"Paid" vs "payed"

I think I have always used these two words interchangeably without noticing until my professor was saying how some students misspelled the word and he was amazed.

Can someone tell me when I should use paid over payed?

I searched for a similar question and got even more confused with this title: you paid for a persons drink and expect to be payed back.

Paid or payed is the past tense of pay depending on the sense of pay. The first sense is the usual one of giving someone money while the second sense is to seal (the deck or seams of a wooden ship) with pitch or tar to prevent leakage.

You should almost always use paid.

If you’re talking about money, or anything else that’s literally or figuratively acting like a transaction, then it’s paid: “Jane paid me ten dollars”, or “John played a practical joke on me, but I paid him back with a worse one!”

It’s only if you’re sailing, and dealing with ropes, that payed can be the correct form — “The skipper payed out the rope”, and similar.