Understanding Percent Rent Terms
Percent rent enables you to negotiate a lower monthly base rent in exchange for a portion of your sales once the threshold is met. This lease method is appealing because you receive a lower monthly liability in months of lower sales. As the sales amount reaches a specified threshold (breakpoint), the percentage changes, thus altering the amount of the final rent amount. For a breakpoint, the rent can be a fixed amount, a percentage of sales, or a combination of fixed amount and percentage.
When multiple breakpoints are established, the system determines which breakpoint has been reached and adds its incremental percentage over and above the other breakpoints. For example, let's say the breakpoints are as follows:
0 to 1,000 (5%)
1,000.01 to 4,999.99 (4%)
5,000 to 99,999,999,999.99 (3% + 1,000 USD)
If the sales amount is 1,500 USD, then the system takes the maximum of the prior breakpoint multiplied by that breakpoint percentage (or amount, or both depending on lease terms), adds the incremental amount over that breakpoint maximum, multiplied by the new breakpoint percentage.
In this example, the calculation is as follows: 1,000 × 5% + (1,500 − 1,000) × 4% = 70.
Using the previous example, if a lease had three breakpoints in percent rent setup, and the sales amount reached the third level (10,000), then the calculation is as follows: 1,000 × 5% + (4,999.991,000) × 4% + (10,000 − 4,999.99) × 3% +1,000 = 1360.
These tables provide additional examples of the percent rent category based calculation methodology:
Percent Rent Setup Data:
Financial Term 
Amount 

Current Base Rent 
1000.00 USD 
Minimum Fee 
25.00 USD 
Maximum Fee 
800.00 USD 
Sales Breakpoints
From 
To 
Type 
Amount 
Full Breakpoint 

0 
999.99 
Percent 
5% 
50.00 USD 
1000 
4999.99 
Percent 
4% 
160.00 USD 
5000 
9999.99 
Percent 
3% 
150.00 USD 
10000 
99,999,999,999.99 
Percent 
2% 
Not applicable 
Sales Data
Year 
Month 
Reported Sales (USD) 
Breakpoint Amount 
Variable Rent (USD) 
Adjusted Variable Amount (USD) 
Total Rent (USD) 
Comment 

2004 
January 
250.00 
5% 
12.50 
1,025.00 
Minimum not met, use adjusted amount. 

2004 
February 
2,000 
VAR2 
90.00 
1,090.00 
Second breakpoint reached, add full breakpoint calculation to incremental difference. 

2004 
March 
1,800 
VAR2 
82.00 
1,082.00 

2004 
April 
6,000 
VAR3 
240.00 
1,240.00 
Third breakpoint reached, add full breakpoint calculations to incremental difference. 

2004 
May 
5,000 
VAR4 
210.00 
1,210.00 

2004 
June 
50,000 
VAR4 
1,160.00 
800.00 
1,800.00 
Maximum exceeded, use adjusted amount 
2004 
July 
30,000 
VAR4 
760.00 
1,760.00 

2004 
August 
15,000 
VAR4 
460.00 
1,460.00 

2004 
September 
7,500 
VAR3 
285.00 
1,285.00 

2004 
October 
4,200 
VAR2 
180.00 
1,180.00 

2004 
November 
800 
5% 
40.00 
1,040.00 

2004 
December 
20,000 
VAR4 
560.00 
1,560.00 
You define the percentage breakpoints for the percent rent tier structure before activating the lease; after the lease is activated, you must create an amendment to perform any changes to the structure. You include percent rent terms on the lease and enter them into the system prior to lease activation. You set the various sales breakpoints (or tiers) for the lease under different sales categories. In the absence of actual reported data, you can enter or have the system attempt to estimate sales data. You enter the estimated information on the Sales Report Details page and set the type to Estimated. The Sales Report Details page is a worksheet to enter and calculate the total sales amounts. The system uses past data to help determine an appropriate estimate.
Weekly Sales Method
The system will allow only one sales category on the percent rent setup. The system will use this category to create the sales report and import sales. This method will use only current period sales data.
If the bill amount is less than the minimum fee, the percent rent shall be zero and only the minimum rent will be charged. If the bill amount is more than the minimum fee, it calculates percent rent (sales overage) rent by deducting the minimum fee from the total bill amount. If the bill amount is more than the maximum fee then the maximum fee will be charged. Sales overage rent will be equal to the Maximum Fee  Minimum Fee.
The system shall apply breakpoints to calculate the percent as follows:
If the operator is Percent then:
If sales amount is between first breakpoint range, then:
First breakpoint's billable amount = (Sales amount – First breakpoint's from amount) * First breakpoint's percent.
If sales amount is between second breakpoint range, then:
Second breakpoint billable amount = (Sales amount – Second breakpoint's from amount) * Second breakpoint's percent.
If sales amount is between Nth breakpoint range, then:
Nth breakpoint billable amount = (Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent.
If the operator is Amount, then:
If sales amount is between first breakpoint range, then:
First breakpoint billable amount = First breakpoint's fixed amount.
If sales amount is between second breakpoint range, then:
Second breakpoint Billable amount = Second breakpoint's fixed amount.
If sales amount is between Nth breakpoint range, then:
Nth breakpoint billable amount = Nth breakpoint's fixed amount
If the operator is Both, then:
If sales amount is between first breakpoint range, then:
First breakpoint billable amount = (Sales amount – First breakpoint's from amount) * First breakpoint's percent + First breakpoint's fixed amount.
If sales amount is between second breakpoint range, then:
Second breakpoint billable amount = (Sales amount – Second breakpoint's from amount) * Second breakpoint's percent + Second breakpoint's fixed amount.
If sales amount is between Nth breakpoint range, then:
Nth breakpoint billable amount = (Sales amount – Nth breakpoint's from amount) * Nth breakpoint's percent + Nth breakpoint's fixed amount.
Total bill amount = first breakpoint's billable amount + second breakpoint's billable amount +…. + Nth breakpoint billable amount.
If the total bill Amount is less than minimum fee, then the sales overage rent will be zero.
If the total bill Amount is more than minimum fee, then deduct minimum fee from total bill amount to get the sales overage rent.
Weekly Sales Method Calculation Example
Assume the minimum is 2,500 USD and the maximum is 5,000 USD.
Breakpoints:
From Breakpoint 
To Breakpoint 
Operator 
Percent 

50,000.00 
150,000.00 
Percent 
9 
150,000.01 
500,000.00 
Percent 
8 
500,000.01 
1,000,000.00 
Percent 
7 
1,000,000.01 
99,999,999,999,999,900,000,000.00 
Percent 
4 
Sales reported by tenant:
Period 
Sales Amount 
1st Breakpoint 
2nd Breakpoint 
3rd Breakpoint 
4th Breakpoint 
Percent Rent 
Final Bill 

1 
100,000.00 
4,500.00 
NA 
NA 
NA 
4,500.00 
4,500.00 
2 
200,000.00 
9,000.00 
4,000.00 
NA 
NA 
13,000.00 
13,000.00 
3 
60,000.00 
900.00 
NA 
NA 
NA 
900.00 
2,500.00 
4 
350,000.00 
9,000.00 
16,000.00 
NA 
NA 
25,000.00 
25,000.00 
5 
1,100,000.00 
9,000.00 
28,000.00 
35,000.00 
4,000.00 
76,000.00 
50,000.00 
6 
40,000.00 
NA 
NA 
NA 
NA 
0 
2,500.00 
Each Period Method
This method will use only current period sales data. This calculation method will always have one sales category, which will be used for reporting/importing sales.
The system will annualize sales amount by multiplying the no. of periods in the calendar year. The system will apply breakpoints to annualized sales for calculating percent rent.
The annualized amount = current period's sales amount * Total Periods in a fiscal year.
The system shall apply breakpoints to calculate the percent as follows:
If the operator is Percent then:
If the sales amount is between first breakpoint range, then:
First breakpoint's billable amount = (Annualized Sales amount – First breakpoint's from amount) * First breakpoint's percent.
If sales amount is between second breakpoint range, then:
Second breakpoint's billable amount = (Annualized Sales amount – Second breakpoint's from amount) * Second breakpoint's percent).
If sales amount is between Nth breakpoint range, then:
Nth breakpoint's billable amount = (Annualized Sales amount – Nth breakpoint's from amount) * Nth breakpoint's percent).
If the operator is Amount, then:
If sales amount is between first breakpoint range, then:
First breakpoint's billable Amount = First breakpoint's fixed amount.
If sales amount is between second breakpoint range, then:
Second breakpoint's billable amount = Second breakpoint's fixed amount).
If sales amount is between Nth breakpoint range, then:
Nth breakpoint billable amount = Nth breakpoint's fixed amount).
If the operator is Both, then:
If sales amount is between first breakpoint range, then:
First breakpoint's billable amount = (Annualized Sales amount – First breakpoint's from amount) * First breakpoint's percent + First breakpoint's fixed amount.
If sales amount is between second breakpoint range, then:
Second breakpoint's billable amount = (Annualized Sales amount – Second breakpoint's from amount) * Second breakpoint's percent + Second breakpoint's fixed amount.
If sales amount is between Nth breakpoint range, then:
Nth breakpoint billable amount = (Annualized Sales amount – Nth breakpoint's from amount) * Nth breakpoint's percent + Nth breakpoint's fixed amount.
Total billable amount = First breakpoint's billable amount + Second breakpoint's billable amount +…. + Nth breakpoint billable amount
If the total bill amount is less than minimum fee, then the percent rent will be Zero and only minimum fee will be charged.
If the total bill Amount is more than minimum fee, then deduct minimum fee from total bill amount to get percent rent.
Each Period Calculation Example
Assume that the minimum is 2,500 USD and the maximum is 50,000 USD.
Breakpoints:
From Breakpoint 
To Breakpoint 
Operator 
Percent 

200,000.00 
600,000.00 
Percent 
9 
600,000.01 
1,000,000.00 
Percent 
8 
1,000,000.01 
1,500,000.00 
Percent 
7 
1,500,000.01 
99,999,999,999,999,900,000,000.00 
Percent 
4 
Sales Reported by tenant:
Period (Monthly 
Sales Amount 
Annualized Sales 
1st Breakpoint 
2nd Breakpoint 
3rd Breakpoint 
4th Breakpoint 
Percent Rent 
DeAnnualized Bill Amount 
Rent Amount 

1 
100,000.00 
1,200,000,00 
36,000.00 
32,000.00 
14,000.00 
NA 
82,000.00 
6833.33 
6833.33 
2 
200,000.00 
2,400,000.00 
36,000.00 
32,000.00 
35,000.00 
36,000.00 
139,000.00 
11583.33 
11583.33 
3 
60,000.00 
720,000.00 
36,000.00 
9,600.00 
NA 
NA 
45,600.00 
3,800.00 
3,800.00 
4 
350,000.00 
4,200,000.00 
36,000.00 
32,000.00 
35,000.00 
108,000.00 
211,000.00 
17,583.33 
17,583.33 
5 
1,200,000.00 
14,400,000.00 
36,000.00 
32,000.00 
35,000.00 
516,000.00 
619,000.00 
51583.33 
50,000.00 
6 
40,000.00 
480,000.00 
25,200.00 
NA 
NA 
NA 
25,200.00 
2,100.00 
2500.00 
Cumulative Method
System will calculate YTD sales amount by summing sales from the first period of the current fiscal year to current period. This calculation method will always have one sales category, which will be used for reporting/importing sales. Breakpoints will be applied to cumulative sales for calculating percent rent.
The previous YTD bill amount excluding current period will be deducted from the total bill amount to get current period's bill amount.
The YTD sales amount will equal to sum of sales amount from first period to current period. Note: The = YTD sales amount will include current period's sale amount.
The previous YTD bill amount is the sum of the bill amount from first period to previous period. Note: Previous period will be one period before the current period.
If the Operator is Percent then:
If YTD Sales Amount is between First breakpoint range, then
First breakpoint's YTD Billable Amount = (YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent
If sales amount is between second breakpoint range, then:
Second breakpoint's YTD Bill Amount = (YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent.
If sales amount is between Nth breakpoint range, then:
Nth breakpoint's YTD Bill Amount = (YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent).
If the Operator is Amount, then:
If YTD Sales Amount is between First breakpoint range, then:
First breakpoint's YTD billable Amount = First Breakpoint's Fixed Amount.
If YTD sales amount is between second breakpoint range, then:
Second breakpoint's YTD Billable Amount = Second Breakpoint's Fixed Amount)
If YTD sales amount is between Nth breakpoint range, then:
Nth breakpoint YTD Billable Amount = Nth breakpoint's fixed amount)
If the Operator is Both, then:
If YTD Sales Amount is between First breakpoint range, then:
First Breakpoint's YTD Billable Amount = (YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent + First Breakpoint's Fixed Amount.
If YTD sales amount is between second breakpoint range, then:
Second breakpoint's YTD Billable Amount = (YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent + Second Breakpoint's Fixed Amount.
If YTD sales amount is between Nth breakpoint range, then:
Nth breakpoint YTD Billable Amount = (YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent + Nth breakpoint's fixed amount.
Total YTD Billable amount = First breakpoint's YTD bill amount + Second breakpoint's YTD bill amount +…. + Nth Breakpoint YTD Bill Amount
Current period's billable amount = total YTD billable amount – previous YTD bill amount
If the total bill Amount is less than minimum fee, then the sales overage rent will be zero.
If the total bill Amount is more than minimum fee, then deduct minimum fee from total bill amount to get the percent rent (sales overage).
If the total bill amount for the current period is greater than maximum fee then the maximum fee should be charged to the tenant. In this case, percentage rent will be maximum fee less minimum fee.
When sales amount exceeds a breakpoint, then the breakpoint will have maximum billable amount and it will equal to:
(Breakpoint's To amount  Breakpoint's From amount) * Breakpoint's percent when operator is percentage
Breakpoint's fixed amount when operator is 'fixed':
(Breakpoint's To amount  Breakpoint's From amount) * Breakpoint's percent + Breakpoint's fixed amount when operator is Both
Cumulative Calculation Example
Assume the minimum is 2,500 USD and the maximum is 50,000 USD.
Breakpoints:
From Breakpoint 
To Breakpoint 
Operator 
Percent 

200,000.00 
600,000.00 
Percent 
9 
600,000.01 
1,000,000.00 
Percent 
8 
1,000,000.01 
1,500,000.00 
Percent 
7 
1,500,000.01 
99,999,999,999,999,900,000,000.00 
Percent 
4 
Sales reported by tenant:
Period (Monthly 
Sales Amount 
Cumulative Sales 
1st Breakpoint 
2nd Breakpoint 
3rd Breakpoint 
4th Breakpoint 
Percent Rent 
Rent for Current Period 
Rent Amount 

1 
100,000.00 
100,000.00 
NA 
NA 
NA 
NA 
0 
0 
2,500.00 
2 
200,000.00 
300,000.00 
9,000.00 
NA 
NA 
NA 
9,000.00 
6,500.00 
6,500.00 
3 
60,000.00 
360,000.00 
14.400.00 
NA 
NA 
NA 
14,400.00 
5,400.00 
5,400.00 
4 
350,000.00 
710,000.00 
36,000.00 
8,800.00 
NA 
NA 
44,800.00 
30,400.00 
30,400.00 
5 
1,100,000.00 
1,810,000.00 
36,000.00 
32,000.00 
35,000.00 
12,400.00 
115,400.00 
70,600.00 
50,000.00 
6 
40,000.00 
1,850,000.00 
36,000.00 
32,000.00 
35,000.00 
14,000.00 
117,000.00 
22,200.00 
22,200.00 
Cumulative Pro Rata Method
YTD sales amount including current period sales will be used to calculate percent rent. This calculation method will always have one sales category.
The sales amount will be annualized by multiplying the YTD sales with the no. of periods in a calendar year divided by no. of sales periods included in YTD sales. Breakpoints will be applied to annualized cumulative sales when calculating percent rent.
To calculate current period bill amount, percent rent amount will be deannualized and from that amount the previous YTD bill amount will be reduced.
Add YTD sales to get the Cumulative amount. The YTD sales amount will be the sum of sales amount from first period to current period. Note: Include current period sales into YTD sales. Annualize the YTD sales. Annual sales amount = YTD sales * (total periods in fiscal year/ no. periods in YTD sales). Calculate YTD bill amount by applying lease level breakpoints to annualized cumulative sales.
If the Operator is Percent then:
If Sales Amount is between First breakpoint range, then:
First breakpoint Billable Amount = (Annualized YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent
If sales amount is between second breakpoint range, then:
Second breakpoint's Billable Amount = (Annualized YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent
If sales amount is between Nth breakpoint range, then:
Nth breakpoint's Billable Amount = (Annualized YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent)
If the Operator is Amount, then:
If sales Amount is between First breakpoint range, then:
Bill Amount = First Breakpoint's Fixed Amount
If sales amount is between second breakpoint range, then:
Bill Amount = (First Breakpoint maximum Bill Amount + Second Breakpoint's Fixed Amount)
If sales amount is between Nth breakpoint range, then:
Bill Amount = (First breakpoint's maximum bill amount + Second breakpoint's maximum bill amount +….+(n1) breakpoint's maximum bill amount + Nth breakpoint's fixed amount)
If the Operator is Both, then:
If Sales Amount is between First breakpoint range, then:
First breakpoint's Billable Amount = (Annualized YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent) + First Breakpoint's Fixed Amount
If sales amount is between second breakpoint range, then:
Second breakpoint's Billable Amount = (Annualized YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's percent + Second Breakpoint's fixed amount)
If sales amount is between Nth breakpoint range, then:
Nth breakpoint billable amount = (Annualized YTD sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent + Nth breakpoint's fixed amount
Total annualized YTD Billable amount = First breakpoint's billable amount + Second breakpoint's billable amount +…. + Nth Breakpoint Billable Amount
Deannualize the above value to get YTD billable amount. YTD billable amount = Total annualized YTD billable amount * (No. periods in YTD sales / Total periods in fiscal year)
System will calculate Total bill amount by deducting previous YTD bill amount from rent calculated in step above (deannualized rent).
If the total bill Amount is less than minimum fee, then the sales overage rent will be zero. If the total bill amount is more than minimum fee, then deduct minimum fee from total bill amount to get sales overage rent. If the total bill amount for the current period is greater than maximum fee then the maximum fee should be charged to the tenant. In this case, percentage rent will be maximum fee less minimum fee.
When sales amount exceeds a breakpoint, then the breakpoint will have maximum billable amount and it shall equal to: (Breakpoint's To amount  Breakpoint's From amount) * Breakpoint's percent when operator is percentage
Breakpoint's fixed amount when operator is fixed: (Breakpoint's "To amount"  Breakpoint's From amount) * Breakpoint's percent + Breakpoint's fixed amount when operator is Both
Cumulative Pro Rata Calculation Example
Assume the minimum is 2,500 USD and the maximum is 50,000 USD.
Breakpoints:
From Breakpoint 
To Breakpoint 
Operator 
Percent 

500,000.00 
1,000,000.00 
Percent 
9 
1,000,000.01 
1,500,000.00 
Percent 
8 
1,500,000.01 
1,500,000.00 
Percent 
7 
3,000,000.01 
99,999,999,999,999,900,000,000.00 
Percent 
4 
Sales reported by tenant:
Period (Monthly) 
Sales Amount 
Cumulative Sales 
Annualized Cumulative Sales 
1st Breakpoint 
2nd Breakpoint 
3rd Breakpoint 
4th Breakpoint 
Percent Rent 
DeAnnualized Percent Rent 
Rent for Current Period 
Rent Amount 

1 
100,000.00 
100,000.00 
1,200,000.00 
45,000.00 
16,000.00 
NA 
NA 
61,000.00 
5,083.33 
5,083.33 
5,083.33 
2 
200,000.00 
300,000.00 
1,800,000.00 
45,000.00 
40,000.00 
21,000.00 
NA 
106,000.00 
17,666.67 
12,583.33 
12,583.33 
3 
60,000.00 
360,000.00 
1,440,000.00 
45,000.00 
35,200.00 
NA 
NA 
80,200.00 
20,050.00 
2,383,33 
2,500.00 
4 
350,000.00 
710,000.00 
2,130,000.00 
45,000.00 
40,000.00 
44,100.00 
NA 
129,100 
43,033.33 
22,866.67 
22,866.67 
5 
1,100,000.00 
1,810,000.00 
4,344,000.00 
45,000.00 
40,000.00 
105,000.00 
53,760.00 
243,760.00 
101,566.67 
58,533.33 
50,000.00 
6 
40,000.00 
1,850,000.00 
3,700,000.00 
45,000.00 
40,000.00 
105,000.00 
28,000.00 
218,000.00 
109,000.00 
15,966.67 
15,966.67 
Modified Cumulative Method
YTD sales amount including current period sales will be used to calculate percent rent. This calculation method will always have one sales category. The following calculation shall be used when calculating percent rent:
Get the highest breakpoint that the total sales amount is reached. Apply the highest breakpoint to the entire sales amount that exceeds the first breakpoint. The YTD bill amount excluding current period will be deducted from the total bill amount to get current period's bill amount.
The YTD sales amount is equal to sum of sales amount from first period to current period. Note: The = YTD sales amount includes current period's sale amount.
If the Operator is Percent then:
If YTD Sales Amount is between First breakpoint range, then:
First breakpoint's YTD Billable Amount = (YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent
If sales amount is between Nth breakpoint range, then:
Nth breakpoint's YTD Bill Amount = (YTD Sales amount – First breakpoint's From amount) * Nth breakpoint's Percent
If the Operator is Amount, then:
If YTD Sales Amount is between First breakpoint range, then:
First breakpoint's YTD billable Amount = First Breakpoint's Fixed Amount
If YTD sales amount is between Nth breakpoint range, then:
Nth breakpoint YTD Billable Amount = Nth breakpoint's fixed amount
If the Operator is Both, then:
If YTD Sales Amount is between First breakpoint range, then:
First Breakpoint's YTD Billable Amount = (YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent + First Breakpoint's Fixed Amount
If YTD sales amount is between Nth breakpoint range, then:
Nth breakpoint YTD Billable Amount = (YTD Sales amount – First breakpoint's From amount) * Nth breakpoint's Percent + Nth breakpoint's fixed amount
Total YTD Billable amount = First breakpoint's YTD bill amount + .... +Nth Breakpoint YTD Bill Amount
Current period's billable amount = total YTD billable amount – previous YTD bill amount
If the total bill Amount is less than minimum fee, then the sales overage rent shall be Zero. If the total bill Amount is more than minimum fee, then deduct minimum fee from total bill amount to get sales overage rent. If the total bill amount for the current period is greater than maximum fee then the maximum fee should be charged to the tenant. In this case, percentage rent will be maximum fee less minimum fee.
When sales amount exceeds a breakpoint, then the breakpoint will have maximum billable amount and it is equal to: (Breakpoint's To amount  Breakpoint's From amount) * Breakpoint's percent when operator is percentage
Breakpoint's fixed amount when operator is fixed: (Breakpoint's To amount  Breakpoint's From amount) * Breakpoint's percent + Breakpoint's fixed amount when operator is Both
Modified Cumulative Calculation Example
Assume the minimum is 2,500 USD and the maximum is 50,000 USD.
Breakpoints:
From Breakpoint 
To Breakpoint 
Operator 
Percent 

200,000.00 
600,000.00 
Percent 
9 
600,000.01 
1,000,000.00 
Percent 
8 
1,000,000.01 
1,500,000.00 
Percent 
7 
1,500,000.01 
99,999,999,999,999,900,000,000.00 
Percent 
4 
Sales reported by tenant:
Period (Monthly) 
Sales Amount 
Cumulative Sales 
1st Breakpoint 
2nd Breakpoint 
3rd Breakpoint 
4th Breakpoint 
Percent Rent 
Rent for Current Period 
Rent Amount 

1 
100,000.00 
100,000.00 
NA 
NA 
NA 
NA 
0 
0 
2,500.00 
2 
200,000.00 
300,000.00 
9,000.00 
NA 
NA 
NA 
9,000.00 
6,500.00 
6,500.00 
3 
60,000.00 
360,000.00 
14,400.00 
NA 
NA 
NA 
14,400.00 
5,400.00 
5,400.00 
4 
350,000.00 
710.000.00 
NA 
40800.00 
NA 
NA 
40,800.00 
26,400.00 
26,400.00 
5 
1,100,000.00 
1,810,000.00 
NA 
NA 
NA 
64,400.00 
64,400.00 
23,600.00 
23,600.00 
6 
40,000.00 
1,850,000.00 
NA 
NA 
NA 
66,000.00 
66,000.00 
1,600.00 
2,500.00 
Partial Year Pro Rata Method
In a specialized billing reconciliation, property owners use the lease period as a cutoff date. Therefore, any tenant who moves in or out within the lease period can be charged a prorated share of the sales for the partial period. For calculating the prorated rent amount, the sales data for the period of one year beginning from lease commencement date will be considered. In the case of last period, the sales data for the period of one year ending on lease termination date will be used for calculating rent. System will use the following formula for calculating the rent amount:
First period = Rent calculated as per breakpoints * (Next period begin date – Lease Commencement date) / (Number of days in the year)
Last period = Rent calculated as per breakpoints * (Lease Termination date  previous period End Date) / (Number of days in the year)
If the prorate first and last period Partial Year Proration flag is checked on the Percent Rent Terms page, then first and last period percentage rent will be calculated by this method. Rent calculated as per breakpoint will be as per the calculation method selected on the lease. The partial year prorata feature can be used only with annual calendars. In the formula mentioned above, by default, if the partial year proration checkbox is checked then the number of days in the denominator would be same as actual number of days in the year (365/366). If on financial terms page the user has selected the 360 days proration method, then in that case the denominator value in formula mentioned above will be 360.
Partial Year Pro Rata Calculation Example
Assume the minimum is 2,500 USD and the maximum is 50,000 USD.
Breakpoints:
From Breakpoint 
To Breakpoint 
Operator 
Percent 

200,000.00 
600,000.00 
Percent 
9 
600,000.01 
1,000,000.00 
Percent 
8 
1,000,000.01 
1,500,000.00 
Percent 
7 
1,500,000.01 
99,999,999,999,999,900,000,000.00 
Percent 
4 
Sales reported by tenant:
Period (Yearly) 
Sales Amount 
Annualized Sales 
1st Breakpoint 
2nd Breakpoint 
3rd Breakpoint 
4th Breakpoint 
Percent Rent 
DeAnnualized Bill Amount 
Rent Amount 
Proration Ratio 
Final Rent 

2006 
1,200,000.00 
1,200,000.00 
36,000.00 
32,000.00 
14,000.00 
NA 
82,000.00 
82,000.00 
6,833.33 
0.59 
4,006.39 
2007 
2,400,000.00 
2,400,000.00 
36,000.00 
32,000.00 
35,000.00 
36,000.00 
139,000.00 
139,000.00 
11,583.33 
1 
11,583.33 
2008 
720,000.00 
720,000.00 
36,000.00 
9,600.00 
NA 
NA 
45,600.00 
45,600.00 
3,800.00 
1 
3,800.00 
2009 
4,200,000.00 
4,200,000.00 
36,000.00 
32,000.00 
35,000.00 
108,000.00 
211,000.00 
211,000.00 
17,583.33 
1 
17,583.33 
2010 
14,400,000.00 
14,400,000.00 
36,000.00 
32,000.00 
35,000.00 
516,000.00 
619,000.00 
619,000.00 
50,000.00 
1 
50,000 .00 
2011 
480,000.00 
480,000.00 
25,200.00 
NA 
NA 
NA 
25,500.00 
25,500.00 
2,100.00 
0.58 
1,219.72 
Lease Pro Rata Method
This method uses two levels of breakpoints: Lease level and Sales reporting categories level. Lease level breakpoints will be used to calculate total bill amount on total sales of all categories. Category level breakpoints will be used to distribute bill amount by category.
YTD sales amount that includes current period sales will be used to calculate percent rent. Sales amount will be sum of all sales categories' sales amount. The sales amount shall be annualized by multiplying the no. of periods in a calendar year divided by no. of sales periods included in YTD sales.
Lease level breakpoints will be applied to annualized cumulative sales to calculate percent rent amount. The rent amount will be deannualized by dividing calculated rent by the no. of periods in a calendar year and then multiplying the same by number of sales periods included in YTD sales. To calculate current period bill amount, the previous periods YTD bill amount will be reduced from the amount calculated inn the step above.
If rent amount for the current period is less than the minimum fee then minimum fee will be charged to tenant as percentage rent. If rent amount for the current period is greater than maximum fee then maximum fee will be charged as percentage rent.
This method does not categorize the rent as minimum and percentage rent. For this method, the total rent amount will be distributed by categories.
To prorate the total bill amount among the categories:
YTD sales amount for the category will be used for calculation.
The category's sales amount will be annualized by multiplying the no. of periods in a calendar year divided by no. of sales periods included in YTD sales.
Category level breakpoints will be applied to annualized cumulative sales to get the category's bill amount. This calculation will be performed for all categories.
The total rent amount will be distributed among sales categories using ratio of amount calculated in step above. If none of the category has reached its breakpoint then the rent amount will be distributed in ratio of cumulative sales for all categories.
Get the total sales amount by summing up all sales categories sales.
Calculate the YTD (YearToDate) sales by summing up all sales from first period to current period.
Annualize the YTD sales. Annualized YTD sales = YTD sales * (Total periods in fiscal year / No. periods in YTD sales).
If the Operator is Percent then:
If annualized YTD Sales Amount is between First breakpoint range, then:
First breakpoint Billable Amount = (Annualized YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent
If annualized YTD sales amount is between second breakpoint range, then:
Second breakpoint's Billable Amount = (Annualized YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent
If annualized YTD sales amount is between Nth breakpoint range, then:
Nth breakpoint's Billable Amount = (Annualized YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent)
If the Operator is Amount, then:
If annualized YTD Sales Amount is between First breakpoint range, then:
Bill Amount = First Breakpoint's Fixed Amount
If annualized YTD sales amount is between second breakpoint range, then:
Bill Amount = (First Breakpoint maximum Bill Amount + Second Breakpoint's Fixed Amount)
If annualized YTD sales amount is between Nth breakpoint range, then:
Bill Amount = (First breakpoint's maximum bill amount + Second breakpoint's maximum bill amount +….+(n1) breakpoint's maximum bill amount + Nth breakpoint's fixed amount)
If the Operator is Both, then:
If Sales Amount is between First breakpoint range, then:
First breakpoint's Billable Amount = (Annualized YTD Sales amount – First breakpoint's from amount) * First breakpoint's Percent) + First Breakpoint's Fixed Amount
If sales amount is between second breakpoint range, then:
Second breakpoint's Billable Amount = (Annualized YTD Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent + Second Breakpoint's Fixed Amount)
If sales amount is between Nth breakpoint range, then:
Nth breakpoint Billable Amount = (Annualized YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent + Nth breakpoint's fixed amount
Total annualized YTD Billable amount = First breakpoint's billable amount + Second breakpoint's billable amount +…. + Nth Breakpoint Billable Amount
Deannualize the above value to get YTD billable amount. YTD billable amount = Total annualized YTD billable amount * (No. periods in YTD sales / Total periods in fiscal year)
Subtract the Previous period YTD bill amount to get the current Total Bill amount.
Prorate the Total bill amount among all the sales categories using the following method:
Calculate the YTD (YearToDate) sales by summing up a category's sales from first period to current period.
Annualize the category YTD sales. Annualized YTD category sales = category YTD sales * (Total periods / No. periods in YTD sales).
Apply the category level breakpoints:
If the Operator is Percent then:
If annualized YTD category Sales Amount is between First breakpoint range, then:
First breakpoint Billable Amount = (Annualized YTD category Sales amount – First breakpoint's from amount) * First breakpoint's Percent
If annualized YTD category sales amount is between second breakpoint range, then:
Second breakpoint's Billable Amount = (Annualized YTD category Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent
If annualized YTD category sales amount is between Nth breakpoint range, then:
Nth breakpoint's Billable Amount = (Annualized YTD category Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent)
If the Operator is Amount, then:
If annualized YTD category Sales Amount is between First breakpoint range, then:
First Breakpoint's category Billable Amount = First Breakpoint's Fixed Amount
If annualized YTD category sales amount is between second breakpoint range, then:
Second Breakpoint's category Billable Amount = Second Breakpoint's Fixed Amount
If annualized YTD sales amount is between Nth breakpoint range, then:
Nth breakpoint's category Bill Amount = Nth breakpoint's fixed amount
If the Operator is Both, then:
If annualized YTD category Sales Amount is between First breakpoint range, then:
First breakpoint's category Billable Amount = (Annualized YTD category Sales amount – First breakpoint's from amount) * First breakpoint's Percent) + First Breakpoint's Fixed Amount
If sales amount is between second breakpoint range, then:
Second breakpoint's category Billable Amount = (Annualized YTD category Sales Amount – Second Breakpoint's From Amount) * Second breakpoint's Percent + Second Breakpoint's Fixed Amount)
If sales amount is between Nth breakpoint range, then:
Nth breakpoint Billable Amount = (Annualized YTD Sales amount – Nth breakpoint's from amount) * Nth breakpoint's Percent + Nth breakpoint's fixed amount
Annualized YTD category Billable amount = First breakpoint's category billable amount + Second breakpoint's category billable amount +…. + Nth Breakpoint category Billable Amount
Category's bill amount = Total billable amount * Annualized YTD category Billable amount / sum of all sales categories annualized YTD category billable amount.
If the total bill Amount is less than minimum fee, then the minimum rent will be charged as percentage rent. If the total bill Amount is greater than maximum then maximum fee will be charged as percentage rent.
When sales amount exceeds a breakpoint, then the breakpoint will have maximum billable amount and it shall equal to: (Breakpoint's To amount  Breakpoint's From amount) * Breakpoint's percent when operator is percentage
Breakpoint's fixed amount when operator is fixed: (Breakpoint's To amount  Breakpoint's From amount) * Breakpoint's percent + Breakpoint's fixed amount when operator is Both
Lease Pro Rata Calculation Examples
Assume the minimum is 2,500 USD and the maximum is 50,000 USD.
Breakpoints:
From Breakpoint 
To Breakpoint 
Operator 
Percent 

500,000.00 
1,000,000.00 
Percent 
9 
1,000,000.01 
1,500,000.00 
Percent 
8 
1,500,000.01 
1,500,000.00 
Percent 
7 
3,000,000.01 
99,999,999,999,999,900,000,000.00 
Percent 
4 
Method details:
Tenant will report sales at agreed frequency.
Billing for percent rent will be as per calendar defined on the percent rent term page.
Even though sales are reported category wise the breakpoints will be applied to annualized cumulative total sales figure.
For calculating cumulative and annualized sales, all reported/estimated sales report in current year will be considered.
Breakpoints will be applied to annualized sales.
Percent rent amount charged for previous period will be reduced from the calculated amount.
Sales reported by tenant:
Period (Monthly) 
Sales Amount 
Cumulative Sales 
Annualized Cumulative Sales 
1st Breakpoint 
2nd Breakpoint 
3rd Breakpoint 
4th Breakpoint 
Percent Rent 
Deannualized Percent Rent 
Rent for Current Period 
Rent Amount 

1 
100,000.00 
100,000.00 
1,200,000.00 
45,000.00 
16,000.00 
NA 
NA 
61,000.00 
5,083.33 
5,083.33 
5,083.33 
2 
200,000.00 
300,000.00 
1,800,000.00 
45,000.00 
40,000.00 
21,000.00 
NA 
106,000.00 
17,666.67 
12,583.33 
12,583.33 
3 
60,000.00 
360,000.00 
1,440,000.00 
45,000.00 
35,200.00 
NA 
NA 
80,200.00 
20,050.00 
2,383.33 
2,500.00 
4 
350,000.00 
710.000.00 
2,130,000.00 
45,000.00 
40,000.00 
44,100.00 
NA 
129,100.00 
43,033.33 
22,866.67 
22,866.67 
5 
1,100,000.00 
1,810,000.00 
4,344,000.00 
45,000.00 
40,000.00 
105,000.00 
53760.00 
243,760.00 
101,566.67 
58,533.33 
50,000.00 
6 
40,000.00 
1,850,000.00 
3,700,000.00 
45,000.00 
40,000.00 
105,000.00 
28,000.00 
218,000.00 
109,000.00 
15,966.67 
15,966.67 
For the following sales categories assume that the percent rent amount for the period will be distributed in ration of amount calculated category wise on sales category breakpoint and if in any period none of the categories exceed first breakpoint then percent rent for the period will be distributed in ratio of sales.
Food breakpoints:
From Breakpoint 
To Breakpoint 
Operator 
Percent 

400,000.00 
500,000.00 
Percent 
6 
500,000.01 
99,999,999,999,999,900,000,000.00 
Percent 
3 
Beverages Breakpoints:
From Breakpoint 
To Breakpoint 
Operator 
Percent 

300,000.00 
600,000.00 
Percent 
5 
600,000.01 
99,999,999,999,999,900,000,000.00 
Percent 
3 
Liquor Breakpoints:
From Breakpoint 
To Breakpoint 
Operator 
Percent 

700,000.00 
1,000,000.00 
Percent 
9 
1,000,000,01 
99,999,999,999,999,900,000,000.00 
Percent 
5 
Period 1 percent rent = 5,083.33
Period rent details:
Category 
Cumulative Sales and Sales Amount 
Annualized Sales 
Percent Rent 
Distributed Rent 

Food 
30,000 
360,000 
0 
1,525 
Beverages 
20,000 
240,000 
0 
1016.67 
Liquor 
50,000 
600,000 
0 
2,541.67 
Totals 
100,000 
1,200,000 
0 
Period 2 percent rent = 12,583.33
Period rent details:
Category 
Cumulative Sales 
Sales Amount 
Annualized Sales 
Percent Rent 
Distributed Rent 

Food 
60,000 
30,000 
360,000 
0 
0 
Beverages 
50,000 
30,000 
300,000 
0 
0 
Liquor 
190,000 
140,000 
1,140,000 
39,600 
12,583.33 
Totals 
300,000 
1,800,000 
39,600 
Period 3 percent rent = 2,500
Period rent details:
Category 
Cumulative Sales 
Sales Amount 
Annualized Sales 
Percent Rent 
Distributed Rent 

Food 
75,000 
15,000 
300,000 
0 
0 
Beverages 
75,000 
25,000 
300,000 
0 
0 
Liquor 
210,000 
20,000 
840,000 
12,600 
0 
Totals 
360,000 
1,440,000 
12,600 
2,500 
Period 4 percent rent = 22,866.67
Period rent details:
Category 
Cumulative Sales 
Sales Amount 
Annualized Sales 
Percent Rent 
Distributed Rent 

Food 
180,000 
105,000 
540,000 
7,200 
3,380.70 
Beverages 
130,000 
55,000 
390,000 
4,500 
2,112.94 
Liquor 
400,000 
190,000 
1,200,000 
37,000 
17,373.03 
Totals 
710,000 
2,130,000 
48,700 
Period 5 percent rent = 50,000
Period rent details:
Category 
Cumulative Sales 
Sales Amount 
Annualized Sales 
Percent Rent 
Distributed Rent 

Food 
600,000 
420,000 
1,440,000 
34,200 
12,787.92 
Beverages 
410,000 
280,000 
984,000 
26,520 
9,916.24 
Liquor 
800,000 
400,000 
1,920,000 
73,000 
27,295.84 
Totals 
1,810,000 
4,344,000 
133,720 
Period 6 percent rent = 15,966.67
Period rent details:
Category 
Cumulative Sales 
Sales Amount 
Annualized Sales 
Percent Rent 
Distributed Rent 

Food 
610,000 
10,000 
1,220,000 
27,600 
4,065.31 
Beverages 
430,000 
20,000 
860,000 
22,800 
3,358.30 
Liquor 
810,000 
10,000 
1,620,000 
58,000 
8,543.05 
Totals 
1,850,000 
3,700,000 
108,400 
Sales Estimation Methods
The PeopleSoft Real Estate Management system provides you with three sales estimation methods to assist you in deciding the estimated sales data. Using this data helps you determine the monthly rent amount.
The three sales estimation methods are:
Past 6 Period Average: The system takes an average of sales of all prior periods up to six months, assuming there is sales data for the last six months in the database.
If data is not available for all six months, it takes only the average of whatever data is available up to the last six months. The system cannot provide an estimate if there is no data for the last six months.
Same Period Last Year: The system takes the sales from the same period last year assuming there is sales data for the same period last year.
For example, if the current sales report being estimated is period 2 of 2005, then the system looks for period 2 of 2004 to formulate an estimate. The system cannot provide an estimate if there is no data for the same period last year.
Prior Period: The system takes the sales for the preceding period, assuming there is sales data for the preceding period. The system cannot provide an estimate if there is no data for the preceding period.
Note: In addition to the sales estimation methods, the system also provides an adjustment factor that is a percentage field, at the lease level, to assist with altering the numbers to account for slower business, recession periods, inflation, and so on.
Adjustments to Estimated Rents
When you bill based on estimated sales, you will likely need to make adjustments, effectively changing the actual billable rent amount. The system provides the ability to adjust the previously calculated and processed data, as well as the ability to adjust the prior entries posted to the various subsystems. This is called the sales report revision.
A change to previously processed calculated data is called an adjustment. You can change sales report data any number of times before the transactions are processed. While making an adjustment, you select the sales type to indicate the changes that you are making. The sales type has no bearing on generating billing lines; it is informational only. The same billing lines are generated regardless of type and are updated at any time throughout this process.
When you enter the new data, the system calculates the rent amount on the worksheet. However, the system also takes into account the last processed worksheet and compares the two to determine the amount of the adjustment. Although the data from worksheet to worksheet is compared to determine the net difference, doing so accurately over multiple iterations can be complicated. As a result, the system uses the last of the prior worksheets to determine the amount billed. The system creates a complete reversal of the bill, sending a negative bill entry to the same transaction code by sales category, and updates the bill with the new amounts. For example, the original worksheet has three sales categories and three bill lines generated for billing, each with a unique transaction code. During an adjustment process, three negative bill line entries are created for the full amount billed, along with three new bill lines for the new full amount to bill.
On the Sales Report Details page for processed reports, the latest worksheet appears as displayonly until you click the Update Report button. The worksheet is then available for changes, and a new version is saved to the table with a new revision number. You can view all past adjustments, but adjust only the latest one.