diff --git a/transformer_engine/jax/permutation.py b/transformer_engine/jax/permutation.py
index 405d5f7661..438511fa55 100644
--- a/transformer_engine/jax/permutation.py
+++ b/transformer_engine/jax/permutation.py
@@ -52,7 +52,7 @@ def token_dispatch(
     Optional[jnp.ndarray],
     jnp.ndarray,
     Optional[jnp.ndarray],
-    Optional[jnp.ndarray],
+    jnp.ndarray,
 ]:
     """
     Dispatch tokens to experts based on routing map.
@@ -101,9 +101,11 @@ def token_dispatch(
     pad_offsets : Optional[jnp.ndarray]
         Per-expert cumulative padding offsets of shape [num_experts] when using padding,
         None otherwise. Pass this to token_combine when unpadding is needed.
-    target_tokens_per_expert : Optional[jnp.ndarray]
-        Aligned token counts per expert of shape [num_experts] when using padding,
-        None otherwise.
+    tokens_per_expert : jnp.ndarray
+        Token counts per expert of shape [num_experts]:
+        - Without padding: actual token counts (sum of routing_map columns)
+        - With padding: aligned token counts (ceil(actual / align_size) * align_size)
+        This gives the effective number of tokens per expert in the output buffer.
 
     Note
     ----
@@ -151,10 +153,10 @@ def _token_dispatch(
     Optional[jnp.ndarray],
     jnp.ndarray,
     Optional[jnp.ndarray],
-    Optional[jnp.ndarray],
+    jnp.ndarray,
 ]:
     """Internal token_dispatch with custom VJP."""
-    (output, permuted_probs, row_id_map, pad_offsets, target_tokens_per_expert), _ = (
+    (output, permuted_probs, row_id_map, pad_offsets, tokens_per_expert), _ = (
         _token_dispatch_fwd_rule(
             inp,
             routing_map,
@@ -165,7 +167,7 @@ def _token_dispatch(
             use_padding,
         )
     )
-    return output, permuted_probs, row_id_map, pad_offsets, target_tokens_per_expert
+    return output, permuted_probs, row_id_map, pad_offsets, tokens_per_expert
 
 
 def _token_dispatch_fwd_rule(
@@ -182,7 +184,7 @@ def _token_dispatch_fwd_rule(
         Optional[jnp.ndarray],
         jnp.ndarray,
         Optional[jnp.ndarray],
-        Optional[jnp.ndarray],
+        jnp.ndarray,
     ],
     Tuple[jnp.ndarray, Optional[jnp.ndarray], int, int, int, bool],
 ]:
@@ -212,11 +214,11 @@ def _token_dispatch_fwd_rule(
 
     with_probs = probs is not None
 
-    if use_padding:
-        # Compute tokens_per_expert internally from routing_map
-        # This can be a traced value since output shape uses worst_case_out_tokens
-        tokens_per_expert = jnp.sum(routing_map, axis=0).astype(jnp.int32)
+    # Compute tokens_per_expert from routing_map (actual counts)
+    # This is well-optimized by XLA as a simple column-wise reduction
+    tokens_per_expert = jnp.sum(routing_map, axis=0).astype(jnp.int32)
 
+    if use_padding:
         # Calculate aligned token counts per expert
         target_tokens_per_expert = (jnp.ceil(tokens_per_expert / align_size) * align_size).astype(
             jnp.int32
@@ -242,10 +244,12 @@ def _token_dispatch_fwd_rule(
             hidden_size,
             align_size=align_size,
         )
+
+        # Return aligned counts when using padding
+        out_tokens_per_expert = target_tokens_per_expert
     else:
         # No padding
         pad_offsets = None
-        target_tokens_per_expert = None
 
         output, permuted_probs = permute_with_mask_map(
             inp,
@@ -257,14 +261,20 @@ def _token_dispatch_fwd_rule(
             hidden_size,
         )
 
+        # Return actual counts when not using padding
+        out_tokens_per_expert = tokens_per_expert
+
     # Return (primals, residuals)
+    # out_tokens_per_expert is:
+    #   - target_tokens_per_expert (aligned) when using padding
+    #   - tokens_per_expert (actual) when not using padding
     residuals = (row_id_map, pad_offsets, num_tokens, num_experts, hidden_size, with_probs)
     return (
         output,
         permuted_probs,
         row_id_map,
         pad_offsets,
-        target_tokens_per_expert,
+        out_tokens_per_expert,
     ), residuals