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Dividend Payout Ratio

Free Dividend Payout Ratio calculator with clear step-by-step results.

About Dividend Payout Ratio

The payout ratio shows what share of profit a company returns to shareholders.

Formula

Formula

Payout ratio = dividends ÷ net income × 100

Worked example

With the default values below, Dividend Payout Ratio returns Payout Ratio of 40.0%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Dividends paidminimum 0 $
20,000 $
Net incomeminimum 0 $
50,000 $

Results

Payout Ratio
40.0%
Retained Earnings
$30,000.00
Retention Ratio
60.0%

Step by step

  1. 1Values used
  2. 2Formula
  3. 3Payout Ratio= 40.0
  4. 4Retained Earnings= $30,000
  5. 5Retention Ratio= 60.0

Assumptions and limits

  • The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 1 decimal place, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How does this calculator work?

The payout ratio shows what share of profit a company returns to shareholders.

Why does this matter?

Very high ratios may not be sustainable.

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