What Is Prorated Rent? Complete Guide + Free Calculator (2026)

Quick answer: Prorated rent is a partial rent payment charged when a tenant moves in or out mid-month. Divide the monthly rent by days in the month, then multiply by days occupied. Example: $1,500 ÷ 30 days = $50/day × 15 days = $750 prorated rent.

Every landlord eventually faces the mid-month move-in. Get the math wrong and you're either leaving money on the table or setting yourself up for a tenant dispute from day one. This guide walks through all four calculation methods, when proration is legally required, and how to document it correctly.

Free Prorated Rent Calculator

Use Landlord Studio's free prorated rent calculator to get the exact partial rent amount based on your monthly rent, move-in date, and days in the month. Beyond proration, Landlord Studio automatically tracks rent payments and keeps your income records organized for tax time. Start a free trial here.

What Is Prorated Rent?

Prorated rent is the proportional amount charged to a tenant who occupies your rental property for only part of a month. Rather than charging a full month when a tenant moves in on the 15th or moves out on the 10th, you charge only for the days they actually occupied the unit.

Proration is generally considered a tenant right, and several states have specific rules governing which calculation method landlords must use. Overcharging or failing to prorate at all can create legal exposure and damage a landlord-tenant relationship before it starts.

Prorated rent typically applies when:

• Mid-month move-in: Tenant takes possession on any day other than the first.
• Mid-month move-out: Tenant vacates before the last day of the month.
• Lease expiration mid-month: The lease term ends on a non-last-day date.
• Rent adjustment mid-month: You increase or decrease rent on a date other than the first.
• Early lease termination: A tenant breaks the lease before the month ends.

How to Calculate Prorated Rent: 4 Methods

The amount you charge depends on the calculation method you use. Some states require a specific method, so check your local landlord-tenant law before deciding.

Method 1: Daily Rate (Most Accurate)

Formula: (Monthly Rent ÷ Days in the Month) × Days Occupied

The most common and defensible method. It accounts for the actual number of days in the specific month. Most courts and landlord-tenant statutes default to this when disputes arise.

Example: $1,800 ÷ 30 days (April) × 16 days = $960

Method 2: Banker's Month (30-Day Fixed)

Formula: (Monthly Rent ÷ 30) × Days Occupied

Uses a fixed 30-day denominator regardless of the actual month. Simpler to apply consistently, but slightly undercharges in 31-day months and overcharges tenants in February. Common in commercial leases.

Method 3: Average Month (30.42 Days)

Formula: (Monthly Rent ÷ 30.42) × Days Occupied

Uses the mathematical average of days in a year (365 ÷ 12 = 30.42). More precise than the 30-day method but still produces minor inaccuracies in February and 31-day months.

Method 4: Annual Daily Rate (365-Day)

Formula: [(Monthly Rent × 12) ÷ 365] × Days Occupied

Annualizes the rent first, then applies a daily rate based on a full year. Most common in commercial real estate and corporate housing. Accurate every month except leap years.

If your state doesn't specify a method, the daily rate (Method 1) is the most defensible and widely accepted choice.

Step-by-Step Prorated Rent Examples

Example 1: Tenant Moves In on the 15th

Tenant moves in on April 15th. The move-in day counts as occupancy, so the tenant occupies the unit for 16 days (April 15th through 30th).

• Monthly rent: $1,800
• Days in April: 30
• Days occupied: 16
• Prorated rent: ($1,800 ÷ 30) × 16 = $960

Example 2: Tenant Moves Out on the 10th

Tenant gives proper notice and moves out on June 10th.

• Monthly rent: $2,200
• Days in June: 30
• Days occupied: 10
• Prorated rent: ($2,200 ÷ 30) × 10 = $733

Example 3: Rent Increase Mid-Month

Rent increases from $1,500 to $1,650 on October 16th. October has 31 days. Using the annual daily rate method:

• Old rent (Oct 1-15, 15 days): [($1,500 x 12) / 365] x 15 = $740
• New rent (Oct 16-31, 16 days): [($1,650 x 12) / 365] x 16 = $868
• Total October rent: $1,608

When Prorated Rent Is Required - and When It Isn't

If a tenant doesn't occupy your unit for the full month, they should generally only pay for the days they do. You can typically collect full rent regardless of move-in date when:

• Your lease agreement explicitly states that rent is not prorated and the tenant signed with full knowledge of this.
• You're executing a legal eviction (though some states still require proration).
• A tenant abandons the property or breaks the lease without providing the required notice to vacate.

When in doubt, prorate. The cost of overcharging in disputes and legal fees far exceeds the extra days of rent you might collect.

How to Handle Prorated Rent as a Landlord

Put your proration policy in the lease. Specify which calculation method you use. A tenant who agreed to the method in writing cannot reasonably dispute the math later.

Show your work. When you send the first rent request, include a written breakdown: the daily rate, number of days, and total. This eliminates most disputes before they start.

Keep security deposits separate. A common mistake is applying part of the security deposit toward prorated rent. Keep them separate. Commingling creates accounting and legal complications.

Report it correctly at tax time. Prorated rent is rental income and must be reported on IRS Schedule E (Publication 527) for the tax year in which you receive it.

How Landlord Studio Handles Prorated Rent

Landlord Studio calculates prorated rent automatically when you set up a tenancy with a mid-month start date, records the payment against the correct period, and keeps everything ready for Schedule E reporting. You can also send tenants a clear rent statement showing the proration breakdown. Try Landlord Studio free - no credit card required.

Common Prorated Rent Mistakes to Avoid

• Not specifying the method in the lease. Without a stated method, a tenant can challenge your calculation using any formula they choose.
• Miscounting move-in days. The move-in day counts as a day of occupancy. A tenant who moves in on the 15th of a 30-day month occupies the unit for 16 days, not 15.
• Forgetting to prorate utilities. If utilities are included in rent, the utility portion should also be prorated for partial months.
• Using inconsistent methods. Switching methods between tenants risks fair housing complaints. Choose one and apply it consistently.
• Handling it verbally only. Always document the calculation in writing. A text or email works. A verbal agreement doesn't.

Prorated Rent FAQs

Do I have to prorate rent if a tenant moves in mid-month?

In most cases, yes. Tenants should only pay for the days they actually occupy the unit. Some states explicitly require proration; others leave it to the lease agreement. Charging full rent for a partial month of possession can be legally challenged.

Should I use 30 or 31 days for prorated rent?

If you're using the daily rate method, use the actual number of days in the move-in or move-out month. This produces the most accurate result. The banker's month method always uses 30 regardless of the actual month.

Can I prorate utilities as well as rent?

Yes, and you generally should if utilities are included in the rent. Charging a new tenant for utility usage from before their tenancy began is both unfair and legally questionable in many states. Specify how utility proration is calculated in your lease.

What if my lease says no prorated rent?

If your lease includes a no-proration clause and the tenant signed with full knowledge, you may be able to collect full rent in some states. However, you cannot collect full rent from both an outgoing and incoming tenant for the same period. Consult a local attorney before enforcing this clause.

How do I report prorated rent on my taxes?

Prorated rent is rental income and should be reported on IRS Schedule E for the year you receive it. Per IRS Publication 527, all amounts received for the use of your rental property - including partial-month payments - count as rental income. Consult a tax professional for advice specific to your situation.

What is the difference between prorated rent and a rent concession?

Prorated rent is proportional payment for days occupied. A rent concession is a discount you offer as an incentive - such as one free month to attract a tenant. Both affect your rental income reporting and should be documented properly.

Can I prorate the security deposit?

No. Security deposits exist to cover damages and unpaid rent, and the full deposit amount is typically required regardless of move-in date. Review your state's security deposit laws for rules on maximum amounts and handling requirements.

Getting Prorated Rent Right From Day One

Prorated rent is one of those landlord fundamentals where small errors create outsized consequences: a confused tenant, a dispute over a few hundred dollars, or a tax record that doesn't reconcile at year end. Choose a calculation method your state permits, put it in your lease, show the math when you send the first invoice, and track it cleanly from the start.

Landlord Studio handles the calculation automatically, records the payment correctly, and keeps everything organized for tax time. Start your free trial today.

This guide is for educational purposes only. For tax advice specific to your situation, consult a qualified tax professional. For state-specific landlord-tenant law guidance, consult a licensed attorney in your jurisdiction.