What proration is and why three methods exist
Rent is contracted by the month, but tenancies rarely start on the first. When a tenant takes possession on the 20th of a 31-day month, they owe for twelve days, not thirty-one. Proration converts the monthly figure into a daily one and multiplies by the days actually charged.
The complication is that a month is not a fixed length. February is 28 or 29 days, four months are 30, seven are 31. So there is no single obvious daily rate, and three conventions have grown up around the ambiguity.
The actual-days method divides the monthly rent by the length of that specific month. It is the most defensible and the most common: the tenant pays for exactly the share of that month they occupied. Its quirk is that the daily rate changes month to month — $1,500 rent is $48.39 a day in March and $53.57 a day in February.
The flat 30-day method, sometimes called the banker's month, always divides by 30 regardless of the calendar. It gives one stable daily rate all year, which is why property-management software and commercial leases often use it. On a 31-day month it slightly overcharges the tenant per day; on February it slightly undercharges.
The annualized method divides annual rent by 365, giving a daily rate that is constant and, over a full year, exactly correct. It is common in leases that anticipate multiple partial periods. Its quirk is leap years: 366 days at a rate built on 365 collects a fraction more than twelve months of rent unless the lease addresses it.
None of these is universally right. Whichever your lease names is the one that binds, and this calculator shows all three so you can see the size of the disagreement before you argue about it.
Counting the days correctly is the part people get wrong
The arithmetic is trivial; the day count is where disputes start. The convention that matches almost every residential lease is that the tenant pays for the day they take possession and does not pay for the day they hand back the keys — but the lease governs, and some leases charge both ends.
For a move-in, count the move-in day and every remaining day of the month: days = D − move-in date + 1. Take possession on the 20th of a 31-day month and you owe 31 − 20 + 1 = 12 days. Take possession on the 1st and you owe the whole month, so no proration is needed.
For a move-out, count from the 1st to the last day of occupancy: if the lease ends on the 9th and the tenant is responsible through the 9th, that is 9 days. If your lease treats the final day as unbilled, it is 8. Read the clause rather than assuming.
Two situations complicate this. A mid-month move-out followed by a mid-month move-in to the same unit means both tenants are prorated on the same month, and the two counts should not overlap or leave a gap — the outgoing tenant's last billed day and the incoming tenant's first billed day should be consecutive. And a lease that starts and ends mid-month in the same month, which is rare but happens with short-term corporate lets, is prorated once for the whole occupied span rather than twice.
Worked example: moving in on 20 March at $1,500 a month
A tenant signs a lease at $1,500 a month and takes possession on 20 March. March has 31 days, and the lease charges the tenant for the day of possession, so they owe for 20 through 31 inclusive.
- Days charged. 31 − 20 + 1 = 12 days.
- Actual-days rate. $1,500 ÷ 31 = $48.3871 a day.
- Prorated rent. $48.3871 × 12 = $580.65.
Now price the same twelve days under the other two conventions:
- Flat 30-day. $1,500 ÷ 30 = $50.00 a day; $50.00 × 12 = $600.00.
- Annualized. $1,500 × 12 = $18,000 a year; $18,000 ÷ 365 = $49.3151 a day; $49.3151 × 12 = $591.78.
The spread between the cheapest and dearest is $600.00 − $580.65 = $19.35 on a single month — about 1.3% of a month's rent. Small in isolation, and worth exactly one clause in the lease to avoid arguing about.
If the same tenant also pays a $1,500 deposit at signing, the move-in cheque under the actual-days method is $580.65 + $1,500 = $2,080.65. If the landlord also collects April's full rent up front, add $1,500 for a total of $3,580.65.
Which method to use, and how much it matters
Use whichever method the lease names. If the lease is silent, the actual-days method is the safest default because it is the one a court or a housing tribunal is most likely to regard as the plain meaning of a month's rent, and it never charges a tenant more than the month they actually got.
The size of the disagreement is bounded and small. The daily rate under the flat 30-day method is R ÷ 30; under actual days it is R ÷ D. On a 31-day month the flat rate is higher by a factor of 31/30, or 3.33%; on a 28-day February it is lower by 30/28, or 6.67%. The annualized rate, R × 12 ÷ 365, sits between the 30-day and 31-day rates all year, since 365 ÷ 12 = 30.4167 days. So on a 31-day month the ranking is always actual-days lowest, annualized in the middle, flat-30 highest — and on February the ranking reverses completely, with actual-days highest.
Two practical rules follow. First, a landlord who uses the flat 30-day method consistently collects slightly more in the seven long months and slightly less in February, and over a full year of proration events the effects roughly cancel. Second, a tenant disputing $19 is disputing the convention, not an error, and the fastest resolution is to read the clause.
Where the method genuinely matters is at high rents and in commercial leases with frequent partial periods. On a $12,000-a-month commercial suite, the same twelve-day March proration ranges from $4,645.16 to $4,800 — a $154.84 spread, which is worth specifying.
Daily rate per $1,000 of monthly rent
| Month length | Actual days (R ÷ D) | Flat 30-day (R ÷ 30) | Annualized (R × 12 ÷ 365) |
|---|---|---|---|
| 28 days (February) | $35.7143 | $33.3333 | $32.8767 |
| 29 days (leap February) | $34.4828 | $33.3333 | $32.8767 |
| 30 days (Apr, Jun, Sep, Nov) | $33.3333 | $33.3333 | $32.8767 |
| 31 days (Jan, Mar, May, Jul, Aug, Oct, Dec) | $32.2581 | $33.3333 | $32.8767 |
The flat 30-day and annualized columns do not vary with the month, which is the whole point of them. The actual-days column is the only one that changes, and it is highest in February and lowest in the 31-day months.
Some jurisdictions prescribe the method
Rent proration is governed by the lease in most places, but not everywhere. A number of state and municipal landlord-tenant statutes and rent-stabilisation codes specify how a partial month must be calculated, and some prohibit charging more than the pro-rata share of the actual month. Where a statute applies, it overrides a conflicting lease clause.
Check your local landlord-tenant act before adopting a flat 30-day divisor on 31-day months, and keep the calculation on the ledger so the tenant can see the divisor and the day count rather than just a total.
Mistakes that turn proration into a dispute
- Counting the move-in day wrong. Moving in on the 20th of a 31-day month is 12 days, not 11. The formula is D − date + 1 when the tenant pays for the day of possession.
- Charging both the move-out day and the next tenant's move-in day. If both fall on the same date, the landlord has collected that day twice.
- Switching methods between the move-in and the move-out. Use the same divisor at both ends of the tenancy, or the tenant pays for more than the days they had.
- Prorating the security deposit. A deposit is not rent and is not divided by days; it is collected in full at signing and returned under the deposit rules.
- Forgetting utilities, parking and pet rent. Recurring monthly charges beyond base rent are usually prorated on the same basis, and leaving them at the full amount overcharges a partial month.
- Rounding the daily rate before multiplying. Rounding $48.3871 to $48.39 and then multiplying by 12 gives $580.68 instead of $580.65. Round the total, not the rate.
- Applying the annualized method across a leap year without adjustment. 366 days at a 365-day rate collects 100.27% of a year's rent.
Key terms
- Proration
- Dividing a periodic charge in proportion to the part of the period actually used. Rent, HOA dues, parking and property tax are all commonly prorated.
- Banker's month
- A conventional 30-day month used as a divisor regardless of the calendar. Common in commercial leases, interest accrual and property-management software.
- Per diem
- The daily rate derived from a periodic charge. Lenders quote a per-diem for interest; landlords quote one for rent.
- Move-in total
- Everything due at the start of the tenancy: prorated rent, the security deposit, and any full month collected in advance. Only the first of these is a rent charge.
Where proration shows up beyond the first month
The same arithmetic runs through most of a property's paperwork. At a sale, property taxes are split between buyer and seller on the closing date using an identical daily-rate calculation — the property tax proration calculator handles that split, and it is one of the largest line items on a settlement statement. Mortgage payoffs carry a per-diem interest charge computed the same way, which the seller net sheet calculator includes when it estimates proceeds.
For the ongoing tenancy, the rent increase calculator handles what happens when the rent changes mid-lease, and if the increase takes effect part-way through a month you will prorate at the old rate for the first part and the new rate for the rest — two calculations on this page rather than one. The rent-to-income ratio calculator is what a landlord uses to qualify the tenant in the first place, and the vacancy loss calculator prices the gap days between one tenancy ending and the next beginning, which is exactly the period proration exposes.
This page is a calculation tool, not legal advice. Landlord-tenant law varies by state, province and city, and where a statute prescribes a proration method it overrides both the lease and any convention described here.