Dividends explained — how to earn money from dividends in Poland

Definition

A dividend is a portion of a joint-stock company's net profit that the general meeting of shareholders decides to pay out to share holders. It's a form of direct compensation for owning shares in the company.

How do dividends work?

1. Company achieves net profit for the fiscal year
2. Management proposes profit distribution (how much for dividend, how much to retain)
3. General meeting of shareholders approves the proposal
4. Record date is set — whoever owns shares on this day will receive the payout
5. On payment date money arrives in your brokerage account

Key concepts

Dividend yield

Annual dividend per share divided by share price × 100%. Allows comparing the "income yield" of different companies.

Example: Share costs 100 PLN, dividend is 5 PLN → dividend yield = 5%.

Payout ratio

Percentage of profit allocated to dividend. Too high (>80%) may signal that the company isn't investing enough in growth.

Ex-dividend date

The first day when buying the share no longer entitles you to the current dividend. The stock price usually falls by the dividend amount.

Dividends and taxes

Dividends are subject to 19% capital gains tax (podatek Belki). The brokerage automatically deducts it. By investing through IKE, you can avoid this tax.

For foreign dividends the situation is more complex — often withholding tax is collected in the company's home country.

Dividends and FIRE

A dividend portfolio is one strategy for generating passive income during FIRE. Regular dividend payments can cover part or all of living expenses without the need to sell shares.

How Freenance can help

Freenance tracks dividends received from your investments and includes them in passive income calculations. You can see how much you earn from dividends and how close you are to financial independence.

👉 Track your dividends — freenance.io