What is a payout period?

A payout period refers to either a period during which financial returns from an investment or annuity are dispersed or the amount of time that an investment or project will take to break even.

In relation to financial returns, the payout refers to the amount of money a recipient receives at certain times (periods). During this time, investors will collect earnings or those receiving retirement funds will be paid the money they anticipate. Receiving such funds over a specified amount of time help both investors' and retirees' budgets and plans.

Payout period in relation to an investment or project is the time period when the company's cash flow is negative during the investment or project.