How is prorated rent calculated in Canada?
Divide the monthly rent by the number of days to get a daily rate, then multiply by the days the tenant actually occupies the unit. There are three common methods: days-in-month (rent divided by the actual days in that month), banker's (rent divided by 30), and annual (rent times 12, divided by 365). The days-in-month method is generally considered fairest.
Which proration method should we use?
The days-in-month method is the most common and is usually seen as the fairest because it uses the real length of the specific month. The banker's (30-day) method is simpler and slightly favours the tenant in 31-day months. Whatever method you choose, agree it in writing before move-in to avoid disputes.
Is prorated rent required by law in Canada?
Provincial residential tenancy laws do not mandate a specific proration formula, but rent must be charged fairly for the period actually occupied. A landlord cannot charge a full month for a few days of occupancy. Put the agreed method and amount in the lease or a signed addendum.
Do I prorate the last month too?
Only if the tenancy ends mid-month with the landlord's agreement. In Ontario, tenancies usually end on the last day of a rental period, and a last-month-rent deposit is applied to the final full month. If an early move-out mid-month is agreed, prorate the final period the same way as the first.