Explainer · Dividends & Income
Ex-dividend date, record date and payment date explained
Every cash dividend comes with a short calendar of dates. One of them, the ex-dividend date, decides whether the next payment goes to you or to the person who sold you the shares.
Quick answer
The ex-dividend date is the cutoff for the next dividend. Buy before it and the dividend is yours; buy on or after it and the seller gets it [2]. For stocks, the ex-dividend date is usually the record date itself [2] [3].
Key points
- A dividend has four dates: declaration, ex-dividend, record and payment [2].
- Buy before the ex-dividend date to receive the next dividend; buying on that date or later means the seller receives it [2].
- Under FINRA's rule, amended effective May 28, 2024, the ex-dividend date is usually the record date itself [3].
- With a significant dividend, the share price may fall by about that amount on the ex-dividend date, so the payment is not free money [2].
- Holding the shares long enough around the ex-dividend date can decide whether the dividend counts as qualified for tax [7].
On this page
What are the four dividend dates?#
A company that pays a dividend does not simply send money on a random day. The board declares the payment first; under Delaware law, for example, it is the directors who may declare and pay dividends [1]. That announcement sets the rest of the calendar.
When a company declares a dividend, it sets a record date: the day you must be on the company's books as a shareholder to receive it [2]. The ex-dividend date is the trading cutoff tied to that record date, and the payable date is when the cash actually arrives [2]. The SEC's investor site walks through all four with one example, shown in the table below.
The four dates in the SEC's example for a company it calls XYZ, with what each one means for you:
| Date | Example (Investor.gov) | What it means for you |
|---|---|---|
| Declaration date | Monday, March 2, 2026 | The company announces the amount and the other dates. |
| Ex-dividend date | Monday, March 16, 2026 | Buy on or after this day and the seller gets this dividend. |
| Record date | Monday, March 16, 2026 | You must be on the company's books as a shareholder. |
| Payable date | Tuesday, March 17, 2026 | The dividend is paid to shareholders of record. |
Dates from the Investor.gov example [2].
How is the ex-dividend date set?#
For ordinary dividends, FINRA Rule 11140 makes the ex-dividend date the record date when the record date falls on a business day, or the first business day before it otherwise [3]. The SEC's investor site describes the same practice: the ex-dividend date for stocks is usually the record date, or one business day before if the record date is not a business day [2].
FINRA amended the rule effective May 28, 2024 [3], as part of changes made to conform its rules to the SEC's move to T+1 settlement [4]. Under T+1, most trades settle one business day after the trade date [5]. Settlement is when the shares officially reach the buyer's account [5]. Guides written before May 2024 may describe the dates differently, so check when a guide was written [4].
The exchange also gets advance warning: the NYSE requires its listed companies to notify it at least 10 calendar days before every record date [6]. You can find them in the company's dividend announcement or on the dividend section of a stock quote page; our guide to how dividends work covers the announcement itself.
When do you need to buy to get the dividend?#
The rule is short. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend; the seller gets it. If you purchase before the ex-dividend date, you get it [2]. The IRS uses the same idea in its own definition: the ex-dividend date is the first date after a dividend is declared on which a buyer is not entitled to the next payment [7].
Selling works the other way round. If you sell on the ex-dividend date or later, you still receive the dividend, because you owned the shares going into the cutoff [2].
- Find the ex-dividend date
Read it from the company's dividend announcement or the dividend section of the quote page. Note the payable date as well.
- Count back one business day
In the Investor.gov example the ex-date is Monday, March 16, 2026, so the last day to buy is Friday, March 13, 2026 [2].
- Make sure your order fills in time
A limit order that does not fill until the ex-date misses the dividend. Check the trade date on your confirmation.
- Wait for the payable date
The broker credits the dividend to your account when the company pays it [8].
What happens to the share price on the ex-dividend date?#
Think about what a buyer gets. Before the ex-date, a share comes with the upcoming dividend attached; from the ex-date on, it does not. The SEC's investor site notes that with a significant dividend, the price of a stock may fall by that amount on the ex-dividend date [2]. It says may: on any given day the price also moves for other reasons, so you will rarely see an exact drop.
Brokers also adjust some open orders on the ex-date. Under FINRA Rule 5330, a firm holding an open order to buy, or an open stop order to sell, reduces the order price by the cash dividend on the ex-date, unless the order is marked "Do Not Reduce" [9]. Open sell orders and stop orders to buy are not adjusted [9]. If you left a buy limit order sitting at $40.00, do not be surprised to see it at a lower price on the ex-date.
What changes for very large dividends and stock dividends?#
Very large payments follow a different rule. When a cash dividend, stock dividend, split or other distribution is 25 percent or more of the value of the security, FINRA Rule 11140 sets the ex-dividend date as the first business day after the payable date [3]. Investor.gov puts it simply: the ex-dividend date is deferred until one business day after the dividend is paid [2].
For example, a hypothetical $10.00 special dividend on a $36.00 stock is 27.78% of the price (calculated), above the 25% line, so the usual record-date rule would not apply.
A dividend can also be paid in shares rather than cash. For a stock dividend, Investor.gov says the ex-dividend date is the first business day after the stock dividend is paid, which is also after the record date [2]. FINRA Rule 11140, however, applies the record-date rule to stock dividends and splits under 25% of the security's value [3], so take the date from the company's announcement rather than assuming.
Do the dividend dates affect how the dividend is taxed?#
They can. Ordinary dividends are taxed as ordinary income, while qualified dividends are taxed at the lower capital gain rates [11]. One condition is a holding period counted from the ex-dividend date: dividends on shares held for less than 61 days during the 121-day period that began 60 days before the ex-dividend date are not reported as qualified [7].
With the Investor.gov ex-date of Monday, March 16, 2026, that 121-day window runs from Thursday, January 15, 2026 to Friday, May 15, 2026 (calculated). Buy the day before the ex-date and sell a week later, and that dividend would not meet the test. Our explainer on capital gains covers how the lower rates work. This is general information, not tax advice.
Mistakes beginners make with ex-dividend dates#
- Buying on the ex-date and expecting the dividend
The ex-date is the first day you do not get it. The last day to buy is the business day before [2].
- Reading the yield as a promise
A quoted yield is built from past or announced payments. The company can cut the next one [10]. See dividend yield explained.
Frequently asked questions#
If I sell on the ex-dividend date, do I still get the dividend?
Yes. Buyers on or after the ex-dividend date do not receive the next dividend; the seller does [2]. So if you owned the shares before the ex-date and sell on it, the payment comes to you on the payable date.
Is the ex-dividend date the same as the record date?
Why did my open order change price on the ex-dividend date?
FINRA Rule 5330 requires firms to reduce the price of an open buy order or sell stop order by the cash dividend on the ex-date, unless you marked the order "Do Not Reduce". Open sell orders are not adjusted [9].
Can I get the dividend if I buy on the payable date?
No. The payable date comes after the ex-dividend date, and anyone who buys on or after the ex-date does not receive that dividend [2].
The bottom line#
Find the ex-dividend date, buy at least one business day before it if you want the next payment, and expect the share price to reflect the dividend once the cutoff passes. Large and stock dividends follow their own timing, and holding periods around the ex-date matter for tax. Use the dividend yield calculator to see what a payment means in yearly income, and read the risk disclosure before buying any stock for its dividend.
Sources
- Title 8, Chapter 1, Subchapter V. Stock and Dividends.
- Ex-Dividend Dates: When Are You Entitled to Stock and Cash Dividends.
- 11140. Transactions in Securities Ex-Dividend, Ex-Rights or Ex-Warrants.
- Regulatory Notice 24-04: FINRA Adopts Amendments to Conform its Rules to the T+1 Settlement Cycle.
- New "T+1" Settlement Cycle - What Investors Need To Know: Investor Bulletin.
- 2025 Listed Company Compliance Guidance Memo.
- Instructions for Form 1099-DIV (01/2024).
- Investor Bulletin: Holding Your Securities | Investor.gov.
- 5330. Adjustment of Orders.
- Stocks.
- Topic no. 404, Dividends and other corporate distributions.
Education only. This page is not investment, tax or legal advice. Stocks can lose value. See our risk disclosure.
