The objective of this study was to compare models for appropriate genetic parameter estimation for milk yield (305-day) in crossbred Holsteins in the tropics, where only records from crossbred cows were available. Eleven models with different effects of contemporary group (CG) at calving (herd-year-season or herd-year-month as fixed, and herd-year-month as random), age at calving (as linear or quadratic covariates, age-class, and age-class ? lactation), and dominance were considered. On-farm records from small herds (n < 50) were included or excluded to validate the parameter estimates. Average Information Restricted Maximum Likelihood (AIREML) and Best Linear Unbiased Prediction (BLUP) were used to estimate variance components and breeding values. R-square (R2) and standard error of heritability (h2) were used to determine the appropriate model. The estimates of heritability from most models ranged from 0.18 to 0.22. CG formation of herd-year-month as a random effect slightly lowered the additive genetic variance but considerably decreased the permanent environmental variance. The model with age-class ? lactation gave better R2 than other age adjustments. The models including records from smallholders gave similar estimates of heritability and a lower standard error than the models excluding them. The estimate of dominance variance as a proportion of total variance was close to zero. The low ratio of dominance to additive genetic variance suggested that the inclusion of dominance effects in the model was unjustified. In conclusion, the model including the effects of herd-year-month, age-class ? lactation, as well as additive genetic, permanent environmental and residual effects, was the most appropriate for genetic evaluation in crossbred Holsteins, where records from smallholders could be included.