Prorated billing refers to the way we, using Stripe's billing system, calculate charges for any changes you make to your subscription within the billing cycle. It ensures that you only pay for the time you actually use a service after making a change like adding a new seat or upgrading your plan. Stripe's prorations are specifically designed to make billing adjustments transparent and fair, calculating only for the portion of the service used.
When you add a new seat to your subscription mid-cycle, Stripe calculates the cost for the remaining days in your current billing cycle. For example, if you add a seat halfway through the month, you will be charged only for the half-month usage of that new seat.
If you add new features or seats to your subscription, the prorated charges will be calculated based on the number of days left in your current billing cycle. These charges will appear on your next invoice, not immediately upon making the change.
If you remove a seat or downgrade your subscription, the change will take effect immediately, but the adjustment in your billing will reflect in the next cycle. You will receive a prorated credit for any unused time that you have already paid for.
You can view all prorated charges in your subscription management dashboard under the billing section. Each invoice will detail how the charges were calculated, showing both the new changes and how they were prorated.
To avoid prorated charges, consider making changes to your subscription close to the end of your billing cycle. This timing ensures that the new billing cycle starts soon after the changes are applied, minimizing the complexity of prorated charges.
Your invoice might show two billing periods if there have been changes to your subscription. This could include a prorated period for the current month (if you added features or seats) and the full upcoming billing cycle. It ensures transparency in how we apply changes and calculate charges.