How does prorated billing work when I upgrade or downgrade my plan?

This Shopify Help Center article describes the mechanics of prorating upgrades or downgrades:

"If you upgrade or downgrade your subscription with an app, then the app will prompt you to agree to a new recurring app charge. This is because Shopify allows each app only one recurring app charge to be enabled at a time. The existing recurring application charge will be canceled and replaced by the new charge.

Depending on the app, the new recurring app charge is either applied immediately, or after the app's current billing cycle ends. 

If the new app charge is applied immediately, then when you upgrade your plan by moving from a less expensive charge to a more expensive charge, the charge is prorated based on the difference in price and the number of days remaining in the billing cycle. For example, if you begin a 30-day billing cycle on a $5.00 plan, and upgrade to a $15.00 plan on day 15 of the billing cycle, then you're charged $5.00 + ($15.00 - $5.00) * (15/30) = $10.00 USD.

If the new app charge is applied immediately, then when you downgrade your plan by moving from a more expensive charge to a less expensive charge, you're automatically offered an application credit based on the difference in price and the number of days remaining in the billing cycle. This application credit can be used towards any future application purchase on Shopify."

How does this appear on my bill or invoice?

To note there are two periods to account for on a Shopify bill:

1. Your billing cycle (e.g. when your invoice was issued, and whether it's a 30-day cycle) 
2. The app's 30-day subscription cycle.

Note: if you have a bill or an invoice based on a billing threshold, upgrade or downgrade events that happen after the invoice date would appear on subsequent invoices for the same subscription cycle.

For a 30-day billing cycle, you may see charges and event related to two subscription cycles, but only inclusive of the dates for the billing cycle:

In general, upgrades and downgrades are processed against a 30 day subscription cycle, and Shopify works by creating charges and credits against the remainder of the 30 day subscription cycle. To note, events that happen after the invoice date would appear on the next invoice, but for the same subscription cycle.

Upgrades will be shown as charges in the Apps section of your Shopify bill. Downgrades will be shown under Credits in your Shopify bill.

For a regular monthly subscription, you'll see a charge for the full 30-day cycle for the price of the plan at your current number of seats. If a subscription is cancelled in this cycle, then this is the final charge for the subscription plan.

For upgrades, you will see a charge for the difference from the previous plan, prorated to the remainder of the remaining 30-day cycle from the upgrade date (e.g. if the new app charge is applied immediately, then when you upgrade your plan by moving from a less expensive charge to a more expensive charge, the charge is prorated based on the difference in price and the number of days remaining in the billing cycle. )

For downgrades, you will see a credit for the difference from the previous plan prorated to the remainder of the 30-day cycle from the downgrade date (e.g. If the new app charge is applied immediately, then when you downgrade your plan by moving to a less expensive charge from a more expensive charge, the credit is prorated based on the difference in price and the number of days remaining in the billing cycle).

Note: when you move to our free plan, your subscription plan is automatically cancelled.