payout

Payout refers to the act of distributing funds to a recipient or the amount that is paid out. It is used across finance, business, and everyday transactions to describe a payment made in a single instance or over time.

In corporate finance, payouts are distributions of profits to owners or shareholders, such as dividends or stock buybacks. The payout ratio, calculated as dividends or distributions divided by earnings, indicates how much of a company’s profit is returned to shareholders versus retained for reinvestment.

In employment and human resources, payout describes the payment of wages, salaries, bonuses, severance, or other compensation to employees. Payroll systems typically issue payouts on a regular schedule (for example weekly, biweekly, or monthly), with applicable withholdings and taxes.

In insurance and law, a payout is the amount paid to settle a claim, policy benefit, or legal settlement. In gambling and gaming, payouts describe the winnings returned to players and are often summarized as payout percentages or odds, which reflect expected returns over time.

Payment methods and timing vary and may include cash, checks, direct deposits, or electronic transfers. Timing can depend on contract terms, regulatory requirements, and processing capabilities. Payout policies at organizations define eligibility, minimum payout amounts, and processing cutoffs.