When a tenancy starts or ends partway through a month, rent is adjusted to reflect the exact days the tenant occupies the property. Instead of charging for the full month, we calculate a pro-rata amount, meaning the tenant only pays for the days they are responsible for the property.
This ensures the rent charged is fair, accurate, and aligned with the lease dates.
Calculation Methods
There are two methods available to calculate pro-rata rent. Both approaches calculate a daily rate and apply it to the number of days occupied, but they differ in how that daily rate is determined.
- Rent Schedule Rate method – based on the configured rent schedule (e.g. weekly, fortnightly, monthly)
- Yearly method – based on a standard 365-day year
Understanding the difference between these methods is important, as it can result in slight variations in the final pro-rata amount.
Rent Schedule Rate Method
The rent schedule rate method calculates the daily rent based on the rent amount and its billing frequency (segment). This means the calculation adapts depending on whether rent is charged daily, weekly, fortnightly or monthly.
This approach ensures the pro-rata calculation aligns directly with how rent is configured in the system, rather than assuming a fixed monthly structure.
The Formula
Pro-rata rent = (Rent amount ÷ billing frequency days) × Billable days
- Rent amount = the amount charged per rent cycle
- Billing frequency days = the number of days in that rent cycle (e.g. monthly rent)
- Billable days = the number of days the tenant occupies the property
Because the rent schedule can vary, the segment days will depend on the billing frequency.
Example Calculation
Scenario:
- Rent schedule: Monthly
- Rent amount: $2,100
- Tenancy start date: 21 April
- April has 30 days
Step 1: Determine segment days
For a monthly schedule in April, the segment is 30 days.
Step 2: Confirm billable days
The tenant occupies the property from 21 April to 30 April inclusive.
30 − 20 = 10 billable days
Step 3: Calculate the daily rent rate
$2,100 ÷ 30 = $70 per day
Step 4: Multiply by billable days
$70 × 10 = $700
✅ Pro-rata rent payable for 21–30 April: $700
Yearly Method
The yearly method calculates a daily rent amount based on a fixed 365-day year, regardless of the rent schedule or month. This creates a consistent daily rate across the entire year.
This approach is often used where a standardised daily rate is preferred, as it removes variation between months and billing cycles. Instead of relying on the rent schedule, the system derives a single daily rate from the annual rent and applies it uniformly.
The Formula
Pro-rata rent = (Annual rent ÷ 365) × Number of days occupied
By dividing the annual rent by 365 days, a consistent daily rate is established. This daily rate is then multiplied by the number of days the tenant occupies the property within any given period.
Example Calculation
Below is an example of how the yearly pro-rata rent is calculated.
Scenario:
- Annual rent: $25,200 (equivalent to $2,100 per month)
- Tenancy start date: 21 April
- Days occupied: 10 days
Step 1: Calculate the daily rent rate
$25,200 ÷ 365 = $69.04 per day (rounded)
Step 2: Multiply by the number of days occupied
$69.04 × 10 = $690.40
✅ Pro-rata rent payable for 21–30 April: $690.40
Key Difference Between Methods
- Rent Schedule Rate method: Daily rate is based on the configured rent cycle (e.g. weekly, monthly)
- Yearly method: Daily rate is standardised across a 365-day year
Because of this, the pro-rata amount may vary slightly depending on the method selected.
How to Change the Calculation Method
To update the pro-rata calculation method:
- Go to Admin
- Select Account Settings
- Navigate to Pro Rata Rent Calculation
- Choose either Rent Schedule Rate or Yearly