What Is Pro Rata?

A proportional allotment is referred to as pro-rata in Latin. It basically means “in proportion,” which refers to a procedure in which whatever is being delivered is dispersed in equal quantities.
When something is distributed on a pro-rata basis, it indicates that an amount is distributed to each person in proportion to their part of the total. A pro-rata calculation can be used to calculate the proper sections of any given whole, although it’s most commonly employed in corporate finance.

Pro rata is the latin for ‘proportionally’ or a ‘proportion of’. It means that the salary quoted is what a full timer would receive for the same job. Your salary will be calculated according to what proportion of a full-time job your hours make up.

Dividend payments are a classic example of pro rata since dividends are paid per share. Shareholders receive dividends in direct proportion to the number of shares they own. So, more the shares, more the dividend.