Countries › Dominican Republic › Guide › 16. What is normal abroad but not here › Mandatory profit sharing

Mandatory profit sharing

Last verified: 2026-10-30 · Status: Stable

Abroad profit sharing is a voluntary plan; here every company must share 10% of annual net profit with its indefinite staff. Each person is capped at 45 days of ordinary salary below three years of service and 60 days after that. Payment falls between 90 and 120 days after year end; free zones and some new or farm businesses are exempt.

USD figures use the Banco Central de la República Dominicana reference selling rate of RD$60.9007 per US dollar for 29 October 2026, the latest row in its published rate file on the verification date, rounded to the cent.

Key facts

Profit share pool	10 % of net annual profitLey 16-92 art. 223, as of 2026-10-30 · in force
Individual cap, under three years	45 days of salaryLey 16-92 art. 223, as of 2026-10-30 · in force
Individual cap, three years or more	60 days of salaryLey 16-92 art. 223, as of 2026-10-30 · in force
Latest payment window after year end	90 to 120 daysLey 16-92 art. 224, as of 2026-10-30 · in force

The rule

1. Every company must give all indefinite workers a share of 10% of net annual profits.
Cost to do it: Up to 10% of net annual profit, limited by the individual caps.Ley 16-92, Código de Trabajo, art. 223, 1992-05-29 official text · verified 2026-10-30

2. Each worker's share cannot exceed 45 days of ordinary salary with under three years of service, or 60 days with three or more. Part year workers get a share in proportion to salary for the time worked.Ley 16-92, Código de Trabajo, art. 223, 1992-05-29 official text · verified 2026-10-30

3. Payment is due at the latest between 90 and 120 days after the fiscal year closes, and has the same privileges, guarantees and exemptions as salary.Ley 16-92, Código de Trabajo, art. 224, 1992-05-29 official text · verified 2026-10-30

4. The share is computed on net profits before taxable income is determined and before bonuses to directors and managers.Ley 16-92, Código de Trabajo, art. 227, 1992-05-29 official text · verified 2026-10-30

5. Exempt are agricultural, agro industrial, industrial, forestry and mining companies in their first three years of operation unless agreed otherwise, agricultural companies with capital up to RD$1,000,000, and free zone companies.Ley 16-92, Código de Trabajo, art. 226, 1992-05-29 official text · verified 2026-10-30

6. If the parties disagree on the amount, workers can go to the labor minister, who can ask the tax authority to verify it.Ley 16-92, Código de Trabajo, art. 225, 1992-05-29 official text · verified 2026-10-30

Worked example

A company with 20 indefinite workers, each on RD$40,000 (US$656.81) a month with under three years of service, earns a net profit of RD$5,000,000 (US$82,100.86). The pool is RD$500,000 (US$8,210.09). Using the 23.83 divisor, each cap is RD$75,535.04 (US$1,240.30), so the 20 caps total RD$1,510,700.80 (US$24,805.97), above the pool, and the pool of RD$500,000 (US$8,210.09) is shared out in full.
With a net profit of RD$50,000,000 (US$821,008.63) the pool is RD$5,000,000 (US$82,100.86), but the caps limit the total to RD$1,510,700.80 (US$24,805.97).

Step by step

Close the year and fix net profit before tax.
Work out the pool and each cap.
Pay between day 90 and day 120 after close.
Keep the calculation, in case workers ask the Ministry to verify it.

Common traps

The rule says indefinite workers. Fixed term staff are outside the text, but a contract that should be indefinite comes back in.
Art. 224 words the deadline as at the latest between 90 and 120 days, so aim for day 90 to be safe.

Sources

Código de Trabajo, Ministerio de Trabajo edition

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