The Dominican Republic payroll and benefits guide

What global businesses need to know about payroll in Dominican Republic

The Dominican Republic makes up the eastern portion of the island of Hispaniola, discovered by Christopher Columbus on his famous voyage in search of the New World in 1492. Many of Columbus’s fellow conquistadors found gold on the island, and took it back across the Atlantic to Spain. And while we can’t promise you’ll strike gold in today’s Dominican Republic — although its Pueblo Viejo gold mine that opened in 2012 is the largest in Latin America — you certainly stand a chance of making a success of your business venture there.

The Dominican Republic is a real economic success story in the Caribbean, and its GDP almost doubled in a decade between 2014 and 2024. This has been driven by a diverse array of exports, from gold and silver, to coffee and sugar, around half of which go north to the United States. But over 60% of its economy is service-based, with more than 11% coming from tourism: the country received around eight million visitors in 2024 (a number that is increasing year on year).

If you plan on expanding into the Dominican Republic, there are a few payroll and employment complexities to be aware of. For example, the minimum wage rate applicable to your workforce will depend on the size of your company, and there are strict rules in place around how many foreign workers you can hire. Read on to get the facts on these, and everything else you need to know about running payroll in the Dominican Republic.

Getting Started

As in many other Spanish-speaking countries, the two most common types of foreign business entities are the limited liability company (S.R.L) and the joint-stock company (S.A.). The latter is only really appropriate for larger companies as the minimum capital requirement is 30 million Dominican pesos (approximately £366,000; $489,000; €424,000), whereas the capital requirement for an S.R.L. is only DOP 100,000 (approximately £1,220; $1,630; €1,410).

The set-up process starts by finding and registering an available company name with the National Office of Industrial Property. Within ten days, the company’s name should be published in the register, after which the company’s constitution and by-laws can be drafted, signed, and approved.

Then, any relevant taxes and fees can be paid, a tax identification number can be obtained from the Internal Revenue Service, and the company can be registered with the National Taxpayers Registry, and the local Chamber of Commerce. Registration with the Department of Labor and with Social Security (CNSS), and obtaining any industry-specific licenses and permits, completes the process.

Much of this can be completed online and is relatively straightforward, and an in-country bank account (while not mandatory) makes things much easier. However, accessing expertise is essential, partly because any documents not in Spanish will need to be translated, and partly because local lawyers and other professionals can help clear any obstacles along the way.

Employment Considerations

The Dominican Republic is strong on employee rights. Union activity is common, and strikes may be held if workers feel their employers are not treating them fairly. Strikes must be coordinated with the Ministry of Labor at least ten days in advance. Verbal and written contracts are both permissible.

Some industries such as construction and agriculture have used extensive numbers of workers from neighboring (and much poorer) Haiti. To restrict this, there is a law that requires at least 80% of every business’s workforce to be Dominican, and Dominicans collectively must earn at least 80% of the total wages paid by the company (excluding management and technical staff wages). Foreign workers are required to have a short-stay permit or temporary residency, which will typically cover about a year.

The normal working hours are eight per day and 44 per week. Overtime is limited to 240 hours per year, and employees should not work more than 11 hours in total on any one day. Overtime is paid at 135% for the first 68 extra hours each year, at 150% thereafter, and at 200% for work on Sundays or at night. Managers and some senior executives are exempt from overtime regulations and pay scales.

Probation periods can run for a maximum of three months and should be agreed in employment contracts. Notice periods start at zero, rising to seven days after three months’ service, 14 days after six months, and 28 days after a year.

Compensation, Bonuses and Severance

Unusually, the minimum wage in the Dominican Republic varies, depending on the value of the employer, and the latest rate rises took effect on February 1 2026. There are four different bands, and employers are separated by how many employees they have or the size of their turnover:

Large enterprise (headcount of 151 employees or more, or turnover greater than DOP 202 million): minimum wage of DOP 29,988 per month (approx. £365; $490; €425)
Medium enterprise (headcount of 51-150 employees, or turnover greater than DOP 54 million): minimum wage of DOP 27,489.60 per month (approx. £335; $450; €390)
Small enterprise (headcount of 11-50 employees, or turnover greater than DOP 8 million): minimum wage of DOP 18,421.20 per month (approx. £225; $300; €260)
Micro-enterprise (headcount of ten employees or less, and turnover below DOP 8 million): minimum wage of DOP 16,993.20 per month (approx. £205; $275; €240)

Employees are also entitled to a 13^th-month bonus, as is customary in most Latin American countries. This is a full month’s salary which should be paid no later than December 20 (i.e. just in time for Christmas), and is exempt from taxation.

On top of that, all employers are legally required to share 10% of their pre-tax profits with their workforce. Payments to individual employees are capped at 45 days’ salary if they have less than three years’ service, and 60 days if they have more than this. Payments should be made within three months of the end of the financial year in question (which in the Dominican Republic, runs to the calendar year).

Severance pay rates start at six days’ salary after three months of service, rising to 13 days after six months, 21 days per year of service after one year, and 23 days per year of service after five years. Payment must be made within ten days of the employee being notified that their employment is being terminated.

Tax and Social Security in Dominican Republic

Income tax in the Dominican Republic is levied on a progressive scale, and is withheld at the source by the employer. Rates have remained unchanged for a few years now, but it’s worth remaining vigilant to any potential alteration in the future.

The first DOP 416,220 earned per year (approx. £5,080; $6,780; €5,890) is exempt, after which three bandings apply:

Beyond DOP 416,220 up to DOP 624,329 (approx. £7,600; $10,200; €8,800): 15%
Beyond this up to DOP 867,123 (approx. £10,600; $14,100; €12,300): 20%
Beyond DOP 867,123: 25%

The corporation tax rate is 27%. VAT is levied at 18%, with exemptions applicable to certain goods and services, including sales to Free Trade Zones and exports.

There are four types of social security contributions; employers should withhold employee contributions and remit them to the relevant authorities along with their own:

Pension: 7.1% employer (up to a maximum of DOP 269,640), 2.87% employee
Health insurance: 7.09% employer (up to a maximum of DOP 134,820), 3.04% employee
Labor risk insurance: 1.2% employer (up to a maximum of DOP 53,928)
Technical education contribution: 1% employer, 0.5% employee

Holidays and Leave

Paid leave entitlement in the Dominican Republic is relatively low: employees get 14 working days off after one year of service, rising to 18 days after five years. Employees are also required to take their time off in blocks of at least a week in duration. However, employees are entitled to receive their full salary for their time off before it begins. They’re also paid for the 12 days of public holidays each year, although holidays that fall at weekends don’t normally generate weekdays off in lieu.

Paid sick leave runs for a maximum of 26 weeks per year, and is paid by social security at 60% of regular salary, as long as they have made at least one year of social security contributions.

Maternity leave entitlement is 14 weeks, split evenly either side of the due date. Mothers receive full pay during this time, with employers and social security paying 50% each. When mothers return to work, they have the right to three additional 20-minute breaks each day for breastfeeding. Paternity leave is two days, paid at full salary by employers.

There are also paid leave entitlements for a family bereavement (three days) or for getting married (five days).

Payroll in Dominican Republic: a summary

There are some important differences between the payroll and employment requirements in the Dominican Republic, and those found in most other Latin American countries. Its rules around minimum wage rates and profit sharing are unusual, and international businesses should be particularly careful not to breach the ‘80/20 rule’ around hiring foreign workers. If you’re expanding into the Dominican Republic, the best way to stay on the front foot from a payroll perspective is to partner with a global payroll partner, especially one that can connect you to local payroll experts there.

This article is for informational purposes only and not intended to convey or constitute legal or any other advice. It is not a substitute for advice from a qualified professional.