Ex-dividend, record and payment dates explained
What the ex-dividend date, record date and payment date mean on the NZX and ASX, when you need to own shares to get a dividend, and why share prices drop on the ex-date.
Every dividend comes with a short set of dates. Get them wrong and you can buy a share expecting a dividend that never arrives, or sell a day too early and miss one. Here's what each date means on the NZX and ASX.
The four dates
| Date | What it means |
|---|---|
| Announcement date | The company declares the dividend: amount, imputation or franking level, and the other dates. |
| Ex-dividend date | From this day on, buyers don't get the dividend. You must own the shares before this date. |
| Record date | The company checks its share register to see who gets paid. |
| Payment date | The cash (or DRP shares) arrive. |
The rule to remember
Buy before the ex-dividend date to receive the dividend. Sell on or after the ex-dividend date and you still receive it.
Because NZX and ASX trades settle two business days after the trade (T+2), the ex-dividend date is normally one business day before the record date. Someone who buys on the ex-date won't be on the register by the record date, so the seller keeps the dividend.
Example
A company announces a 20-cent dividend with:
- Ex-dividend date: Thursday 12 March
- Record date: Friday 13 March
- Payment date: Friday 3 April
If you buy on Wednesday 11 March or earlier, you're entitled to the 20 cents. If you buy on Thursday 12 March, you're not. If you already own shares and sell them on Thursday 12 March, you still get paid on 3 April.
Why the share price drops on the ex-date
On the ex-dividend date, new buyers no longer get the dividend, so the shares are worth less to them. The price usually opens lower by roughly the dividend amount (sometimes a little more or less, depending on how investors value the imputation or franking credits and on that day's news).
That's why "buying just before the ex-date to collect the dividend" doesn't create free money. You receive the dividend, but the shares fall by about the same amount, and the dividend is taxable.
On charts, this shows up as a small gap down on the ex-date. Tasman Desk marks ex-dividend dates on its price charts so these drops aren't mistaken for bad news.
The record date
On the record date, the share registry (such as Computershare or MUFG Corporate Markets) takes a snapshot of shareholders. If you hold shares through a platform's custodian, the custodian is on the register and passes the dividend on to you.
The payment date
Payments usually arrive two to four weeks after the record date, by direct credit to the bank account on file with the registry or your platform. Australian dividends to New Zealand investors may arrive in Australian dollars or be converted, depending on your platform and registry settings.
Dividend reinvestment plans (DRPs)
Many companies let shareholders take new shares instead of cash. DRP shares are often issued at a small discount to the market price. Things to know:
- There's usually an election date shortly after the record date. Change your preference before then.
- DRP shares are still a taxable dividend, even though you receive no cash. Imputation credits and resident withholding tax still apply.
- Some platforms that hold shares through a custodian don't support every company's DRP.
Special dividends and capital returns
A special dividend is a one-off payment, often after selling an asset or a strong year. A capital return gives money back to shareholders out of capital rather than profit and is often treated differently for tax. Both use the same ex-date mechanics.
Where to find upcoming dividend dates
- The company's dividend announcement on the NZX or ASX announcements page. See how to read company announcements.
- Company investor relations pages.
- Dividend calendars. Tasman Desk includes a four-month calendar of ex-dividend and payment dates across tracked NZX and ASX companies, with estimates of the income each holding will pay.
Frequently asked questions
When do I need to buy shares to get the dividend?
You need to buy before the ex-dividend date. If you buy on or after the ex-dividend date, the seller receives the dividend instead.
If I sell on the ex-dividend date, do I still get the dividend?
Yes. If you owned the shares at the close of trading on the day before the ex-dividend date, you're entitled to the dividend even if you sell on the ex-date.
Why did my share price fall on the ex-dividend date?
New buyers no longer receive the upcoming dividend, so the share price usually drops by about the dividend amount at the open. It's expected and doesn't mean anything has gone wrong with the company.
What is the difference between the ex-date and the record date?
The ex-date is the first day shares trade without the dividend. The record date is when the registry checks who owns the shares. With T+2 settlement, the ex-date is normally one business day before the record date.
Is a reinvested dividend taxed?
Yes. Dividends taken as new shares through a DRP are taxed the same way as cash dividends, including imputation or franking credits.
This guide is general information, not financial or tax advice. Rules and market hours change; check the exchange, IRD or ATO, or a licensed adviser for your situation.