Insights
Payroll in the Dominican Republic: TSS, Income Tax and Salario de Navidad
Insights · By Chen ChunJie · Published 8 November 2026
Dominican payroll combines capped social security contributions with progressive income tax and two statutory bonuses. This guide sets out the 2026 rates, the bands, the bonuses and a worked example.
Last reviewed in November 2026 against Labour Code Law 16-92, Law 87-01, the February 2026 minimum wage resolution and DGII guidance. Rates change, so we confirm them for each engagement.
Social security in 2026
| Item | Employer | Employee | Cap |
|---|---|---|---|
| Pension (AFP) | 7.10% | 2.87% | 20 minimum wages |
| Family health (SFS) | 7.09% | 3.04% | 10 minimum wages |
| Occupational risk (SRL) | About 1.2% | None | 4 minimum wages |
| INFOTEP | 1% | 0.5% of profit-sharing | None |
Income tax bands for 2026
| Annual taxable income (RD$) | Rate |
|---|---|
| Up to 416,220 | 0% |
| 416,220 to 624,329 | 15% |
| 624,329 to 867,123 | 20% |
| Above 867,123 | 25% |
Employee pension and health contributions are deducted before tax. New bands are due from 2027.
Have a Dominican company and want payroll run every month? See Payroll Outsourcing in the Dominican Republic.
Worked example: RD$120,000 a month
| Line | RD$ |
|---|---|
| Gross salary | 120,000.00 |
| Employee AFP and SFS (5.91%) | 7,092.00 |
| Income tax | 16,809.87 |
| Net pay | 96,098.13 |
| Employer contributions (about 16.4%) | 19,680.00 |
| Salario de Navidad accrual | 10,000.00 |
Try other salaries in our Dominican Republic salary calculator.
Bonuses
The salario de Navidad is one-twelfth of ordinary pay earned in the year, paid by 20 December and tax-free up to five minimum wages. Employers also share 10% of net profits with staff, up to 45 or 60 days’ pay depending on service.
FAQ: payroll in the Dominican Republic
What are the TSS rates?
About 16.4% for the employer and 5.91% for the employee, within caps.
Is the salario de Navidad taxed?
No, up to five minimum wages.
What is the tax-free income in 2026?
RD$416,220 a year.
Is profit sharing mandatory?
Yes, 10% of net profits, within limits.
Hiring your first employee in the Dominican Republic?
Our Local Team employs the person, runs payroll with TSS, income tax and the salario de Navidad, and handles the paperwork, while you manage the day-to-day work.
Related
How we employ your team in the Dominican Republic.
Contracts, leave, termination and more.