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Hiring in Dominica
Dominica, officially known as the Commonwealth of Dominica, is an Island Country in the Caribbean. Roseau is the capital and the largest city of Dominica. Dominica’s main sectors are agriculture and financial services. Its main trading partners are Trinidad and Tobago, France, the United States, China and the United Kingdom. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Dominica’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. The Labor Code stipulates that employees are entitled to 2 weeks of annual leave. Resident individuals are taxed on their worldwide income. Nonresident individuals are taxed on income derived or sourced in Dominica. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Dominica’s Labor Code and tax laws.
statutory labor requirements
Probation Period
- The new employee may be required to serve a probationary period of not more than six months following the period of training
Annual Leave
- The employee shall be eligible to qualify for annual vacation leave with pay after each complete calendar year of service.
- Minimum leave entitlement in accordance with the Labor Standards Act shall be as follows:
-
- under five years’ service - two (2) weeks;
- five years and over - three (3) weeks.
Public Holidays
- New Year's Day (1st January)
- Carnival Monday & Tuesday (24th to 25th February)
- Good Friday (10th April)
- Easter Monday (13th April)
- Labor Day (4th May)
- Whit Monday (1st June)
- Emancipation Day (August Monday) (3rd August)
- Independence Day (3rd November)
- National Day of Community Service (4th November)
- Christmas Day (25th December)
- Boxing Day (26th December)
Maternity Leave
- Female employees who have completed one-year continuous service with the employer shall be granted maternity leave subject to the following conditions:
-
- the employee who is desirous of proceeding on maternity leave must apply at least six weeks before the expected date of commencement of maternity leave;
- applications for maternity leave must be supported by a medical certificate from a qualified medical practitioner stating the anticipated date of confinement;
- maternity leave shall cover a maximum of twelve weeks and shall be divided in not more than six weeks’ pre-natal period and not less than six weeks’ post-natal period;
- the employee applying for maternity leave must absorb the current year's vacation leave with pay; and
- the employee will be granted four weeks at half pay during maternity leave.
Paternity Leave
- There is no paternity leave
Work Hours
- The employee will not be required to work more than forty normal hours per week.
- The employee shall not be required to work more than eight normal hours per day and shall be entitled to not less than half an hour off for lunch.
Overtime
- Overtime at the rate of time and one half will be paid for work done in excess of the normal hours on a normal working day, and double time for work performed on public holidays.
Notice Period
- Where the employee intends to terminate his employment with the employer he may do so by giving the employer notice of the intended termination not later than
-
- one month before the date on which the termination is to have effect, where he is paid on a monthly basis or a basis of more than a month; and
- one week before the date on which the termination is to have effect, where he is paid on a basis less than a month.
Severance
- The employer shall contribute to the redundancy fund (if any), in respect of the employee and shall make redundancy payments to the employee if entitled on dismissal on redundancy grounds.
13th / 14th Month Pay
- No
- There is no statutory requirement to pay the 13th or 14th month salary.
- Employees are entitled to standard holiday pay after one year of service.
income tax
- Resident individuals are taxed on their worldwide income
- Nonresident individuals are taxed on income derived or sourced in Dominica
- Taxable income includes income from business, employment, rent, royalties, interest discounts, premiums, commissions, fees etc. less deductible expenses
Taxable Income |
Rate |
1 to 20,000 XCD |
15% |
20,001 to 50,000 XCD |
25% |
50,001 XCD and above |
35% |
deductible expenses
- The nontaxable personal allowance is XCD 30,000
- Other allowances are granted for mortgage interest and approved donations
Deductible Expenses |
|
Personal Allowance |
XCD 30,000 |
Other Deductions |
Mortgage Interest; Approved Donations |
immigration
- Visitors to Dominica normally do not require a visa unless they are nationals of the Dominican Republic or Haiti.
- Citizens of the following countries do not require a Dominica Visa
-
- Antigua and Barbuda
- Grenada
- Saint Kitts and Nevis
- Saint Lucia
- Saint Vincent and the Grenadians
- Citizens of most of the other countries such as EU countries, Argentina, Australia, Bahamas, Bangladesh, Maldives, Pakistan etc. do not require a visa for 6 months.
- Non Nationals wishing to engage in work in Dominica must first obtain a work permit from the Labor Division.
- A work permit automatically confers residency status if the term of employment lasts for more than six months.
- All work permits are valid for one-year duration and can be renewed.
- Residency does not however, exempt expatriates from the stipulations of the Alien Landholders Act, which restricts land purchase for non-Dominican citizens.
Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
Work Permit |
|
1 year |
|
Residence permit |
|
1 year (can be renewed) |
|
value added tax
- VAT applies on the sale of goods or the supply of services within Dominica, and on the import of goods into Dominica
- The standard rate is 15% and a reduced rate of 10% applies to hotel accommodations and dive activities
- Certain goods and services may be zero rate or exempt
VAT |
|
Standard Rate |
15% |
Reduced Rate |
10% |
Zero Rate |
0% |
withholding tax
Dividends
- Dividends paid to a nonresident are subject to a 15% withholding tax
Interest
- Interest paid to a nonresident is subject to a 15% withholding tax
Royalties
- Royalties paid to a nonresident are subject to a 15% withholding tax
Fees for Technical Services
- Technical service fees paid to a nonresident are subject to a 15% withholding tax
WHT |
|
Dividends |
15% |
Interest |
15% |
Royalties |
15% |
Fees for Technical Services |
15% |
termination
- The employer may terminate the employment of the employee without notice or payment of any severance payment or other terminal benefits where the employee has been guilty of serious misconduct affecting his employment.
- Where the employee is guilty of an offence in breach of his condition of employment or any misconduct that is not serious or a breach of any work rule governing his behavior or any misconduct such that the employer cannot reasonably be expected to continue to employ him if it is repeated, the employer may give the employee a written warning.
- If the employee after being warned is guilty of the same or similar offence or misconduct in the following six months, the employer may terminate his employment.
- The employer may terminate the employment of the employee because the employee was redundant in accordance with the provisions of the Protection of Employment Act
- Where the employee intends to terminate his employment with the employer he may do so by giving the employer notice of the intended termination
statutory benefits
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, notice period, and severance pay
- Statutory benefits also include social security benefits
Statutory Benefits |
Probationary Period |
Annual Leave |
Public Holidays |
Maternity Leave |
Sick Leave |
Overtime Pay |
Notice Period |
Severance Pay |
Social Security Benefits |
payments and invoicing
- The tax year is the calendar year
- Individuals are required to file separately
- Joint filing is not permissible
- Tax returns must be filed by 31st March following the tax year and the balance of tax is due upon the filing of the return
- A pay-as-you-earn (PAYE) system is used to deduct tax from the salaries of employees
- A late filing penalty of 5% of the tax due may apply
- The penalty for late filing is 10% of the outstanding tax
- Interest accrues at 1% thereof
ease of doing business
- The ease of doing business index is an index created by Simeon Djankov, an economist at the Central and Eastern Europe sector of the World Bank Group.
- Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
- According to the World Bank Dominica ranked 111th in the World in 2019 in terms of ease of doing business.
employee accruals
Christmas Bonus% |
0% |
Christmas Bonus Over Vacations % |
0% |
Severance per Year % |
Not applicable - paid in lieu of notice |
Vacations % | Employees with under 5 years of service are entitled to 2 weeks of annual leave (2.74% of annual salary). Employees with more than 5 years of service are entitled to 3 weeks of annual leave (4.109% of annual salary) |
Notice % |
Employees are entitled to 30 days of notice period for one year of service or more (8.24%) |
Christmas Bonus Over Notifications% | 0% |
Vacations Plus% | 0% |
Total percentage of Salary (yearly) | The total employment accruals as a percentage of salary per anum are equal to 11.07% |
employer accruals
Additional information (Country Accruals)
Social Security | 7.00% |
with redundancy | 0.25% |
Maternity | 12 weeks |
Christmas Bonus | |
Vacations | 9.59% |
Descritption: |
|
Employer Accruals Additional information
Employment Accruals | ||
Annual Leave | Minimum leave entitlement in accordance with the Labor Standards Act shall be as follows: • under five years’ service - two (2) weeks; • five years and over - three (3) weeks. |
This equals 3.8% (2/52 weeks) of annual income |
Maternity Leave | Maternity leave shall cover a maximum of twelve weeks and shall be divided in not more than six weeks’ pre-natal period and not less than six weeks’ post-natal period. The employee will be granted four weeks at half pay during maternity leave. | This equals 23% (12/52 weeks) of annual income |
Overtime | Overtime at the rate of time and one half will be paid for work done in excess of the normal hours on a normal working day, and double time for work performed on public holidays. | Depends on the number of overtime hours worked |
Severance | The employer shall contribute to the redundancy fund (if any), in respect of the employee and shall make redundancy payments to the employee if entitled on dismissal on redundancy grounds. | Subjective |
Social Security | The employer must contribute to social security at a rate of 7% of an employee’s earnings, up to a ceiling of XCD 6,000 per month | This equals 7% of annual income |