Prorated rent is a part-period charge: a daily rate multiplied by the number of days a tenant holds the unit inside a rental period they do not hold in full. Both of those inputs are choices you make. Ontario's Residential Tenancies Act sets no formula for a part month, and the word partial does not appear in it. British Columbia's guidance requires a tenancy agreement to show the rent amount and the rent due date, and stops there.
So the first invoice is whatever your lease and your ledger say it is. That stays harmless until two units in the same portfolio produce different answers for the same nine days.
Three daily rates, and they disagree
Three divisors are in common use.
- Actual days. Monthly rent divided by the number of days in that calendar month.
- Banker's month. Monthly rent divided by 30, whatever month it is.
- Annual days. Monthly rent times 12, divided by 365.
Take a unit at $2,000 a month and a tenant moving in on February 20, 2027. That is 9 days, the 20th through the 28th.
- Actual days: $71.43 a day, so $642.86.
- Banker's month: $66.67 a day, so $600.00.
- Annual days: $65.75 a day, so $591.78.
Fifty-one dollars apart on one move-in, and each number is defensible on its own terms. Run the same unit in July with a move-in on the 20th, which is 12 days: actual days gives $774.19, the banker's month gives $800.00, annual days gives $789.04. The order flipped. No method is consistently the cheap one, so arguing about which is fairest goes nowhere.
Only one method makes a turnover month add up
Here is the test that settles it. One tenancy ends on February 14 and the next starts on February 15. The unit is occupied and paid for every day of the month. Does the month collect one full month of rent?
Under actual days it does, exactly: 14 days plus 14 days is 28, and 28 divided by 28 is one whole month. The banker's month collects $1,866.67 and leaves you $133.33 light on a unit that never sat empty for an hour. Annual days leaves you $158.90 light.
Push the same seam through a 31-day month and the banker's month runs the other way, collecting $2,066.67 against a $2,000 unit. That is not a windfall you get to keep quietly. Both of those tenants paid a daily rate above the daily equivalent of the lawful monthly rent, and section 111 of the Act bars a landlord from charging rent greater than the lawful rent.
Actual days is the only divisor where the pieces of a month add back to the month. Pick it. The honest drawback is that 9 days of February cost more per day than 9 days of July. That is the right answer, because rent is charged by the rental period, and February's rent buys February.
The day count is the second choice
Count the first day of occupancy and every calendar day through the last day of the rental period, inclusive. A February 20 start in a 28-day month is 9 days, not 8. The usual mistake is subtracting the date from 30, which returns 10 and overcharges by a day in every short month.
Check the seam at the other end. If one tenancy ends on the 14th and the next starts on the 15th, the 14th belongs to the outgoing tenant and to nobody else. Billing both sides for one calendar day is easy to do on a fast turnover and hard to spot later, because the rent roll looks healthy.
Two rules save arguments. Proration runs on calendar days, not business days. And the clock starts when the tenant gets possession, not when the unit was ready, so a key handed over on the 20th is charged from the 20th even if the paint dried on the 17th.
A prorated figure is not the rent
This is where a spreadsheet question becomes a legal one. Under section 113 of Ontario's Residential Tenancies Act, 2006, "the lawful rent for the first rental period for a new tenant under a new tenancy agreement is the rent first charged to the tenant."
If the only rent figure on your paperwork is $642.86, you have handed the tenant an argument about what the rent is. Put the total monthly rent in the lease as the rent. Show the part-period payment as its own line, naming the dates it covers and the date it is due.
The deposit follows the same logic. Section 106 caps a rent deposit at "the lesser of the amount of rent for one rent period and the amount of rent for one month", so a partial first month does not shrink the deposit to $642.86. The rent period is still a month, and that deposit has to be applied to the rent for the last rent period, which for a monthly tenancy is a full month. The provincial guide to the standard lease puts those rules in plain language, and it is worth a read before you write a partial figure into the deposit box.
Section 109 lets a tenant ask for a free receipt for any payment, up to 12 months after the tenancy ends. Make that receipt name the dates.
Where the method has to live
- The lease. One sentence naming the divisor and the day count, then the worked figure and the exact dates it covers.
- The ledger. Post a part-period charge as its own charge type carrying a date range, never as a short rent charge. A short rent charge is indistinguishable from a partial payment once a few months have passed, which is how a ledger balance stops being an arrears number.
- The move-out. The final statement needs the same divisor as the move-in, or the tenancy collects a different fraction of a month at each end.
The standard, in two sentences
Copy these into your lease template and your operations notes today:
The daily rate for any partial rental period is the monthly rent divided by the number of days in the calendar month in which that partial period falls. A partial period is charged for each calendar day from the first day of occupancy through the last day of that month, inclusive, and the same rule applies at the end of the tenancy.
That is the whole policy. It gives the same answer no matter who runs the calculation, and you can defend it line by line if anyone asks.