# Dividend Payout Ratio Calculator

URL: https://speedycalculator.com/calculators/finance/dividend-payout-ratio/
Last updated: 2026-10-25

> The dividend payout ratio calculator works out the share of a company's earnings paid out as dividends – from totals or per-share figures – and the retention ratio left for reinvestment.

## Inputs

- Use
- Total dividends
- Net income
- Dividends per share
- Diluted earnings per share

## Results

- Dividend payout ratio
- Retention ratio
- Sustainability

## Formula

```
Payout ratio = total dividends ÷ net income = dividends per share ÷ diluted EPS
Retention ratio = 1 − payout ratio
```

## Explanation

Payout ratios show how sustainable a dividend is. Mature companies often pay out 40–60%; payout ratios above 100% mean the company is paying more than it earns, which can't last.

### How to use the Dividend Payout Ratio Calculator

- **Use**
- **Total dividends**
- **Net income**
- **Dividends per share**
- **Diluted earnings per share**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter total dividends and net income, or dividends per share and diluted EPS.

### Tips

- Take figures from the same financial statements and the same fiscal year.
- Compare ratios with companies in the same industry, not across industries.
- Use several valuation measures together; no single ratio tells the whole story.
- Market prices change every second – refresh the share price before you rely on a result.

### Common mistakes to avoid

- Mixing per-share figures with company totals.
- Using trailing earnings for one company and forward earnings for another.
- Forgetting dilution from options and convertible securities.

### Inputs explained

FieldWhat to enterUseChoose one: Company totals, Per-share figuresTotal dividendsAmount in your currencyNet incomeAmount in your currencyDividends per shareAmount in your currencyDiluted earnings per shareAmount in your currency

### Example values

How the main result changes when **Total dividends** changes and everything else stays at the example values above:

Total dividendsDividend payout ratio (%)20,000,0002030,000,0003040,000,0004050,000,0005060,000,0006080,000,00080

## Worked example

Inputs — Use: Company totals; Total dividends: $40,000,000; Net income: $100,000,000; Dividends per share: $1.6; Diluted earnings per share: $4.

Results — **Dividend payout ratio = 40 %**; Retention ratio = 60 %; Sustainability = Moderate.

## FAQ

**What is a good payout ratio?**
30–60% is often seen as sustainable; it depends on the industry.

**Why would a payout ratio exceed 100%?**
Dividends are funded from reserves or debt – a warning sign.

**Do REITs have high payout ratios?**
Yes – U.S. REITs must distribute at least 90% of taxable income.

**What formula does the Dividend Payout Ratio Calculator use?**
Payout ratio = total dividends ÷ net income = dividends per share ÷ diluted EPS.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)