Pro rata is an adverb or adjective meaning in equal portions or in proportion.[1] The term is used in many legal and economic contexts. The hyphenated spellingpro-rata for the adjective form is common, asrecommended for adjectives by some English-language style guides. InAmerican English, this term has beenvernacularized asprorated orpro-rated.
More specifically,pro rata means:
Pro rata has aLatinetymology, frompro, according to, for, or by, andrata,feminineablative of calculated (rate or change).[5]
When liability for atoxic tort or adefective product concerns many manufacturers, theliability undertort law is allocated pro rata.[6] Examples inlaw andeconomics include the following, noted below:
Each of severalpartners "is liable for [her or his] own share or proportion only, they are said to be boundpro rata. An example ... may be found in the liability of partners; each is liable ... onlypro rata in relation to between themselves."[7]
When adebtor files forbankruptcy, and "the debtor is insolvent,creditors 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."[8] "A creditor of an insolvent estate is to be paid pro rata with creditors of the same class."[9]
A worker's part-time work,overtime pay, andvacation time are typically calculated on a pro rata basis.[10][11]
UnderUS Federalregulations, agovernment worker has the right such 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."[12]
TheAmerican Federation of Teachers (AFT), aUSlabor union, argues thatall part-time oradjunct instructors should get pro-rata pay for teachingcollege courses.[13] This is an important issue, as of 2010, for part-timefaculty.[14]
Irishsecondary school teachers are entitled to pro rata pay for part-time work.[15]
UnderBritishemployment law, "Regulations state that, where appropriate, the pro rata principle should be applied to any comparison ... to be given ... holiday."[16]
Likewise, inTasmania,Australia, the law clearly grants workers the privilege of part-time benefits forleave of absence.[17][18] This is granted under theLong Service Leave Act 1976.[19]
Incorporate practice, "a pro-rata dividend means that every shareholder gets an equal proportion for each share he or she owns."[20]
Inbanking, "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)."[20]
Inventure capital, it can refer to the Pro-Rata Participation right and mean "the right to continue to participate in future rounds so that you can maintain your ownership."[21]
Ininsurance,pro rata is used to determinerisk based on the time theinsurance policy is in effect.[22] It may also be used to describeproportional liability when more than one person is responsible for aloss oraccident.[citation needed]
Calculation ofreturn premium of a cancelledinsurance policy is often done using acancellation method calledpro rata. First, areturn 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 thereturn premium. Traditionally, this has been done manually using apaper wheel calculator. Today, it is normally done using anonline wheel calculator.[23]
When acollegestudent withdraws, colleges may refund tuition payments on a pro rata basis.
In theUnited States, a private pilot may pay no less than the pro rata share of the total price of the flight when carrying passengers.[24]
Pro-Ration (pro rata) means if the battery fails anytime within the first two years of service, it is replaced for free. After those first two years, a pro-rated fee is assessed for the replacement. However, the pro-ration (pro rata) is typically calculated from the date the battery was sold.
