Understanding proration: how plan changes affect your bill

When you upgrade or downgrade your subscription, you might notice a charge that looks different from your usual plan price. This adjustment is called proration, and it’s how we ensure you pay only for what you use.

1. What is proration?

Proration is the process of charging for a partial subscription period. When you switch from one plan to another before your current billing cycle ends, we don’t want you to lose the value of the time you haven't used on your old plan.

Here’s how it works:

• The unused time on your old plan is converted into a credit.
• This credit is immediately applied to the cost of your new plan.
• You are then charged for the remaining time in the billing period at the new plan's rate, with the credit applied.
• If the credit exceeds the cost of the new plan, the proration generates additional credit* that is applied to your next payments.

This means you get the full value of your original payment while seamlessly transitioning to a new subscription level.

2. How proration affects your renewal date

The effect of proration on your renewal date depends on the type of change you make.

• Scenario 1: keeping the same billing cycle (e.g., annual to annual)
  If you switch from one annual plan to another (or one monthly plan to another), your original renewal date does not change. You are simply charged a prorated amount to cover the upgrade for the remainder of your existing billing period.
• Scenario 2: changing the billing cycle (e.g., monthly to annual)
  If you switch from a monthly to an annual plan (or vice-versa), your renewal date will change. The billing cycle resets on the day you make the switch. Your new renewal date will be one year (or one month) from the date of this change.

3. Practical Examples

Let's walk through some real-world examples to see the math in action.

Example 1: upgrading from an annual plan to another annual plan

In this example, a user upgrades from one annual plan to a more expensive annual plan. Because the billing interval (annual) does not change, the renewal date will remain the same.

• Original subscription: Pro XL plan at €1,140/year, started on January 24, 2025.
• Original renewal date: January 24, 2026.
• New plan: Business XL plan at €2,388/year.
• Plan change date: July 4, 2025.

Our payment system calculates billing to the second. To be precise, let's say 161.176 days** have passed from the start of the subscription until the plan change.

Step 1: calculating the credit from the old plan
The user had the Pro XL plan for 365 days but only used 161.176 days. The remaining, unused portion is converted into a credit.

• Time remaining: 365 days - 161.176 days = 203.824 days.
• Credit value: (203.824 / 365) * €1,140 = €636.60

Step 2: calculating the prorated cost of the new plan
Since the renewal date is maintained, the user only pays for the Business XL plan for the same remaining period.

• Time remaining: 203.824 days.
• Prorated cost of the new plan: (203.824 / 365) * €2,388 = €1,333.51

Step 3: putting it all together

• Prorated cost of new Business XL plan: €1,333.51
• Unused time on Pro XL (Credit): -€636.60
• Total amount due immediately: €696.91

After this payment, the user is on the Business XL plan, and their subscription will renew for the full price (€2,388) on their original renewal date of January 24, 2026. The same logic applies if a user switches from one monthly subscription to another monthly subscription.

Example 2: switching from an annual plan to a monthly plan

Here, a user switches from a yearly subscription to a monthly one. Because the billing interval changes, the renewal date will reset.

• Original subscription: Pro XL plan at €1,140/year, started on January 24, 2025.
• New plan: Business monthly plan at €169/month.
• Plan Change Date: July 4, 2025.

Step 1: calculating the credit from the old plan
The credit from the unused portion of the annual plan is calculated exactly as before.

• Credit value: €636.60

Step 2: calculating the cost of the new plan
When changing billing cycles, you are starting a brand new subscription. Therefore, you are charged the full price of the new monthly plan. The cost is not prorated.

• Cost of New Business Monthly plan: €169.00

Step 3: putting it all together
We apply the large credit from the annual plan to the cost of the new monthly plan.

• Cost of new Business monthly plan: €169.00
• Credit from old Pro XL plan: -€636.60
• Total amount due immediately: €0

In this case, the credit is larger than the cost of the new plan. Here's what happens:

• The €169.00 cost is covered by the credit.
• The remaining credit of €467.60 (€636.60 - €169.00) is added to the user's account balance.
• This balance will be automatically used to pay for future monthly invoices until it runs out. This account credit is non-refundable.

The user is now on the Business monthly plan, and their new renewal date will be August 4, 2025 (one month from the date of the change).

If you have any further questions or concerns about this topic, please contact our technical support.

*This credit is non-refundable.

**It is equivalent to 161 days and a fraction of a day of 0.176, or 17.6% of a day, about 4 hours, 13 minutes, and 26 seconds.