Define: Pro Rata

UK Accounting Glossary

Definition: Pro Rata


Full Definition of Pro Rata

Pro-rata means in proportion to. Thus pro-rata is used when costs, proceeds, profits, etc. are divided among participants according to ownership or some other factor. For example, suppose daily usage charges for periods of less than one day are applied pro-rata based on hours. If the daily charge is $24, the pro-rata cost for three hours is $3. Or suppose a company makes a pro-rata cash distribution of $10 per share. If a shareholder has 200,000 shares, he or she receives $2,000,000. Pro-rata is used in many financial and legal contexts: insurance policies may have pro-rata clauses based on the assessed value of one property to the assessed value of all properties; legal settlements may be distributed pro-rata based on the proportion of an individual claim to all claims, and a retiree may receive pro-rata payments based on each year of service worked.


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Modern Language Association (MLA):
Pro Rata. Payroll & Accounting Heaven Ltd. March 28, 2020
Chicago Manual of Style (CMS):
Pro Rata. Payroll & Accounting Heaven Ltd. (accessed: March 28, 2020).
American Psychological Association (APA):
Pro Rata. Retrieved March 28, 2020, from website:

Definition Sources

Definitions for Pro Rata are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 6th February 2020.