35% of the block reward is paid to masternodes.
Masternodes are selected for payment in each block (approximately every 5 minutes) from a deterministic masternode list, and moved to the back of the list after payment. As more masternodes are created, the duration between payments increases. If the collateral behind a masternode is spent, or if a masternode stops providing services to the network for more than one hour, it is removed from the list until normal service resumes. In this way, masternodes are given incentive to provide efficient and reliable services to the network.
The frequency of the block payout depend on how many active Masternodes there are. The more masternodes there are, the longer it takes to receive the masternode block reward.