In brief
This calculator prorates a charge that covers a period — a year of property tax, a quarter of HOA dues — between the seller and the buyer at the closing date. For each charge you enter the amount, the period it covers, and how it’s counted, and the tool returns the seller’s days, the buyer’s days, the per-diem, and a plain-English direction: who credits whom, and how much. The one idea worth carrying: a charge billed in advance (prepaid) credits in the opposite direction from one billed in arrears (paid after the fact), and getting that backwards reverses the whole entry. It is an educational estimate. Counting conventions, the day-of-closing rule, and the billing basis all vary by contract and locality, and the closing office’s settlement statement is what controls, so verify every figure against your own documents.
Proration is the part of a closing that looks like simple division and hides a sign error. A charge covers a span of time, closing lands somewhere inside it, and the money has to be split so each party pays for the days they own. The arithmetic is a per-diem times a day count. The trap is direction: on some charges the seller pays the buyer, on others the buyer pays the seller, and the thing that flips it is whether the bill was paid before the period or comes after it.
Get the direction right and the rest is bookkeeping. Get it backwards and you have moved money the wrong way across the table. This tool does the day counts and the per-diem for each charge, states which convention it used, and tells you in words which party credits which. It is the companion to the seller net sheet, which folds these prorations into the seller’s walk-away number.
Use it the way a closing coordinator uses scratch paper: set the closing date, enter each charge with the period and basis your documents show, and then reconcile the output against the settlement statement line by line. That last step is not optional.
Interactive tool
Proration calculator
Your contract decides — check it.
These three settings apply to every item below. Actual-days mode divides by the real number of days in the period (366 across a leap year); 30/360 treats every month as 30 days and the year as 360. Which method a deal uses, and who owns the closing day, are set by the contract or local custom, not by any universal rule.
Charges to prorate
In advance means the period was prepaid; in arrears means the bill comes after the period. Which way a charge runs varies by locality and by the bill — the settlement statement controls.
In advance means the period was prepaid; in arrears means the bill comes after the period. Which way a charge runs varies by locality and by the bill — the settlement statement controls.
The split at closing
Enter a closing date and at least one amount, and every charge below fills in.
This is an educational estimate, not a settlement statement, Closing Disclosure, or payout record. Conventions vary by contract and locality; the closing office’s figures control. Verify every number against your own documents before you rely on it.
How the math works — and where it stops
A proration is only as trustworthy as its stated assumptions, so here are ours.
The per-diem is the amount divided by the days in the period. Under the actual-days method that denominator is the real day count — 365 in a common year, 366 across a leap year, and fewer for a partial or fiscal period. Under 30/360 the denominator is 360, because that method treats every month as 30 days and a full year as 360. Same charge, two slightly different daily rates.
The closing date splits the period. The seller owns the days from the start of the period through closing; the buyer owns the rest. Whether the closing day itself lands on the seller’s side or the buyer’s is a toggle, because contracts assign it differently, and the choice shifts the split by exactly one day.
The billing basis sets the direction. This is the concept the whole page turns on. On a charge billed in arrears, the seller has run up days the bill will eventually cover but nobody has paid yet, so the seller credits the buyer for the seller’s share. On a charge billed in advance, the seller already paid for the whole period, including the buyer’s part, so the buyer credits the seller. Flip the basis and the credit reverses.
Where it stops. The tool prorates the charges you type in, on the dates and conventions you set. It cannot see a mid-year reassessment, a supplemental tax bill, a special assessment, or a dues change the association hasn’t sent you. It rounds once at the end; a settlement statement may round at each line. And it takes no position on which charges get prorated at all, which is itself a contract-and-custom question. It computes a clean estimate from clean inputs, which is exactly as far as a worksheet should go.
Advance versus arrears, without a single dollar figure
The direction of a proration credit is set entirely by whether the charge was paid before the period or comes due after it. Here are both, described as mechanics rather than invented bills.
Advance and arrears aren’t a detail of the arithmetic. They are the arithmetic’s sign. Read the bill for which one you have before you trust the number.
Why the conventions vary, and why the settlement statement wins
The day-count method varies. Actual-days and 30/360 both circulate, and which one a deal uses comes down to the contract’s language and the closing office’s local custom. The 30/360 method is a holdover from hand calculation that keeps the arithmetic round; actual-days is more precise about leap years and partial periods. Neither is a national standard, so the tool ships with a toggle rather than a default opinion.
The day of closing varies. Whether the seller or the buyer owns the closing day is a contract term, and forms split on it. It is one day of the charge, which is minor on a small item and less minor on a large one, but it is a real difference and it is written down somewhere in your agreement.
The billing basis varies. Whether a given charge is paid in advance or in arrears depends on the jurisdiction and the charge. Property taxes are the classic source of confusion, running in advance in some places and in arrears in others, which is why a proration worksheet can’t assume the direction for you. The current bill tells you which one you are looking at.
And the settlement statement controls all of it. The closing office produces the figures that move, often on an ALTA settlement statement or the Closing Disclosure, and its prorations are the governing version. When its number and this estimate disagree, the estimate is what’s wrong, or is working from a different input. The one federal fixture near this part of the file is unrelated to the proration math itself: under the TRID rule the Closing Disclosure must reach the borrower at least three business days before consummation, which has its own guide.
Where does Ratifyly fit around a page like this? Not in the money math. Ratifyly does not compute prorations, commissions, or payouts; the settlement agent does, and their statement governs. What Ratifyly does is upstream of the arithmetic: it reads the forwarded paperwork a transaction generates, extracts the parties, the price, and the dates each clock runs on, and builds the transaction and its timeline from the documents rather than from someone’s re-typing. A proration hangs on a closing date and a period, and those dates move when an amendment lands. When one does, Ratifyly re-reads the paper and re-flows the schedule, one shared live timeline every party watches, with deadlines escalated before they hit and a human approving every call. The division above is still yours to run against the settlement statement; the point is that the closing date you run it from is read from the file, not remembered. The how-it-works page shows the path a forwarded email takes.
This calculator and article are educational and general in nature. They are not legal, tax, or accounting advice, and the figures produced are an estimate, not a settlement statement, a Closing Disclosure, or a payout record. Proration conventions (the day-count method, whether the closing day belongs to the buyer or the seller, whether a charge is billed in advance or in arrears, and which period a charge covers) vary by contract, by locality, and by the specific bill, and a charge can be reassessed or supplemented after the bill you enter here. The closing office’s settlement statement is the version that controls. Verify every figure against your own documents, and consult the closing office, your broker, or a licensed professional for any particular transaction.
Questions people ask
What does prorated mean at closing?
Prorating splits a charge that covers a period of time between the seller and the buyer according to how much of that period each one owns the property. Property taxes, HOA or condo dues, some utilities, and prepaid items all cover a stretch of the calendar rather than a single day, and closing usually lands in the middle of one. So the charge is divided at the closing date: the seller carries the days up to closing, the buyer carries the days after, and one of them credits the other at the table for the days that belong to the other side. The mechanics — which day-count convention, who owns the day of closing itself, and whether the credit flows from seller to buyer or the reverse — all depend on the contract and local custom, and the closing office's settlement statement is the version that governs the money.
Who decides who owns the day of closing?
The contract does, and forms differ. Some assign the day of closing to the seller, some to the buyer, and the difference is one day of the charge either way — small on most items, but real, and it changes the day counts the calculator shows. There is no single national rule to fall back on, so read the proration or possession language in your specific agreement rather than assuming the habit from your last deal. When the form is silent or ambiguous, the closing office generally applies local custom, and that is another reason the settlement statement is the figure to verify against.
What is the difference between billed in advance and in arrears?
It is the difference that decides who credits whom, so it is worth getting straight. A charge billed in advance is paid at the start of the period it covers: the owner has already put money down for time that hasn't happened yet. A charge billed in arrears is paid after the period: the owner uses the service or accrues the obligation first, and the bill arrives later. At a mid-period closing, the two run in opposite directions. On a prepaid (in-advance) charge, the seller paid for days the buyer will own, so the buyer reimburses the seller. On an in-arrears charge, the seller used days that nobody has paid for yet, so the seller credits the buyer, who will settle the whole bill later. Whether a given charge is billed in advance or in arrears varies by locality and by the charge itself — property taxes in particular run one way in some jurisdictions and the other way elsewhere — so read the current bill and confirm the direction on the settlement statement.
Actual days or 30/360 — which convention should I use?
Whichever your contract or closing office uses; both are common and neither is universal. The actual-days method divides the charge by the real number of days in the period — 365 in a common year, 366 across a leap year — and counts real calendar days on each side of closing. The 30/360 method treats every month as 30 days and the year as 360, which trades a little accuracy for round arithmetic that predates spreadsheets. On the same numbers the two methods produce slightly different per-diems and slightly different splits, rarely far apart but rarely identical. The calculator implements both so you can match whichever your deal runs on, but the settlement statement's method is the one that controls, so set the toggle to match it rather than to whichever you prefer.
Why does my settlement statement differ from this calculator?
Because the settlement statement is the real thing and this is a worksheet. Several honest reasons can move the numbers apart: the closing office may use a different day-count convention, may assign the day of closing to the other party, may prorate from a different period (a fiscal tax year rather than the calendar year), may use a tax or dues figure that was reassessed or changed since the bill you typed in, or may round differently at each line. The estimate here is only as good as the amounts, dates, and conventions you enter, and it can't see a reassessment or a supplemental bill the closing office has. Treat any difference as a prompt to check which input differs, and treat the settlement statement as the figure that governs.