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''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
North American English North American English (NAmE, NAE) is the most generalized variety Variety may refer to: Science and technology Mathematics * Algebraic variety, the set of solutions of a system of polynomial equations * Variety (universal algebra), classes ...
this term has been
vernacular A vernacular or vernacular language 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, normally Spoken language, spoken informally rath ...
ized to ''prorated'' or ''pro-rated''.


Meanings

More specifically, ''pro rata'' means: * In proportionality to some factor that can be exactly
calculate
calculate
d * To count based on an amount of
time Time is the continued sequence of existence and event (philosophy), events that occurs in an apparently irreversible process, irreversible succession from the past, through the present, into the future. It is a component quantity of various me ...

time
that has passed out of the total time * Proportional
ratio In mathematics, a ratio indicates 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 ...

ratio
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 in the area around Rome, known as Latium. Through the power of the Roman Republic, it became ...

Latin
etymology Etymology ()The New Oxford Dictionary of English ''The'' () is a grammatical article Article often refers to: * Article (grammar) An article is any member of a class of dedicated words that are used with noun phrases to mark the identi ...
, from ''
pro
pro
'', according to, for, or by, and ''
rata
rata
'',
feminine Femininity (also called womanliness or girlishness) is a set of attributes, behaviors, and roles generally associated with women A woman is an adult female Female (symbol: ♀) is the sex of an organism that produces the large non-mob ...
ablative In grammar In linguistics Linguistics is the scientific study of language, meaning that it is a comprehensive, systematic, objective, and precise study of language. Linguistics encompasses the analysis of every aspect of language, ...

ablative
of calculated (rate or change).


Examples

Examples in
law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its bounda ...
and
economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interact ...

economics
include the following noted below. When liability for a
toxic tort A toxic tort A tort, in common law jurisdiction, 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. It can include inte ...
or a defective product concerns many manufacturers, the
liability Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liability, the area of law in which manufacturers, distributors, suppliers, retai ...
under
tort law A tort, in common law In law, common law (also known as judicial precedent or judge-made law, or case law Case law is the collection of past legal decisions written by courts and similar tribunal A tribunal, generally, is any person ...
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), ''The Partner'' (Grisham novel), by John Grisham, 1997 *The Partner (Jenaro Prieto novel), ''The Partner'' (Jenaro Prieto novel), 1928 *The Partners ...

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 A debtor or debitor is a legal entity (legal person) that owes a debt Debt is an obligation that requires one party, the debtor A debtor or debitor is a legal entity (legal person) that owes a debt Debt is an obligation that ...
files for
bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditor A creditor or lender is a party 300px, '' Hip, Hip, Hurrah!'' (1888) by Peder Severin Krøyer, a painting portraying an artists' par ...

bankruptcy
, and "the debtor is insolvent,
creditor A creditor or lender is a party 300px, '' Hip, Hip, Hurrah!'' (1888) by Peder Severin Krøyer, a painting portraying an artists' party in 19th century Denmark A party is a gathering of people who have been invited by a host A host is ...

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."


Worker's pay and benefits

A worker's part-time work,
overtime Overtime is the amount of time someone works beyond normal working hours Working time is the period of time Time is the indefinite continued sequence, progress of existence and event (philosophy), events that occur in an apparently irre ...
pay, and
vacation A vacation (American English American English (AmE, AE, AmEng, USEng, en-US), 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. C ...
time are typically calculated on a pro rata basis. Under US Federal
regulations Regulation is the management of complex systems A complex system is a system composed of many components which may interaction, interact with each other. Examples of complex systems are Earth's global climate, organisms, the human brain, infra ...
, a
government A government is the system or group of people governing an organized community, generally a state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Departmen ...

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 trade union, labor union in America (the largest being the National Education Association). The union was founded in Chicago, Illinois, Chicago with Margaret Haley credited ...
(AFT), a
US
US
labor union A trade union (or a labor union in American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of variety (linguistics), varieties of the English language native ...
, argues that ''all'' part-time or adjunct instructors should get pro-rata pay for teaching
college A college (Latin Latin (, or , ) is a classical language A classical language is a language A language is a structured system of communication Communication (from Latin ''communicare'', meaning "to share" or "to be in rel ...

college
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), an instrument or warrant ...

faculty
.
Irish Irish most commonly refers to: * Someone or something of, from, or related to: ** Ireland, an island situated off the north-western coast of continental Europe ** Northern Ireland, a constituent unit of the United Kingdom of Great Britain and North ...

Irish
secondary school A secondary school describes an institution that provides secondary education and also usually includes the building where this takes place. Some secondary schools provide both lower secondary education (ages 11 to 14) and upper secondary educat ...
teachers are entitled to pro rata pay for part-time work. Under
British British may refer to: Peoples, culture, and language * British people The British people, or Britons, are the citizens of the United Kingdom of Great Britain and Northern Ireland The United Kingdom of Great Britain and Northern Ir ...

British
employment law Labour laws (also known as labor laws or employment laws) are those that mediate the relationship between workers, employing entities, trade union A trade union (or a labor union in American English), often simply referred to as a union, is ...
, "Regulations state that, where appropriate, the pro rata principle should be applied to any comparison ... to be given ... holiday." Likewise, in
Tasmania Tasmania (), abbreviated as TAS, is an island An island (or isle) is an isolated piece of habitat that is surrounded by a dramatically different habitat, such as water. Very small islands such as emergent land features on atol ...
,
Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...

Australia
, the law clearly grants workers the privilege of part-time benefits for
leave of absenceThe labour law Labour law (also known as labor law or employment law) mediates the relationship between workers, employing entities, trade unions and the government. Collective labour law relates to the tripartite relationship between employee ...
. This is granted under the ''Long Service Leave Act 1976''.


Investment laws

In
corporate A corporation is an organization—usually a group of people or a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal ...

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 Financial institutions, otherwise known as banking institutions, are corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), stat ...

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)."


Venture capital

In
venture capital Venture capital (VC) is a form of private equity Private equity (PE) typically refers to investment funds, generally organized as limited partnerships, that buy and restructure companies that are not publicly traded. Private equity is a ty ...
, 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

In
insurance Insurance is a means of protection from financial loss. It is a form of risk management Risk management is the identification, evaluation, and prioritization of risk In simple terms, risk is the possibility of something bad happening. ...

insurance
, ''pro rata'' is used to determine
risk In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty Uncertainty refers to Epistemology, epistemic situations involving imperfect or unknown information. It applies to predictions of future events, to ...

risk
based on the time the
insurance policy In insurance Insurance is a means of protection from financial loss. It is a form of risk management Risk management is the identification, evaluation, and prioritization of risk In simple terms, risk is the possibility of something ...
is in effect. It may also be used to describe ''proportional liability'' when more than one person is responsible for a
loss Loss may refer to: People with the surname *Joe Loss (1909–1990), founder of The Joe Loss Orchestra Arts, entertainment, and media Music *Loss (Bass Communion album), ''Loss'' (Bass Communion album) (2006) *Loss (Mull Historical Society album ...
or
accident An accident is an unplanned event that sometimes has inconvenient or undesirable consequences, other times being inconsequential. The occurrence of such an event may or may not have unrecognized or unaddressed risks contributing to its cause. M ...

accident
.


Insurance cancellation method

Calculation of
return premium An insurance policy In insurance, the insurance policy is a contract A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enfo ...
of a cancelled
insurance policy In insurance Insurance is a means of protection from financial loss. It is a form of risk management Risk management is the identification, evaluation, and prioritization of risk In simple terms, risk is the possibility of something ...
is often done using a cancellation method called ''
pro rata ''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 English_compound#Hyphenated_compound_ ...
''. First a
return premium An insurance policy In insurance, the insurance policy is a contract A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enfo ...
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 An insurance policy In insurance, the insurance policy is a contract A contract is a legally binding document between at least two parties that defines and governs the rights and duties of the parties to an agreement. A contract is legally enfo ...
. Traditionally this has been done manually using a paper wheel calculator. Today it is normally done using an
online wheel calculator In computer technology and telecommunications, online indicates a state of connectivity, and offline indicates a disconnected state. In modern terminology this usually refers to an Internet connection, but (especially when expressed "on line" or ...
.


College tuition

When a
college A college (Latin Latin (, or , ) is a classical language A classical language is a language A language is a structured system of communication Communication (from Latin ''communicare'', meaning "to share" or "to be in rel ...

college
student A student is primarily a person enrolled in a school A school is an educational institution designed to provide learning spaces and learning environments for the teaching of students under the direction of teachers. Most countries h ...

student
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 Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

United States
, 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>


See also

*
Employee Retirement Income Security Act The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a federal Federal or foederal (archaic) may refer to: Politics General *Federal monarchy, a federation of monarchies *Federation, or ''Federal state'' (fed ...
*
Legal liability In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by i ...
* Pro rata cancellation * Pro rata condition of averages *
Vesting In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by it ...


References

{{DEFAULTSORT:Pro Rata Latin legal terminology