Salary vs. Commission

[HOWMAR]

When an employee is compensated by salary plus commission for sales, does his amount of commissions get calculated in his holiday pay and liquidation amount?

[santodocam]

I do not include it based on the advice given to me by my attorney. I pay my staff a base salary PLUS a monthly transportation bonus, a monthly meal bonus, an attendance bonus (only if the employee has perfect attendance), plus a commission for each sale. Only the base salary is used to determine holiday pay, December's bonus, and liquidation pay. ALL of the above items however are subject to tax, which is paid by the employee through withholdings.

Again, this is based on the advice of my attorney's office.

I would recommend that you also speak with an attorney, as the rules here can be diferent based not only on the type of business or work being done, but also based on the humidity divided by the exchange rate.

[Gringo]

Originally Posted by HOWMAR

When an employee is compensated by salary plus commission for sales, does his amount of commissions get calculated in his holiday pay and liquidation amount?

I have found from past dealings here with regards to Liquidation that Income from a Company is Income no matter what you call it.....If you due a search on Dr1 you will find a formula that will calculate all Liquidations owing to you or your Ex staff.

Gringo

[MrMike]

Well apparently there are ways to put it down on paper so you aren't penalized for offering your employees rewards and compensation for going the extra mile, but this needs to be done while closely consulting a qualified attorney who knows labor law because any doubt or haziness, misfiled paperwork etc. will favor the employee and cost you big bucks when you can least afford it.

[Fabio J. Guzman]

Commissions ARE part of an employee's salary and are taken into account for liquidation purposes. Article 192 of the Labor Code includes “any other benefits received” as part of the definition of what a worker’s salary is. Labor Courts routinely apply this provision in connection with employees working on a base salary plus commission basis.

[MrMike]

Fabio, as you know it is required by law to devide 10% of a company's annual profits among employees.

My company does this monthly in leu of paying commissions, also we generally pay out alot more than 10%. (employees ofen double their salaries) Will this be considered commission in regards to your above comment?

[santodocam]

The bottom line best advice here is to pay an attorney and an accountant to review your business and how you pay your employees. I think all board members will agree the question you are asking is not one you should look to have answered correctly on this, or any board. If you try to save a dollar by not getting the professional advice, it will cost you hundreds, if not thousands.

Also, allowing a professional to handle HR matters like this will free you up to deal with focus of your business. I tried being a QuickBooks accountant here, like I was for 16 years in the US, and it is not the same. Here, everything is overcomplicated to make sure that you could never possibly comply by yourself.

If you need an attorney, the ones that advertise on this site are very good. If you would like my attorney's number, send me a PM.

Best of luck in your venture.

[Fabio J. Guzman]

MrMike, regarding the distribution of 10% of annual profits among employees, the Labor Code allows employers to cap this distribution as follows: a maximum of 45 days of salary for workers with less than 3 years on the job and 60 days for those workers with 3 years or more. It is not against the law, however, to give more, as you do.

These payments are not computed as part of a worker’s salary for liquidation purposes.

[HOWMAR]

Originally Posted by Fabio J. Guzman

MrMike, regarding the distribution of 10% of annual profits among employees, the Labor Code allows employers to cap this distribution as follows: a maximum of 45 days of salary for workers with less than 3 years on the job and 60 days for those workers with 3 years or more. It is not against the law, however, to give more, as you do.

These payments are not computed as part of a worker’s salary for liquidation purposes.

What happens in this case. You work for a Dominican subsidiary of an American company. All revenues are received by the American parent company. They in turn forward only enough dollars to cover the Dominican company expenses. All profits are retained by parent company.

[Fabio J. Guzman]

If they don't pay you your share of the profits, that is, your 45 or 60 days of salary as provided in the Labor Code, perhaps you could share your intimate knowledge of the scheme with Impuestos Internos.