''Pro rata'' is an adverb or adjective meaning in equal portions or in proportion. The term is used in many legal and economic contexts. The hyphenated spelling ''pro-rata'' for the adjective form is common, as recommended for adjectives by some English-language style guides. In

American English American English, sometimes called United States English or U.S. English, is the set of varieties of the English language native to the United States. English is the most widely spoken language in the United States and in most circumstances ...

this term has been

vernacular A vernacular or vernacular language is in contrast with a "standard language". It refers to the language or dialect that is spoken by people that are inhabiting a particular country or region. The vernacular is typically the native language, n ...

ized to ''prorated'' or ''pro-rated''.

Meanings

More specifically, ''pro rata'' means: * In proportionality to some factor that can be exactly calculated * To count based on an amount of

time Time is the continued sequence of existence and events that occurs in an apparently irreversible succession from the past, through the present, into the future. It is a component quantity of various measurements used to sequence events, t ...

that has passed out of the total time * Proportional

ratio In mathematics, a ratio shows how many times one number contains another. For example, if there are eight oranges and six lemons in a bowl of fruit, then the ratio of oranges to lemons is eight to six (that is, 8:6, which is equivalent to the ...

Investigator web site
Accessed May 29, 2008. Pro rata has a

Latin Latin (, or , ) is a classical language belonging to the Italic branch of the Indo-European languages. Latin was originally a dialect spoken in the lower Tiber area (then known as Latium) around present-day Rome, but through the power ...

etymology Etymology () The New Oxford Dictionary of English (1998) – p. 633 "Etymology /ˌɛtɪˈmɒlədʒi/ the study of the class in words and the way their meanings have changed throughout time". is the study of the history of the form of words ...

, from '' pro'', according to, for, or by, and ''

rata Rata may refer to: Biology * Some plants of the genus ''Metrosideros'' from New Zealand, including: ** '' Metrosideros albiflora'' (Large white rātā) ** ''Metrosideros bartlettii'' (Bartlett's rātā or Cape Reinga white rātā) ** ''Metrosider ...

'', feminine

ablative In grammar, the ablative case (pronounced ; sometimes abbreviated ) is a grammatical case for nouns, pronouns, and adjectives in the grammars of various languages; it is sometimes used to express motion away from something, among other uses. ...

of calculated (rate or change).

Examples

Examples in law and

economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analy ...

include the following noted below. When liability for a toxic tort or a defective product concerns many manufacturers, the liability under

tort law A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishabl ...

is allocated pro rata.

Partnership liability

Each of several

partners Partner, Partners, The Partner, or, The Partners may refer to: Books * ''The Partner'' (Grisham novel), by John Grisham, 1997 * ''The Partner'' (Jenaro Prieto novel), 1928 * ''The Partners'' (book), a 1983 book by James B. Stewart * ''Partner'' (m ...

"is liable for er or hisown 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

debtor A debtor or debitor is a legal entity (legal person) that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterpart of th ...

files for bankruptcy, and "the debtor is insolvent,

creditor A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on 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 ...

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, overtime pay, and

vacation A vacation (American English) or holiday (British English) is either a leave of absence from a regular job or an instance of leisure travel away from home. People often take a vacation during specific holiday observances or for specific festi ...

time are typically calculated on a pro rata basis. Under US Federal

regulations Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. F ...

, a

government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government ...

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." The

American Federation of Teachers The American Federation of Teachers (AFT) is the second largest teacher's labor union in America (the largest being the National Education Association). The union was founded in Chicago. John Dewey and Margaret Haley were founders. About 60 p ...

(AFT), a US labor union, argues that ''all'' part-time or

adjunct Adjunct may refer to: * Adjunct (grammar), words used as modifiers * Adjunct professor, a rank of university professor * Adjuncts, sources of sugar used in brewing * Adjunct therapy used to complement another main therapeutic agent, either to impr ...

instructors should get pro-rata pay for teaching

college A college ( Latin: ''collegium'') is an educational institution or a constituent part of one. A college may be a degree-awarding tertiary educational institution, a part of a collegiate or federal university, an institution offering ...

courses. This is an important issue, as of 2010, for part-time

faculty Faculty may refer to: * Faculty (academic staff), the academic staff of a university (North American usage) * Faculty (division), a division within a university (usage outside of the United States) * Faculty (instrument) A faculty is a legal in ...

. Irish secondary school teachers are entitled to pro rata pay for part-time work. Under British

employment law Labour laws (also known as labor laws or employment laws) are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, ...

, "Regulations state that, where appropriate, the pro rata principle should be applied to any comparison ... to be given ... holiday." Likewise, in

Tasmania ) , nickname = , image_map = Tasmania in Australia.svg , map_caption = Location of Tasmania in AustraliaCoordinates: , subdivision_type = Country , subdi ...

, 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''.

Investment laws

In corporate practice, "a pro-rata dividend means that every shareholder gets an equal proportion for each share he or she owns."Investopedia web site
Accessed May 29, 2008. In

banking A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...

, "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)."

Venture capital

venture capital Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to start-up company, startups, early-stage, and emerging companies that have been deemed to have high growth poten ...

, 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."AVC.com web site
Accessed August 20, 2015.

Insurance

insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

, ''pro rata'' is used to determine

risk In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environme ...

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.

Insurance cancellation method

Calculation of return premium of a cancelled insurance policy is often done using a

cancellation method An insurance policy may be canceled before the end of the policy period. This has the effect of ending the policy coverage on the date of the policy cancellation. Cancellation methods Three different calculation methods are commonly used. Cancell ...

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

student A student is a person enrolled in a school or other educational institution. In the United Kingdom and most commonwealth countries, a "student" attends a secondary school or higher (e.g., college or university); those in primary or elementa ...

withdraws, colleges may refund tuition payments on a pro rata basis.

Aviation

In the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., federal district, five ma ...

, a private pilot may pay no less than the pro rata share of the total price of the flight when carrying passengers.14 CFR § 61.113 (c)
/ref>

References

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