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What is Proration?

Proration is the adjustment of charges based on the unused portion of the current billing period when a subscription is upgraded or downgraded.

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Types of Proration

For both prorate and invoice proration types, the subscription plan changes immediately upon successful payment, whether the change is an upgrade or a downgrade. The only difference between the two proration types is when the price difference is charged or credited.
The subscription update is only applied if the payment succeeds. If the payment fails, an error is returned and the subscription remains unchanged.

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Invoice Immediately (invoice)

The prorated price difference is charged or credited immediately when the subscription is upgraded or downgraded.

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Next Invoice (prorate)

The prorated price difference is charged or credited on the next invoice on upgrading or downgrading a subscription.

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Apply on Next Period (next_period)

The subscription change is not applied immediately. Instead, it is scheduled as a pending update and applied at the beginning of the next billing period. No proration charges or credits are issued — the new plan simply takes effect on renewal. When a next_period update is pending, the subscription object includes a pending_update field with details about the scheduled change. If pending_update is null, there is no scheduled change.
A new update always overrides any previous pending update that has not yet been applied. For example, if a next_period update was previously scheduled and a new update is then made with invoice or prorate proration, the pending update is discarded and the new update is applied immediately instead.

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How to change the default proration setting using dashboard

1

Go to Organization Settings

In the Aureon dashboard sidebar, click on Settings. You can also go directly to: https://payaureon.com/dashboard/${org_slug}/settings Scroll down to Subscriptions section.
2

Choose the Proration type

Choose the default proration behavior: Invoice Immediately, Next invoice, or Apply on Next Period.The default proration setting is changed successfully.

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How to change the default proration setting using the OAT API

You can change the default proration behavior using the Update Organization API.

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How to prorate when updating subscription via API

1

Create an organization Token

Create a new organization token by following our Organization Access Tokens guide.
2

Save your Access Token

After creating your access token, you will be able to view it. Please copy and save your access token.
3

Copy the Subscription ID

  • In the Aureon dashboard sidebar, navigate to Sales > Subscriptions for your organization. You can also go directly to:
    https://payaureon.com/dashboard/${org_slug}/sales/subscriptions
  • Click on the Subscription you want to upgrade/downgrade and copy its Subscription ID.
4

Copy the Product ID

  • In the Aureon dashboard sidebar, navigate to Products > Catalogue for your organization. You can also go directly to: https://payaureon.com/dashboard/${org_slug}/products
  • Retrieve the Product ID for the item you wish to upgrade the subscription to by clicking on the ⋮ (More options) menu next to chosen products and selecting Copy Product ID.
5

Call the Update Subscription API

Call the Update Subscription API as follows.Make sure to replace:
  • subscription_id with the ID of the subscription you want to update
  • product_id with the new product ID
  • type_of_proration with the desired proration type:
    • invoice: to charge/credit the prorated price difference immediately
    • prorate: to charge/credit the prorated price difference on next invoice
    • next_period: to schedule the change for the beginning of the next billing period (no proration)
curl --request PATCH \
  --url https://api.polar.sh/v1/subscriptions/{<subscription_id>} \
  --header 'Authorization: Bearer <YOUR_BEARER_TOKEN_HERE>' \
  --header 'Content-Type: application/json' \
  --data '{
    "product_id": "<product_id>",
    "proration_behavior": "type_of_proration"
  }'

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Some examples for proration amount calculation

You can create a subscription with two plan options, one for $5 and other for $20 by following Create Product Variants.

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Case 1: Upgrading the subscription

You can upgrade a subscription by following the steps outlined in Subscription Upgrades, which explains the process from both the merchant’s and the customer’s perspectives. Example 1: Proration type = invoice Assuming that the month when the subscription was purchased has 30 days. In case of 31 days, instead of 30th + 1 day, it would be 31st + 1 day = 32nd day. Example 2: Proration type = prorate Assuming that the month when the subscription was purchased has 30 days. In case of 31 days, instead of 30th + 1 day, it would be 31st + 1 day = 32nd day.
If the billing interval changes, i.e. daily to monthly or monthly to yearly or vice versa, the proration is always applied as invoice (even if set to prorate).

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Case 2: Downgrading the subscription

You can downgrade a subscription by following the steps outlined in Subscription Downgrades, which explains the process from both the merchant’s and the customer’s perspectives. Example 1: Proration type = invoice Assuming that the month when the subscription was purchased has 30 days. In case of 31 days, instead of 30th + 1 day, it would be 31st + 1 day = 32nd day. Example 2: Proration type = prorate Assuming that the month when the subscription was purchased has 30 days. In case of 31 days, instead of 30th + 1 day, it would be 31st + 1 day = 32nd day.
If the billing interval changes, i.e. daily to monthly or monthly to yearly or vice versa, the proration is always applied as invoice (even if set to prorate).