Stripe Billing: How Proration Actually Works
Proration is where most custom billing bugs live. Here's the mental model that actually holds up.
Zeeshan
Founder · Published
Proration is where most custom billing bugs live. Here's the mental model that actually holds up.
Zeeshan
Founder · Published
Proration confuses more billing implementations than any other single concept: mostly because teams reason about it in terms of "days used" rather than what Stripe actually does.
When a subscription changes mid-cycle, Stripe credits the unused time on the old price and charges for the remaining time on the new price. Both calculated to the second, added as line items on the next invoice by default.
Teams often try to calculate proration manually and pass a fixed amount, fighting against Stripe's built-in logic instead of configuring `proration_behavior` correctly for their use case.
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