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Proration

Choose how and when to charge customers when they upgrade or downgrade their subscription, or make other changes to items on it.

Screenshot of an invoice in Paddle

How it works

Proration is how Paddle calculates what a customer should be billed for based on changes made in the current billing cycle.

For example, if a customer adds a product midway through their billing cycle, you can charge them for just the time they used rather than the entire period. If they replace a product, you can calculate the difference and charge them accurately.

You're in control of proration. When changing items on a subscription, you can choose:

  • To prorate and bill now.
  • To prorate and bill on the next billing date.
  • Not to prorate, and to charge the full amount now.
  • Not to prorate, and to charge the full amount on the next billing date.
  • Not to bill at all.

Paddle's subscription billing engine calculates proration to the minute.

Proration options

You can tell Paddle how you'd like to prorate when editing a subscription in the Paddle dashboard.

When updating items on a subscription using the API, include the proration_billing_mode field to tell Paddle how to handle proration. The options are:

ValueDescription
prorated_immediatelyProrated amount is calculated now. The buyer is billed the prorated amount now.
full_immediatelyProrated amount is not calculated. The buyer is billed the full amount now.
prorated_next_billing_periodProrated amount is calculated now. The buyer is billed the prorated amount on their next renewal.
full_next_billing_periodProrated amount is not calculated. The buyer is billed for the full amount on their next renewal.
do_not_billProrated amount is not calculated. The buyer is not billed for the prorated amount or the full amount.

Check details.line_items.proration against a transaction to see the rate of proration that Paddle used to calculate a total.

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