Pro rata

economic-dictionary

A pro rata is the quota or proportional part to which a member of a community has a right or obligation based on their participation in it.

In general terms, a pro rata corresponds to the aliquot part to which the member of a group or society is entitled. This, if the distribution of assets occurs, or in case the entity registers a credit balance.

Pro-rata comes from the Latin “pro rata parte” which literally means “according to the calculated part”, that is, it refers to the proportion in which each person or organization is entitled based on their contribution, or it can be divided into equal parts if each subject has contributed the same amount.

Pro-rata is synonymous with aliquot, that is, of proportionality in terms of the holding of an asset, or in relation to an obligation in the case of being a liability. Thus, each part of the capital of a company would be the pro rata of the distribution of the profits, assets or debts of said company.

A specific case: The salary pro rata

There is a good example in the socio-labor sphere where the pro rata is evident, such as extraordinary payments or the non-existence and apportionment of these.

In this case, this system can be maintained in which the annual gross salary is divided into certain payments, or they can be prorated, that is, distribute the total sum of the extra payments in the rest of the year, in such a way that only 12 monthly payments are received, derived from having the normal monthly payment and the proportional part for that month of the amount of the extra payments.

Tags:  Spain Colombia Argentina 

Interesting Articles

add