Use 'pay out' when referring to a large sum of money being paid, often as a reward or settlement. The game show promised to pay out a million dollars to the winner.
Pro Tip 2/3
Not Always Willing
'Pay out' can imply reluctance or obligation to give money, not always done voluntarily. The company had to pay out damages after the court ruling.
Pro Tip 3/3
Context Matters
In financial contexts, 'pay out' often relates to dividends or insurance claims. Investors were pleased when the company decided to pay out generous dividends.