diff --git a/src/app/Observers/EntitlementObserver.php b/src/app/Observers/EntitlementObserver.php
--- a/src/app/Observers/EntitlementObserver.php
+++ b/src/app/Observers/EntitlementObserver.php
@@ -113,12 +113,13 @@
         }
 
         $cost = 0;
+        $now = Carbon::now();
 
         // get the discount rate applied to the wallet.
         $discount = $entitlement->wallet->getDiscountRate();
 
         // just in case this had not been billed yet, ever
-        $diffInMonths = $entitlement->updated_at->diffInMonths(Carbon::now());
+        $diffInMonths = $entitlement->updated_at->diffInMonths($now);
         $cost += (int) ($entitlement->cost * $discount * $diffInMonths);
 
         // this moves the hypothetical updated at forward to however many months past the original
@@ -126,24 +127,21 @@
 
         // now we have the diff in days since the last "billed" period end.
         // This may be an entitlement paid up until February 28th, 2020, with today being March
-        // 12th 2020. Calculating the costs for the entitlement is based on the daily price for the
-        // past month -- i.e. $price/29 in the case at hand -- times the number of (full) days in
-        // between the period end and now.
-        //
-        // a) The number of days left in the past month, 1
-        // b) The cost divided by the number of days in the past month, for example, 555/29,
-        // c) a) + Todays day-of-month, 12, so 13.
-        //
+        // 12th 2020. Calculating the costs for the entitlement is based on the daily price
 
-        $diffInDays = $updatedAt->diffInDays(Carbon::now());
+        // the price per day is based on the number of days in the last month
+        // or the current month if the period does not overlap with the previous month
+        // FIXME: This really should be simplified to $daysInMonth=30
 
-        $dayOfThisMonth = Carbon::now()->day;
+        $diffInDays = $updatedAt->diffInDays($now);
 
-        // days in the month for the month prior to this one.
-        // the price per day is based on the number of days left in the last month
-        $daysInLastMonth = \App\Utils::daysInLastMonth();
+        if ($now->day >= $diffInDays) {
+            $daysInMonth = $now->daysInMonth;
+        } else {
+            $daysInMonth = \App\Utils::daysInLastMonth();
+        }
 
-        $pricePerDay = (float)$entitlement->cost / $daysInLastMonth;
+        $pricePerDay = $entitlement->cost / $daysInMonth;
 
         $cost += (int) (round($pricePerDay * $discount * $diffInDays, 0));
 
diff --git a/src/tests/Feature/EntitlementTest.php b/src/tests/Feature/EntitlementTest.php
--- a/src/tests/Feature/EntitlementTest.php
+++ b/src/tests/Feature/EntitlementTest.php
@@ -150,18 +150,32 @@
 
         $wallet = $user->wallets()->first();
 
-        $this->backdateEntitlements($user->entitlements, Carbon::now()->subWeeks(7));
+        $backdate = Carbon::now()->subWeeks(7);
+        $this->backdateEntitlements($user->entitlements, $backdate);
 
         $charge = $wallet->chargeEntitlements();
 
-        $this->assertTrue($wallet->balance < 0);
+        $this->assertSame(-1099, $wallet->balance);
 
         $balance = $wallet->balance;
+        $discount = \App\Discount::where('discount', 30)->first();
+        $wallet->discount()->associate($discount);
+        $wallet->save();
 
         $user->removeSku($storage, 4);
 
-        // we expect the wallet to have been charged.
-        $this->assertTrue($wallet->fresh()->balance < $balance);
+        // we expect the wallet to have been charged for ~3 weeks of use of
+        // 4 deleted storage entitlements, it should also take discount into account
+        $backdate->addMonthsWithoutOverflow(1);
+        $diffInDays = $backdate->diffInDays(Carbon::now());
+
+        // entitlements-num * cost * discount * days-in-month
+        $max = intval(4 * 25 * 0.7 * $diffInDays / 28);
+        $min = intval(4 * 25 * 0.7 * $diffInDays / 31);
+
+        $wallet->refresh();
+        $this->assertTrue($wallet->balance >= $balance - $max);
+        $this->assertTrue($wallet->balance <= $balance - $min);
 
         $transactions = \App\Transaction::where('object_id', $wallet->id)
             ->where('object_type', \App\Wallet::class)->get();