Introduction to Payroll in Dominican Republic
If you're going to hire a remote worker in the Dominican Republic, you'll need to be aware of the local labor laws to guarantee that your payments are made on time, accurately, and in accordance with the law. Local tax laws can be tricky without an in-country legal team to make sure you're compliant with complex legislation which may change at any time.
Skuad, a reputable payroll business in the Dominican Republic, can keep track and take care of:
- Your employee salary compensation and benefits
- Employer and employee contributions to social security and healthcare
- Leave entitlements for holidays and vacations
- Payroll taxes in Dominican Republic
- Payroll compliance in Dominican Republic
If you’re looking to build your remote team, get help from Skuad for payroll solutions in the Dominican Republic.
Payroll Process in the Dominican Republic
There are three main phases of payroll. The process is pre-payroll, payroll calculation, and the post-payroll phase.
Gather employee documentation, clearly communicate your policies, and prepare to pay employees.
Setting up the organization
Leave and attendance policies should be set, as well as salary payment frequency. Be sure to have all employees sign copies of your policies and employment contracts.
Your firm should have a registered business number, which is required to send out tax forms and payslips.
You may have remote employees throughout the Dominican Republic. Each workplace can have its own set of policies and they may differ from the policies of other regions within the country.
Your workers are statutorily entitled to some leave, such as maternity leave, paid sick days, vacations, and national holidays. Make sure these policies are well-communicated and your workers are all on board with the policies.
Here, timesheets are documented, doctor’s notes for sick leave are recorded, and requests to supervisors for personal time off are collected and recorded, all within your attendance policies. Biometric devices keep a digital record of hours employees work.
Some payroll components are due to employees by law, such as benefits.
Payroll outsourcing in Dominican Republic is possible with the help of Skuad, which will ensure you are within Dominican Republic’s labor legislation.
Employees in Dominican Republic get paid every month, usually on the last day of the month. Some companies pay bi-weekly.
Employee information, such as department and job titles, is collected and recorded.
Payroll Calculation Phase
The main component of payroll in Dominican Republic is the main payroll calculation phase. Information from the pre-payroll phase is put into a system to calculate every employee's paycheck. The result is salary after all deductions, taxes, and withholding.
This is when employees are paid. After calculations are made and complete, send the bank advice for salary disbursement.
Make sure to balance the accounts and keep track of payroll spent after paychecks have been sent.
Payroll reporting and compliance
Deductions such as employee and employer contributions to pension and family health insurance are withdrawn and sent to the respective government agency by due dates. For compliant payroll services in the Dominican Republic, get a Skuad demo today.
Payroll Processing in Dominican Republic
If you’re looking for payroll outsourcing in Dominican Republic, contact Skuad to get help and make payroll processing simple and easy.
Payroll Processing Company In Dominican Republic
Concentrate on growing your business, and let Skuad take care of payroll for you. Contact us today to see a demo of how it works.
Payroll Management in Dominican Republic
Payroll administration means keeping correct payroll records, paying employees properly and timely, issuing pay slips, and adhering to local labor laws. Skuad, a Dominican Republic payroll service, can automate payroll to ensure your employees are paid on time.
Payroll Compliance in Dominican Republic
Making sure you comply with labor laws involving benefits, taxes, leave entitlements, and other legislation is an important part of the payroll management process. All of the compliance is taken care of when you work with a payroll business in the Dominican Republic like Skuad.
Payroll Components in Dominican Republic
If you work with a Dominican Republic payroll outsourcing company, you can be sure that all of the following elements will be handled for you:
The Dominican Republic minimum wage is based on the size of the company, and in some cases, the role of the worker.
One Dominican peso (RD$ or DOP) is US $0.018.
- Minimum monthly salary 21,000 pesos for large companies with annual revenue of 202,000,000 pesos, or with 150 employees or more.
- Minimum monthly salary of 19,250 for medium-sized companies with annual revenues of 54,000,000 pesos to 202,000,000 pesos, or have between 51 and 150 employees.
- Minimum monthly salary of 12,000 for small companies that have annual revenues between 8,000,000 pesos and 54,000,000 pesos, or that have 11 to 50 employees.
- Minimum monthly salary of 11,900 for micro-businesses with yearly revenue up to 8,000,000 pesos, or who have up to 10 employees.
- Farm workers must be paid at least 500 pesos per day.
- Security guards must be paid at least 17,250 pesos per month.
- Sugar industry workers must be paid at least 7633.42 pesos per month.
- Heavy machinery operators in the agricultural industry must be paid 11,109 pesos per month.
A 13th-month salary, or Christmas bonus, is usually given annually.
The working week in Dominican Republic is generally no more than 44 hours per week and eight hours per day. Most workers work Monday to Friday and a half-day Saturday. One hour of break is mandatory for each employee working at least a six-hour shift. A weekly rest period of 36 continuous hours must be given to employees not in a managerial position, typically starting at noon on Saturday.
All hours worked above and beyond the normal working hours of 44 hours per week are considered overtime, which must be paid at 135% of regular wages. Hours exceeding 68 per week must be paid at 200% regular pay. Night hours, between 9 p.m. and 7 a.m., must be paid an additional 15%. Managers and company directors are not entitled to overtime pay.
Employers and employees must pay for pension, family health insurance/social security, labor risk insurance, and technical education.
Employers must pay:
- 7.1% for pension
- 7.09% for health insurance
- 1.2% for labor risk
- 1% for technical education
Employees must pay:
- 2.87% for pensions
- 3.04% for health insurance
- 0.5% for technical education
The Social Security Treasury pays employees for some of the sick time off over four days. Other types of leave are bereavement leave for the death of an immediate family member, and marriage days of five days for a wedding for employees getting married.
Maternity leave is for 14 weeks beginning at least 7 weeks before delivery. Fathers can take two days off for paternity leave.
There are 12 public holidays in a year in Dominican Republic for which employees must be given paid time off. If an employee must work on a holiday, they are to be paid double pay.
Employees who have worked for the company for at least one year are entitled to 14 days off per year. After five years at the company, another four days off is given.
Public holidays in Dominican Republic:
- New Year’s Day
- Three Kings Day
- Our Lady of Altagracia
- Juan Pablo Duarte
- National Independence Day
- Good Friday
- Labor Day
- Corpus Christi
- Restoration Day
- Our Lady of Mercedes Day
- Constitution Day
- Christmas Day
Payroll Taxes in Dominican Republic
Payroll tax in Dominican Republic is a big part of payroll costs. The Dominican Republic corporate tax rate is a flat tax rate of 28%.
For employees, the income tax rate in Dominican Republic is a progressive rate based on brackets of income.
Annual earnings in Dominican pesos and tax rate. One Dominican Republic peso is equivalent to US $0.018.
- Up to 416,220 DOP: 0%
- 416,220 - 624,329 DOP: 15%
- 624,329 - 867,123 DOP: 20%
- Over 867,123 DOP: 25%
If an employee is terminated for just cause, they must be given notice between seven days and 28 days’ notice. Those workers dismissed with just cause are not entitled to severance pay. Any worker dismissed at the employer’s discretion is owed some severance pay depending on how long they worked at the company.
- 7 days’ notice must be given if the employee worked between three to six months.
- 14 days’ notice must be given if the employee worked between six months to a year.
- 28 days’ notice must be given if the employee worked over a year at the company.
Using a payroll company in Dominican Republic can help you with all of these payroll components.
With the correct payroll system in place, paying workers in the Dominican Republic could be easy. Contact Skuad and request a demo now if you're ready to hire someone remotely, build your remote team, and pay them with easy one-click payroll services while complying with labor laws.