefits for leave of absence
. This is granted under the Long Service Leave Act 1976.
In banking, "Pro-rating also refers to the practice of applying interest rates to different time frames. If the interest rate was 12% per annum, you could pro-rate this number to be 1% a month (12%/12 months)."
, pro rata is used to determine risk
based on the time the insurance policy is in effect. It may also be used to describe proportional liability when more than one person is responsible for a loss
or accident
.
student
withdraws, colleges may refund tuition payments on a pro rata basis.
Determine the daily amount of a monthly charge being prorated by dividing it by the number of days in the cycle(30 is normally used by most systems by default). The resulting number is the daily amount. Example: Based on a 30 day bill cycle and a monthly recurring charge of $30, the daily amount is $1.00 ($30/30 days = $1.00).
Determine the number of prorated days. The monthly service charges begin the day service is activated. Example: Service starting on the 20th day of a cycle means there are 10 prorated days.
Multiply the daily amount by the number of days being prorated. This gives you the total prorated amount. Example: $1.00 x 10 days = $10.
Vernacular
A vernacular is the native language or native dialect of a specific population, as opposed to a language of wider communication that is not native to the population, such as a national language or lingua franca.- Etymology :The term is not a recent one...
ized to prorated.
Meanings of pro rata
More specifically, pro rata means:- In proportionalityProportionality (mathematics)In mathematics, two variable quantities are proportional if one of them is always the product of the other and a constant quantity, called the coefficient of proportionality or proportionality constant. In other words, are proportional if the ratio \tfrac yx is constant. We also say that one...
to some factor that can be exactly calculated. - To count based on amount of timeTimeTime is a part of the measuring system used to sequence events, to compare the durations of events and the intervals between them, and to quantify rates of change such as the motions of objects....
that has passed out of the total time. - Proportional RatioRatioIn mathematics, a ratio is a relationship between two numbers of the same kind , usually expressed as "a to b" or a:b, sometimes expressed arithmetically as a dimensionless quotient of the two which explicitly indicates how many times the first number contains the second In mathematics, a ratio is...
Pro rata has a Latin
Latin
Latin is an Italic language originally spoken in Latium and Ancient Rome. It, along with most European languages, is a descendant of the ancient Proto-Indo-European language. Although it is considered a dead language, a number of scholars and members of the Christian clergy speak it fluently, and...
etymology
Etymology
Etymology is the study of the history of words, their origins, and how their form and meaning have changed over time.For languages with a long written history, etymologists make use of texts in these languages and texts about the languages to gather knowledge about how words were used during...
, from pro
PRO
PRO may refer to:* Professional, abbreviation for either a person in a profession or in sports* .pro, a sponsored generic top-level domain* Pro Theme, an Apple Macintosh GUI* Pro Hart , Australian painter nicknamed "Pro" for "professor"-PRO:...
, according to, for, or by, and rata
Rata
Rata may refer to:* Plants of the genus Metrosideros from New Zealand, including** Metrosideros robusta ** Metrosideros bartlettii ** Metrosideros carminea...
, feminine
Grammatical gender
Grammatical gender is defined linguistically as a system of classes of nouns which trigger specific types of inflections in associated words, such as adjectives, verbs and others. For a system of noun classes to be a gender system, every noun must belong to one of the classes and there should be...
ablative of calculated (rate or change).
Torts
When liability for a toxic tortToxic tort
A toxic tort is a special type of personal injury lawsuit in which the plaintiff claims that exposure to a chemical caused the plaintiff's injury or disease.-Different types:...
or a defective product
Product liability
Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause...
concerns many manufacturers, the liability
Legal liability
Legal liability is the legal bound obligation to pay debts.* In law a person is said to be legally liable when they are financially and legally responsible for something. Legal liability concerns both civil law and criminal law. See Strict liability. Under English law, with the passing of the Theft...
under tort law is allocated pro rata.
Partnership liability
Each of several partnersPartnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
"is liable for his own share or proportion only, they are said to be bound pro rata. An example ... may be found in the liability of partners; each is liable ... only pro rata in relation to between themselves."
Bankruptcy law
When a debtorDebtor
A debtor is an entity that owes a debt to someone else. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor...
files for bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
, and "the debtor is insolvent, creditor
Creditor
A creditor is a party that has a claim to the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption that the second party will return an equivalent property or...
s generally agree to accept a pro rata share of what is owed to them. If the debtor has any remaining funds, the money is divided proportionately among the creditors, according to the amount of the individual debts." "A creditor of an insolvent estate is to be paid pro rata with creditors of the same class."
Worker's pay and benefits
A worker's part-time work, overtimeOvertime
Overtime is the amount of time someone works beyond normal working hours. Normal hours may be determined in several ways:*by custom ,*by practices of a given trade or profession,*by legislation,...
pay, and vacation
Annual leave
Annual leave is paid time off work granted by employers to employees to be used for whatever the employee wishes. Depending on the employer's policies, differing number of days may be offered, and the employee may be required to give a certain amount of advance notice, may have to coordinate with...
time are typically calculated on pro rata basis.
Under US Federal
Federal government of the United States
The federal government of the United States is the national government of the constitutional republic of fifty states that is the United States of America. The federal government comprises three distinct branches of government: a legislative, an executive and a judiciary. These branches and...
regulations, a government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
worker has the right, that, "When an employee's service is interrupted by a non-leave earning period, leave is earned on a pro rata basis for each fractional pay period that occurs within the continuity of employment."
The American Federation of Teachers
American Federation of Teachers
The American Federation of Teachers is an American labor union founded in 1916 that represents teachers, paraprofessionals and school-related personnel; local, state and federal employees; higher education faculty and staff, and nurses and other healthcare professionals...
(AFT), a US
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
labor union, argues that all part-time or adjunct
Adjunct
Adjunct may refer to:* Adjunct , words used as modifiers* Adjunct professor, a professor who does not hold a permanent position at a particular academic institution* Adjuncts, sources of sugar used in brewing...
instructors should get pro-rata pay for teaching college
College
A college is an educational institution or a constituent part of an educational institution. Usage varies in English-speaking nations...
courses. This is an important issue, as of 2010, for part-time faculty
Teacher
A teacher or schoolteacher is a person who provides education for pupils and students . The role of teacher is often formal and ongoing, carried out at a school or other place of formal education. In many countries, a person who wishes to become a teacher must first obtain specified professional...
.
Irish
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
secondary school
Secondary school
Secondary school is a term used to describe an educational institution where the final stage of schooling, known as secondary education and usually compulsory up to a specified age, takes place...
teachers are entitled to pro-rata pay for part-time work.
Under British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
employment law, "Regulations state that, where appropriate, the pro rata principle should be applied to any comparison ... to be given ... holiday."
Likewise, in Tasmania
Tasmania
Tasmania is an Australian island and state. It is south of the continent, separated by Bass Strait. The state includes the island of Tasmania—the 26th largest island in the world—and the surrounding islands. The state has a population of 507,626 , of whom almost half reside in the greater Hobart...
, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, the law clearly grants workers the privilege of part-time benefits for leave of absence
Leave of absence
Leave of absence is a term used to describe a period of time that one is to be away from his/her primary job, while maintaining the status of employee...
. This is granted under the Long Service Leave Act 1976.
Investment laws
In corporate practice, "a pro-rata dividend means that every shareholder gets an equal proportion for each share he or she owns."In banking, "Pro-rating also refers to the practice of applying interest rates to different time frames. If the interest rate was 12% per annum, you could pro-rate this number to be 1% a month (12%/12 months)."
Insurance
In insuranceInsurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
, pro rata is used to determine risk
Risk
Risk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...
based on the time the insurance policy is in effect. It may also be used to describe proportional liability when more than one person is responsible for a loss
Loss
Loss may refer to:*A negative difference between retail price and cost of production**Loss leader a deliberate commercial loss made in the expectation of recouping it by profitable sales of other lines...
or accident
Accident
An accident or mishap is an unforeseen and unplanned event or circumstance, often with lack of intention or necessity. It implies a generally negative outcome which may have been avoided or prevented had circumstances leading up to the accident been recognized, and acted upon, prior to its...
.
Insurance cancellation method
Calculation of return premium of a cancelled insurance policy is often done using a cancellation method called pro rata. First a return premium factor is calculated by taking the number of days remaining in the policy period divided by the number of total days of the policy. This factor is then multiplied by the policy premium to arrive at the return premium. Traditionally this has been done manually using a paper wheel calculator. Today it is normally done using an online wheel calculator.College tuition
When a collegeCollege
A college is an educational institution or a constituent part of an educational institution. Usage varies in English-speaking nations...
student
Student
A student is a learner, or someone who attends an educational institution. In some nations, the English term is reserved for those who attend university, while a schoolchild under the age of eighteen is called a pupil in English...
withdraws, colleges may refund tuition payments on a pro rata basis.
Billing
Reading a monthly bill for service that would be prorated.Determine the daily amount of a monthly charge being prorated by dividing it by the number of days in the cycle(30 is normally used by most systems by default). The resulting number is the daily amount. Example: Based on a 30 day bill cycle and a monthly recurring charge of $30, the daily amount is $1.00 ($30/30 days = $1.00).
Determine the number of prorated days. The monthly service charges begin the day service is activated. Example: Service starting on the 20th day of a cycle means there are 10 prorated days.
Multiply the daily amount by the number of days being prorated. This gives you the total prorated amount. Example: $1.00 x 10 days = $10.
See also
- Employee Retirement Income Security ActEmployee Retirement Income Security ActThe Employee Retirement Income Security Act of 1974 is an American federal statute that establishes minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans...
- Legal liabilityLegal liabilityLegal liability is the legal bound obligation to pay debts.* In law a person is said to be legally liable when they are financially and legally responsible for something. Legal liability concerns both civil law and criminal law. See Strict liability. Under English law, with the passing of the Theft...
- Pro rata cancellation
- Pro rata condition of averages
- VestingVestingIn law, vesting is to give an immediately secured right of present or future enjoyment. One has a vested right to an asset that cannot be taken away by any third party, even though one may not yet possess the asset. When the right, interest or title to the present or future possession of a legal...