How severance works in the Dominican Republic
Under the Dominican Labor Code (Law 16-92), an employer may end an open-ended employment contract without cause through a mechanism called desahucio — but doing so triggers a mandatory payout to the worker. The package has four parts: notice pay (preaviso, art. 76), severance pay (auxilio de cesantía, art. 80), compensation for unused vacation (arts. 177 and 182) and the proportional Christmas salary (art. 219), a legally required 13th salary. This calculator estimates each item using the exact brackets in the law. Everything runs in your browser; your numbers are never uploaded anywhere.
How to use the calculator
- Enter the monthly salary in Dominican pesos (RD$).
- Pick the start date and end date of the employment: the tool works out the exact length of service and the months worked in the current year.
- Tick the box if the employer did not give advance notice — the Code requires paying it in cash instead.
- Read the estimated total and the item-by-item breakdown; the details panel shows the days and formula behind each figure.
The method behind the numbers
Dominican practice converts the monthly salary into a daily wage by dividing by 23.83 — the average number of working days per month (286 working days a year divided by 12). This is the criterion used by the Ministry of Labor’s official calculator; the salary is not divided by 30 or by 365.
Notice pay is 7 days of salary after 3 to 6 months of service, 14 days from 6 months to 1 year, and 28 days from 1 year on. Severance pay follows this scale:
| Length of service | Days of ordinary salary |
|---|---|
| Under 3 months | None |
| 3 to 6 months | 6 days |
| 6 months to 1 year | 13 days |
| 1 to 5 years | 21 days per year |
| More than 5 years | 23 days per year |
A final fraction of a year longer than 3 months is paid proportionally: 6 extra days if the fraction is up to 6 months, 13 days if it exceeds 6 months. Unused vacation is paid in cash: 14 working days for 1 to 5 years of service, 18 days after 5 years, and a 6-to-12-day scale for service between 5 and 11 months. The Christmas salary equals one twelfth of the ordinary salary earned during the calendar year — in practice, monthly salary × months worked that year ÷ 12.
Worked example
An employee earns RD$60,000 per month, has worked 3 years and 8 months, leaves on November 1 (10 months worked that year) and received no advance notice:
- Daily wage: 60,000 ÷ 23.83 = RD$2,517.83
- Notice pay: 28 days × daily wage = RD$70,499.37
- Severance: 3 years × 21 days, plus 13 days for the 8-month fraction = 76 days × daily wage = RD$191,355.43
- Unused vacation: 14 days × daily wage = RD$35,249.69
- Christmas salary: 60,000 × 10 ÷ 12 = RD$50,000.00
- Estimated total: RD$347,104.49
Amounts are computed with the unrounded daily wage (2,517.8347…), so adding the rounded figures by hand may differ by a cent.
Three ways a Dominican contract can end
- Desahucio: the employer terminates without stating a cause and owes notice and severance pay. This is the scenario the calculator covers.
- Despido: dismissal for serious employee misconduct. If a court finds it justified, no notice or severance is owed; if it is ruled unjustified, both become due.
- Dimisión: the employee resigns alleging serious employer fault; if a court validates it, the employee collects the corresponding indemnities.
In every scenario the worker keeps the acquired rights: compensation for unused vacation and the proportional Christmas salary.
Frequently asked questions
Does an employee who resigns get severance?
A voluntary resignation does not generate notice or severance pay. The worker still collects the acquired rights: compensation for unused vacation and the Christmas salary proportional to the months worked that year.
When must severance be paid?
Within 10 days of the termination of the contract (art. 86 of the Labor Code). Late payment costs the employer one day of salary for every day of delay, a strong incentive to settle on time.
Is severance taxable in the Dominican Republic?
Notice and severance pay are exempt from income tax (art. 86 of the Labor Code and art. 299 of the Tax Code), and the Christmas salary is exempt up to the legal twelfth (art. 222). Compensation for unused vacation, pending wages and bonuses are taxable income.
Does the employer need a reason to terminate?
Not under desahucio: no cause is required, but the full package must be paid on time. That is why the size of the severance package is a key number for anyone hiring — or being hired — in the Dominican Republic.
This tool provides an informative estimate under the Labor Code and is not legal advice. For variable salaries, commissions or disputes, check the Ministry of Labor’s official calculator (calculo.mt.gob.do) or consult a Dominican employment lawyer.