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When I started at a firm (a number of years ago) I was going over the pay structure with my new manager. When it came time to go over the annual bonus, he said that for the first year, my bonus would be prorated for the time that I worked.

I countered that it wouldn't be. To be clear, we both agreed I'd get the same amount of money. If I started halfway through the year, I'd get a bonus equal to half of what I would have for the whole year.

I merely disagreed about the use of the term prorated. I argued that my bonus wasn't prorated, merely that I only earned half as much. I still would receive a full bonus since, by definition, the bonus is simply your amount earned times a multiplier.

So to be clear, we can all agree that if a bonus was a flat amount that certainly it would. But when referring to bonuses that are a percentage of gross wages (including all the little things like on-call pay, overtime/emergency pay, etc...) is it still appropriate to call that prorated? If not, is there another word to describe that?

  • It would depend if your bonus was calculated on your base pay rate or what you actually earned. I'm not sure this is a language problem so much as a communication issue. – ColleenV Jan 31 '15 at 0:11
  • @ColleenV There's no communication concerns - my manager and I agreed on the number amount, only disagreed on the definition of prorated. I have updated my question to clarify precisely what I'm asking. – corsiKa Feb 2 '15 at 15:11
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    I think your edit to the last paragraph clarifies the question a lot: if your base salary is prorated, should we say that a bonus that is a fixed fraction of your salary (say, 5%) is also prorated? Or should we say that it is the standard bonus applied to a prorated salary (since the bonus-factor of 5% is not affected)? – apsillers Feb 2 '15 at 15:36
  • You make a good point, but this is the standard way that companies use the word prorate. It really comes down to how they think about calculating the final amount. They are calculating the bonus based on what you should make for an entire year, then dividing it by half. You are calculating based on hours actually worked. Either calculation method is valid. In my case, I work an 80% position. My company tells me that my vacation time is prorated to 80% of what a fulltime person would receive. Yet, when I look at my paystub, they calculate my vacation based on hours worked. I agree, it's odd. – michelle Feb 2 '15 at 15:56
  • Actually, we (my manager and I) are both using the "calculate based on what is actually earned" calculation, and we've confirmed this over multiple bonuses so far (huzzah!). In reality the two numbers are off by very little (because minor deviations are small compared to base pay) but we do both use the same calculation. – corsiKa Feb 2 '15 at 15:59
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The most common use of "prorate" is "pay a fraction of the agreed amount, to match the fraction of the service that was delivered".

I used to see it all the time when I did tech support for a phone company. If someone's phone service was unavailable for 5 days out of the 30-day month, then we would only charge the customer 5/6 of their usual monthly bill that month. (The service was available for 5/6 of the month, so we only charge you 5/6 of your bill.)

We routinely described that as "prorating" the customer's bill.

If it would be normal to give you a $1,000 bonus for a year's work, but you only worked there for 9 months (3/4 of a year), prorating your bonus would mean paying you $750 (3/4 of a year's bonus).

  • Except that the bonus amount isn't a flat amount: it is a percentage of your gross pay (including on-call, overtime, etc.) Would you still say that's a prorated bonus? – corsiKa Jan 30 '15 at 22:14
  • @corsiKa Does your comment provide more information about the bonus you ask about in your question? If so, you should edit your question to indicate this. Your question sounds like it is talking about a flat bonus. – user6951 Jan 30 '15 at 22:53
  • Everything in my comment is also in my question. It says "I still would receive a full bonus since, by definition, the bonus is simply your amount earned times a multiplier." It clearly isn't talking about a flat bonus. – corsiKa Jan 30 '15 at 23:28
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    Your question is not phrased as clearly as you might think. – user6951 Jan 31 '15 at 0:23
  • Hmmm. Your point about it being a percentage of your pay is a good one. The only other angle I can think of is that salary (as opposed to wages) is often stated in terms of an annual pay - i.e. we pay you $32,000 a year (rather than $15 an hour). They might, by default, talk about your bonus as a percentage of that $32,000 figure - and so reducing it to match the money you actually earned might still be considered prorating. But it's a stretch. – Stephen Dunscombe Jan 31 '15 at 22:36
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Yes, it is the "proper" use of prorate. The annual bonus ( = the amount that the bonus is for that work year) equals a sum; you are not receiving that sum but half of it. That is how the word prorate is used all the time. To me, this is not much more than a dictionary definition question.

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It might be instructive to realize that the word "prorate" is an english variant of "pro rata" which invokes the words "proportional" and "ratio, or rate."

A rate is a ratio...an amount over a quantifying measure. The quantity might be a period of time ($70/hour, $1000/month), it might be a volume ($50/bushel, $4 / gallon).

"Prorating" a value means to modify either the amount or the quantifier. For example, "we will prorate your yearly bonus, which is a percentage of your yearly salary, for the fractional year." So by common usage and by definition, your YEARLY bonus was prorated. If the bonus was defined as "$5 per day worked, paid yearly on the last payperiod before Christmas" then it would not be prorated for you.

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    Prorate is derived from Latin pro rata, and while pro and rata are related to proporational and ratio, the word isn't actually a blend, nor is it derived from proportional or ratio, so the etymological claim in this answer isn't exactly correct. – snailboat Mar 22 '18 at 1:59

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