An employer of record in the Dominican Republic is a local entity that legally employs your hire under the Dominican Labor Code when you have no entity in the country. The provider runs payroll in pesos, remits social security to the TSS, pays the statutory Christmas salary and carries the termination liabilities the Code attaches to every employer, while you direct the work. Dominican employment costs are dominated by items that sit outside gross salary, so a quote built on salary plus fee alone understates the real monthly cost. Nothing here is legal advice; the Labor Code and the contract control.
The statutory frame: Labor Code, Christmas salary and profit sharing
Dominican employment sits on Law 16-92 of 1992, the Labor Code, which fixes the floor of rights for every employee. Three recurring costs stand out for a foreign buyer. The Christmas salary is a mandatory extra payment equal to one twelfth of the ordinary salary earned in the year, subject to a statutory cap. Paid vacation runs at 14 working days once service passes a year, rising to 18 days after five years. And employers must share 10% of annual net profits with workers, capped at 45 days of salary for staff with under three years of service and 60 days beyond that. An EOR's invoice should show how each of these accrues; a provider that surfaces them only when they fall due is deferring cost, not removing it.
Termination: desahucio notice and the cesantia scale
The Code lets either party end the relationship without cause through desahucio, but the employer pays for the privilege on a published scale. Notice runs from seven days after three months of service, to 14 days after six months, to 28 days after a year. Severance, the cesantia, scales with tenure: six days of salary for three to six months of service, 13 days for six to twelve months, 21 days per year served between one and five years, and 23 days per year beyond five years. Because cesantia accrues per year served, the cost of exit grows with every anniversary, and a buyer should treat it as an accruing liability from day one rather than a surprise at separation. Ask the EOR whether it reserves for cesantia or bills it at exit.
The TSS cost stack above gross salary
Employer social security contributions to the Dominican system run through the TSS and sit on top of gross pay: around 7.1% to the pension system (AFP), around 7.09% to family health insurance (SFS) and 1.25% for occupational risk insurance, with up to an additional 0.6% depending on the risk level of the work, a minimum stack in the region of 15% of salary before the Christmas salary, vacation and profit-sharing accruals are counted. Contribution ceilings apply per branch and are adjusted over time, so the effective rate on higher salaries is lower than the headline. Working time is capped at 8 hours a day and 44 hours a week for standard schedules.
What to check in a Dominican EOR provider
Confirm the provider employs through its own Dominican entity registered with the TSS, and ask for a full-cost illustration for your actual salary: gross pay, employer TSS lines, Christmas salary accrual, vacation accrual, profit-sharing exposure and the cesantia liability at one, three and five years. Ask how desahucio is executed in practice, since notice and severance are owed in the statutory amounts regardless of what the buyer's home-country practice would be. Finally check the currency and transfer arrangements; salaries are paid in pesos and the exchange margin a provider applies is part of the true fee.
Questions people ask about employer of record dominican republic
What severance is owed in the Dominican Republic?
For termination without cause, cesantia runs on a statutory scale: six days of salary for three to six months of service, 13 days for six to twelve months, 21 days per year for one to five years, and 23 days per year over five years, plus notice of up to 28 days depending on tenure.
What is the Christmas salary?
A mandatory thirteenth payment equal to one twelfth of the ordinary salary earned during the year, paid in December and subject to a statutory cap, owed to employees regardless of performance.
What do employer social contributions cost?
Employer TSS contributions total a minimum of roughly 15% of salary across pensions, family health insurance and occupational risk, with ceilings per branch, before the Christmas salary, vacation and profit-sharing accruals are added.
Does an EOR remove these obligations?
No, it carries them for you. The EOR is the legal employer under the Labor Code and owes the same notice, cesantia, Christmas salary and TSS contributions any Dominican employer owes; its fee prices that risk and administration.