Pro rata is a Latin term used to describe a proportionate allocation. It essentially translates to proportion, which means a process where whatever is being allocated will be distributed in equal portions.
If something is given out to people on a pro-rata basis, it means assigning an amount to one person according to their share of the whole.
While a pro-rata calculation can be used to determine the appropriate portions of any given whole, it is often used in business finance.
Pro rata is also used to determine how much of a distribution from a qualified retirement account is taxable when the account contains before and after-tax dollars


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