''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 variety (linguistics), varieties of the English language native to the United States. English is the Languages of the United States, most widely spoken lang ...

, this term has been

vernacular Vernacular is the ordinary, informal, spoken language, spoken form of language, particularly when perceptual dialectology, perceived as having lower social status or less Prestige (sociolinguistics), prestige than standard language, which is mor ...

ized as ''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 continuous progression of existence that occurs in an apparently irreversible process, irreversible succession from the past, through the present, and into the future. It is a component quantity of various measurements used to sequ ...

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 languages, Italic branch of the Indo-European languages. Latin was originally spoken by the Latins (Italic tribe), Latins in Latium (now known as Lazio), the lower Tiber area aroun ...

etymology Etymology ( ) is the study of the origin and evolution of words—including their constituent units of sound and meaning—across time. In the 21st century a subfield within linguistics, etymology has become a more rigorously scientific study. ...

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

feminine Femininity (also called womanliness) is a set of attributes, behaviors, and Gender roles, roles generally associated with women and girls. Femininity can be understood as Social construction of gender, socially constructed, and there is also s ...

ablative of calculated (rate or change).

Examples

When liability for a toxic tort or a defective product concerns many manufacturers, the liability under

tort law A tort is a civil wrong, other than breach of contract, 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 crime ...

is allocated pro rata. Examples in law and

economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

include the following, noted below:

Partnership liability

Each of several partners "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 files for

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...

, 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 propert ...

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 Annual leave time are typically calculated on a pro rata basis. Under US Federal regulations, a

government A government is the system or group of people governing an organized community, generally a State (polity), state. In the case of its broad associative definition, government normally consists of legislature, executive (government), execu ...

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 (AFT), a US

labor union A trade union (British English) or labor union (American English), often simply referred to as a union, is an organization of workers whose purpose is to maintain or improve the conditions of their employment, such as attaining better wages ...

, argues that ''all'' part-time or adjunct instructors should get pro-rata pay for teaching

college A college (Latin: ''collegium'') may be a tertiary educational institution (sometimes awarding degrees), part of a collegiate university, an institution offering vocational education, a further education institution, or a secondary sc ...

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

secondary school A secondary school, high school, or senior school, is an institution that provides secondary education. Some secondary schools provide both ''lower secondary education'' (ages 11 to 14) and ''upper secondary education'' (ages 14 to 18), i.e., b ...

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

employment law Labour laws (also spelled as labor laws), labour code 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 be ...

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

Tasmania Tasmania (; palawa kani: ''Lutruwita'') is an island States and territories of Australia, state of Australia. It is located to the south of the Mainland Australia, Australian mainland, and is separated from it by the Bass Strait. The sta ...

Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...

, 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

corporate A corporation or body corporate is an individual or a group of people, such as an association or company, that has been authorized by the state to act as a single entity (a legal entity recognized by private and public law as "born out of s ...

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 (VC) is a form of private equity financing provided by firms or funds to start-up company, startup, early-stage, and emerging companies, that have been deemed to have high growth potential or that have demonstrated high growth in ...

, 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 protect ...

, ''pro rata'' is used to determine risk based on the time the

insurance policy In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claim (legal), claims which the insurer is law, legally required to pay. In exchange for an initial ...

is in effect. It may also be used to describe ''proportional liability'' when more than one person is responsible for a loss or

accident An accident is an unintended, normally unwanted event that was not deliberately caused by humans. The term ''accident'' implies that the event may have been caused by Risk assessment, unrecognized or unaddressed risks. Many researchers, insurers ...

Insurance cancellation method

Calculation of return premium of a cancelled

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

student A student is a person enrolled in a school or other educational institution, or more generally, a person who takes a special interest in a subject. In the United Kingdom and most The Commonwealth, commonwealth countries, a "student" attends ...

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

Aviation

In the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

, 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>

Automobile

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.

References

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