Payment Date

The payment date (or payable date) is the date on which the company actually deposits the dividend into shareholders' brokerage accounts. It's the final step in the dividend process, after the ex-dividend date and record date.

Formula

Payment Date = Record Date + (typically 1-2 weeks)

Companies announce the record date and payment date together. The actual transfer typically occurs on or shortly after the payment date.

Example

Verizon (VZ) announces a quarterly dividend with an ex-dividend date of October 13, record date of October 15, and payment date of November 1. If you own VZ before October 13, the cash payment appears in your brokerage account on or around November 1.

How to Interpret It

• The final milestone: The payment date is when your dividend actually arrives; the ex and record dates are behind you.
• Cash deposit: The dividend is deposited directly into your brokerage account, usually available the same day or the next business day.
• Reinvestment: Many investors use dividend reinvestment plans (DRIPs) to automatically buy more shares with the dividend payment.
• Tax implications: The dividend becomes taxable income in the year of the payment date (not the announcement date).
• Multiple payments: Many dividend stocks pay quarterly, so each quarter has its own ex, record, and payment dates.

Limitations

• The payment date is set by the company and is rarely moved (except in extreme situations like bankruptcies).
• If your broker experiences a system issue, dividend payment might be delayed, though the company has performed its obligation.
• Foreign taxes or withholding may reduce the amount received, especially for non-U.S. residents.
• Dividend payments may be reduced or skipped if the company faces financial difficulties.

Related Terms

• Ex-Dividend Date — the cutoff date to be eligible for the dividend
• Record Date — when the company tallies who owns the stock
• Dividend — the cash payment itself
• DRIP — using dividends to buy more shares automatically