Pro-rata is a term meaning a fraction of a whole based on a relationship to the whole.  Proportionate allocations are made pro-rata.Partnership distributions are made pro-rata based on the percentage ownership of each partner.  For instance, the ABC Partnership has three partners.  A has a 51% partnership interest, B’s is 33% and C’s is 16%.  If the partnership distributes $100,000 in cash it will be divided pro-rata so that A receives $51,000, B receives $33,000 and C receives $16,000.  There is also a time element to pro-rata.  Take the example of a $1000, 5% bond owned by Bob, which has a coupon payment once a year on December 31. The coupon interest payment is made to the person who holds the bond on December 31.  Bob sells the bond on June 30th to Heather.  Heather will have to pay Bob $1,000 plus Bob’s pro-rata share of the interest earned on the bond through June 30th.  This will be one-half of the yearly interest of $500, which is $250.  Pro-rata allocations are used in a number of other instances, such as tort liability, allocations of fault, bankruptcy creditor distributions, and employee benefit payments.  Finally, the Internal Revenue Code contains very specific rules that limit the use of non-pro-rata partnership distributions and allocations to prevent allocation of favorable pass-through tax deductions to some -- but not all -- partners.