Proration is the calculation of a charge or credit in proportion to the share of a period that a service was actually used. In subscription billing it applies when something changes partway through a billing cycle: a customer upgrades, downgrades, adds users, starts mid-month or cancels. The customer is credited for the unused time on the old plan and charged for the remaining time on the new one.
For example, a customer on a 30 dollar monthly plan who moves to a 60 dollar plan halfway through the month receives a 15 dollar credit and a 30 dollar charge, a net 15 dollars, shown as separate lines on the next invoice or charged at once. Billing systems calculate by the day or the second. Merchants choose whether to prorate at all, whether to refund credits on cancellation, and whether to reset the renewal date. Proration applies to fixed recurring billing; charges under usage-based billing already reflect actual consumption.