What is the dividend payout ratio?
The dividend payout ratio shows what portion of a company’s net income is distributed to shareholders as dividends, versus what’s retained and reinvested back into the business.
The formula
Dividend Payout Ratio = Total Dividends Paid / Net Income × 100. The remainder, called the retention ratio, is the share of earnings the company keeps for growth, debt repayment, or reserves.
This calculator is for general educational purposes. A very high payout ratio can sometimes signal limited reinvestment for growth, while a very low or zero ratio is common for growth-focused companies; neither is inherently good or bad without more context.
Last reviewed August 2026