Proration

Proration is the adjustment a billing system makes when a subscription changes partway through a billing cycle. Instead of charging a full period at the new price, it charges (or credits) only the fraction of the period that's actually affected, so the customer pays for what they used.

How proration works

When a customer upgrades, downgrades, or changes quantity mid-cycle, Stripe splits the period at the change date and writes two invoice items:

1. A credit for the unused time remaining on the old price.
2. A charge for the same remaining time at the new price.

The net difference is what the customer owes (or gets back). By default these amounts wait on the next invoice, but you can invoice them immediately.

Example

A customer on a $20/month plan upgrades to $50/month exactly halfway through the cycle. Stripe credits the unused half of the old plan ($10) and charges the unused half of the new plan ($25), for a net proration of `$15` on the next invoice. The following cycle simply bills the full $50.

Why it matters

Proration keeps upgrades fair and frictionless — a customer can move up a tier the moment they need to without waiting for their renewal, and you capture the expansion revenue right away. It also prevents double-charging on downgrades. Because prorations land as separate line items, an invoice total can differ from the plain plan price, which is worth explaining to customers who ask why a bill looks unusual.