A Rule 4 is a deduction applied to winnings when a horse is withdrawn from a race after you have already taken a price.
The reason for this is simple: if one of the runners comes out, the remaining horses effectively have a better chance of winning. A Rule 4 deduction is used to adjust for that change.
In practical terms, it means that if you backed a horse at fixed odds before a non-runner was declared, your return may be reduced depending on the price of the withdrawn horse.
The shorter the price of the horse that came out, the bigger the Rule 4 deduction is likely to be.

