Definition of pay out

The phrase "pay out" originated in the mid-19th century in the context of finance. It referred to the process of making a payment, specifically when a company was distributing dividends or interest to its shareholders or bondholders. "Pay out" was used to indicate that the company was fulfilling its financial obligation to its investors. Over time, the meaning of "pay out" broadened to include any situation where money or other resources are disbursed, such as in compensation for work, in settlement of a debt, or in payment of a claim. In these contexts, "pay out" comes to mean "reimburse" or "compensate" in describing the transfer of money or other resources from one person or entity to another. Today, "pay out" is commonly used both in financial and non-financial contexts. While its origins lie in the world of finance, its widespread usage demonstrates the versatility of English, where words and phrases can evolve and take on new meanings over time.