Uruguay Payroll Information – Deel Global Payroll

Updated on: 2025/08/04 14:35 (UTC)

Overview

Uruguay is a republic located in South America and is bordered by Argentina to the west, Brazil to the north, and the Atlantic Ocean to the south. Uruguay is a member of MERCOSUR, also known as the Southern Common Market, a free-trade organization of five countries in South America.

There are 19 first-order administrative subdivisions within Uruguay known as departments (departamentos), including Artigas, Canelones, Cerro Largo, Colonia, Durazno, Flores, Florida, Lavalleja, Maldonado, Montevideo, Paysandú, Río Negro, Rivera, Rocha, Salto, San José, Soriano, Tacuarembó, and Treinta y Tres.

The primary written and spoken language used in Uruguay is the Spanish language, which also is Uruguay’s official language. The English language is somewhat commonly used in Uruguay’s business community. The writing system for the Spanish language is an alphabetic writing system with Latin script that includes the 26 letters of the English alphabet plus four additional letters: ch, ll, ñ, and rr, with the first, second, and fourth of these additional letters having the status of digraphs formed from two other letters. With regard to accent marks (diacritics) used in Spanish, the third of these additional letters is the combination of the letter n and a tilde ( ̃ ), the acute diacritic ( ́ ) is commonly used over vowels, and the diaeresis ( ̈ ) is used in rare situations. The directionality that is used for written Spanish text, as is used for English writing, is progression along horizontal lines from left to right, with successive horizontal lines read from top to bottom.

Uruguay’s currency is the Uruguayan peso, although some taxable amounts are denominated as multiples of the Benefits and Contributions Base (Base de Prestaciones y Contribuciones, abbreviated as BPC). The Social Security Bank (Banco de Previsión Social, abbreviated as BPS) publishes valuations of the BPC in Uruguayan pesos, with BPC valuations subject to change on an annual basis.

Employers in Uruguay are responsible for withholding income tax from all employees, withholding social taxes from employees, and making additional social tax contributions.

In addition, employers must comply with the compensation and benefit regulations outlined in the Law of Labor Administration.

Foreign workers in Uruguay are treated the same as in-country employees for taxes and wages, however, a different income tax regime applies to nonresidents. Employers must employ foreign workers with the correct visas, but may pay foreign workers with any legal currency.

Uruguayans working in the United States are covered by U.S. tax law with possible work status exclusions applying. Work within the U.S. states and territories is covered by various labor laws.

News articles regarding payroll in Uruguay are available in

CURRENCY DETAILS

The currency of Uruguay is the Uruguayan peso ($U). The internationally recognized three-letter currency code for the Uruguayan peso is UYU. The plural form of Uruguayan peso is Uruguayan pesos.

In Uruguay, amounts of Uruguayan pesos are commonly written using the general dollar currency symbol $, which in addition to being used for all dollar currencies is used for some, but not all peso currencies. When an amount of Uruguayan pesos is written in Spanish, the predominant language in Uruguay, using the currency symbol $, the symbol precedes the numerical value with a space or no space between the numerical value and symbol.

When an amount of Uruguayan pesos is written using the currency symbol $U, or one of its variants ($u, $U, $U, U $, u $, $UR, $Ur, UR$, Ur$, UY$, and Uy$), to distinguish Uruguayan pesos from other peso currencies, the symbol precedes the numerical value with a space or no space between the numerical value and symbol.

One hundredth ( ¹ ⁄ ₁₀₀ ) of a Uruguayan peso is referred to as a centésimo, with the plural form of centésimos.

When amounts of Uruguayan pesos are written in Spanish, the comma that in English separates the thousands place from the hundreds place instead is rendered as a dot (.), and the dot that in English separates the ones place from the tenths place instead is rendered as a comma.

TAXES

The national government of Uruguay enacts laws regarding income taxes and social taxes. Income taxes must be withheld from all employees and remitted monthly to the General Directorate of Taxation (Dirección General Impositiva, abbreviated as DGI). Additionally, employers must file annual income tax returns.

Employers also must withhold social security, public medical insurance, and work-related accident and sickness insurance contributions from all employees and remit them monthly to Social Security Bank (Banco de Previsión Social, abbreviated as BPS). Employers make additional contributions to these funds as well.

The tax year is the calendar year from Jan. 1 to Dec. 31.

Coronavirus (Covid-19) Guidance: Law No. 19,942, published March 26, 2021, exempts smaller employers registered in the Social Security Bank’s industry and commerce regime from half of employer pension contributions from Jan. 1 to June 30, 2021. To qualify, a business must have had on average up to 19 employees in 2020 and total income of up to 10 million indexed units (unidades indexadas, abbreviated as UI) in their most recent completed fiscal year, based on the UI value at the end of that year. The indexed unit is a statistical value that may be adjusted daily, and one unit was worth $U 4.7846 on Dec. 31, 2020. Businesses that have fiscal years ending on dates other than Dec. 31 may consider their income from calendar year 2020.

Law No. 19,942 also exempted employers in certain sectors that do not fall under the small-employer exemption from half of employer pension contributions from April 1 to June 30, 2021. The affected sectors include some hotels and restaurants; cinemas; land, air, and water transport; businesses operating at the Carrasco and Laguna del Sauce international airports; event and conference organizers; and travel agencies. This was expanded by Law No. 19,956, published June 22, 2021, to be 100% of employer pension contributions from Jan. 1 to June 30, 2021 and to add more sectors, including duty-free shops at the border, artists, rental and service of film equipment, and sports clubs and recreational education. Law No. 19,989, published Oct. 1, 2021, modifies the provisions of Law No. 19,956 to extend the exemption of employer retirement contributions to the period of July 1 to Oct. 31, 2021, for some included industries.

Law No. 19,993, published Oct. 21, 2021, exempts supermarkets and warehouses from 100% of employer pension contributions for 12 months starting from a date to be determined by the government. In order to qualify, a business must meet the following conditions:

The fiscal domicile of the main premises is located in a border department with a land border crossing, and within 60 kilometers from the border crossing; and
Gross income in the last fiscal year prior to the law’s effective date is up to 4 million UI, using the value at the end of the fiscal year. In fiscal years less than twelve months, income will be considered proportionally.

Income Taxes

Income taxes in Uruguay primarily are administered by the General Directorate of Taxation. Personal income tax often is referred to in Uruguay as IRPF, which is an abbreviation of the equivalent Spanish-language term for personal income tax commonly used in Uruguay, impuesto a la renta de las personas físicas. Personal income taxation of employment income is part of Uruguay’s second of two categories of income tax, with the first category of income tax generally consisting of taxation of nonexempt passive income.

Coverage: All employers generally must withhold income tax from all employees who are Uruguayan residents. Residents are considered those that reside in Uruguay more than 183 days in a year or those whose principal nucleus of activities, be they economic or vital, is within Uruguay. Coverage of nonresidents is provided under the Foreign Workers section of this primer.

Employees: Employees generally are defined as all individuals in a dependent employment relationship subject to Social Security contributions, employees of public institutions, or foreign workers who are exempt from and choose not to contribute to the pension scheme.

Rates and Thresholds: Income tax rates are levied on a progressive scale, with rates applicable to employment income ranging from zero to 36%.

Each of Uruguay’s personal income brackets contains a range of income based on the Benefits and Contribution Base, known in Spanish as the Base de Prestaciones y Contribuciones (BPC). The equivalent value of the BPC in Uruguayan pesos is subject to annual adjustment, with the valuations available from Uruguay’s Social Security Bank.

Effective for 2022, the value of the BPC is equal to $U 5,164. Effective for 2021, the value of the BPC was equal to $U 4,870.

Effective for 2022, Uruguay’s personal income tax rates for employment income paid to residents and minimum and maximum amounts of annual and monthly income for each tax bracket are as follows:

Range of Annual Taxable Income in Multiples of the BPC	Range of Annual Taxable Income Based on Uruguayan Peso Equivalence	Range of Monthly Taxable Income in Multiples of the BPC	Range of Monthly Taxable Income Based on Uruguayan Peso Equivalence	Income Tax Rate
Up to 84 BPC	Up to $U 433,776	Up to 7 BPC	Up to $U 36,148	zero
More than 84 BPC and up to 120 BPC	More than $U 433,776 and up to $U 619,680	More than 7 BPC and up to 10 BPC	More than $U 36,148 and up to $U 51,640	10%
More than 120 BPC and up to 180 BPC	More than $U 619,680 and up to $U 929,520	More than 10 BPC and up to 15 BPC	More than $U 51,640 and up to $U 77,460	15%
More than 180 BPC and up to 360 BPC	More than $U 929,520 and up to $U 1,859,040	More than 15 BPC and up to 30 BPC	More than $U 77,460 and up to $U 154,920	24%
More than 360 BPC and up to 600 BPC	More than $U 1,859,040 and up to $U 3,098,400	More than 30 BPC and up to 50 BPC	More than $U 154,920 and up to $U 258,200	25%
More than 600 BPC and up to 900 BPC	More than $U 3,098,400 and up to $U 4,647,600	More than 50 BPC and up to 75 BPC	More than $U 258,200 and up to $U 387,300	27%
More than 900 BPC and up to 1,380 BPC	More than $U 4,383,000 and up to $U 7,126,320	More than 75 BPC and up to 115 BPC	More than $U 387,300 and up to $U 593,860	31%
More than 1,380 BPC	More than $U 7,126,320	More than 115 BPC	More than $U 593,860	36%

Effective for 2021, Uruguay’s personal income tax rates for employment income paid to residents and minimum and maximum amounts of annual and monthly income for each tax bracket were as follows:

Range of Annual Taxable Income in Multiples of the BPC	Range of Annual Taxable Income Based on Uruguayan Peso Equivalence	Range of Monthly Taxable Income in Multiples of the BPC	Range of Monthly Taxable Income Based on Uruguayan Peso Equivalence	Income Tax Rate
Up to 84 BPC	Up to $U 409,080	Up to 7 BPC	Up to $U 34,090	zero
More than 84 BPC and up to 120 BPC	More than $U 409,080 and up to $U 584,400	More than 7 BPC and up to 10 BPC	More than $U 34,090 and up to $U 48,700	10%
More than 120 BPC and up to 180 BPC	More than $U 584,400 and up to $U 876,600	More than 10 BPC and up to 15 BPC	More than $U 48,700 and up to $U 73,050	15%
More than 180 BPC and up to 360 BPC	More than $U 876,600 and up to $U 1,753,200	More than 15 BPC and up to 30 BPC	More than $U 73,050 and up to $U 146,100	24%
More than 360 BPC and up to 600 BPC	More than $U 1,753,200 and up to $U 2,922,000	More than 30 BPC and up to 50 BPC	More than $U 146,100 and up to $U 243,500	25%
More than 600 BPC and up to 900 BPC	More than $U 2,922,000 and up to $U 4,383,000	More than 50 BPC and up to 75 BPC	More than $U 243,500 and up to $U 365,250	27%
More than 900 BPC and up to 1,380 BPC	More than $U 4,383,000 and up to $U 6,720,600	More than 75 BPC and up to 115 BPC	More than $U 365,250 and up to $U 560,050	31%
More than 1,380 BPC	More than $U 6,720,600	More than 115 BPC	More than $U 560,050	36%

Nonresidents are assessed a flat income tax rate of 12% on their employment income for work performed in Uruguay or otherwise sourced to Uruguay.

Registration: All employers must enroll with the DGI at a DGI office or online.Employers can register with General Directorate of Taxation and the Social Security Bank at the same time.

To register, employers generally must submit either Form 0351 or Form 0352, and Form 205 between 10 days prior to the initiation of activities and the day when the employer initiates activities. As part of the registration process, employers must acquire a taxpayer identification number known as a Unique Tax Registry number. The equivalent Spanish term for Unique Tax Registry is Registro Único Tributario (RUT).

Taxable Amounts: Income from work is considered to be all regular or extraordinary payments in money or in kind paid to employees for the performance of dependent work minus allowable deductions. This includes all remuneration items, travel expenses given as compensation, vacation pay, severance payments, and profit sharing payments.

Employers should make the following deductions for the following: family allowances, health benefits, unemployment benefits, maternity allowances, work accident compensation, severance pay up to the legal maximum, non-Uruguay source income, interest and gains from government bonds, currency gains, certain sales of a residence, capital gains from publicly traded stock; and certain rents from unmovable property. Employees want to have their employment income subject to income tax reduced by some deduction amounts must detail eligibility for the deductions on Form 3100 and provide the form to their employer.

Withholding Methods: Employers must withhold income taxes from employee paychecks and make monthly payments.

Returns and Remittance: Employers must make monthly remittances and file monthly returns. Employers may choose to pay income tax and social tax payments jointly if their annual income is less than $U 385,352. All other employers generally must file Form 2144 Payment Slip along with their income tax remittances. Returns must be filed online or at a DGI office. Payments must be made through bank deposits, certified third party collection networks, or at a DGI office. Due dates for monthly returns and remittances vary based on employers’ RUT numbers.

All employers withholding income taxes must file an annual return using Form 1104, Declaration of Taxes. Employers are given different due dates to file an annual return based on their RUT numbers. The return must be filed using the Sigma computer application and submitted online, or using a CD.

Recordkeeping: Tax records generally must be kept for a minimum of five years.

Penalties: Employers that fail to register for tax compliance are subject to a fine of $U 770.

Employers that fail to make monthly remittances on time are subject to a fine between $U 480 and $U 8,970.

Late returns are assessed fines between $U 540 and $U 1,600.

Social Taxes

The Social Security Bank, also known as the Institute of Social Security, generally serves as the administrator of the social insurance scheme in Uruguay. Insurance for industrial accidents and occupational diseases is overseen by the National Bank of Insurances (Banco de Seguros del Estado, abbreviated as BSE). Uruguay’s social security assessments based on employment income also are known as Special Contributions for Social Security (Contribuciones Especiales de Seguridad Social, abbreviated as CESS).

Coverage: All employers generally are required to withhold Social Security contributions from employees and make additional payments.

Rates and Thresholds: The total social insurance tax rate for employees generally ranges from 18.125% to 23.125%, and the total social insurance tax rate for employers generally is 12.65%. These general total rates consist of a pension contribution (aporte jubilatorio), a contribution for the National Health Fund (Fondo Nacional de Salud, abbreviated as Fonasa), and a contribution for the Labor Restructuring Fund (Fondo Reconversión Laboral, abbreviated as FRL).

Employees and employers in some industries, such as the construction industry, are assessed additional contribution rates. As with the aforementioned three types of contributions, the Social Security Bank collects the industry-specific funds.

Employers in all industries are assessed contributions to fund replacement compensation for work accidents and occupational diseases (accidentes del trabajo y enfermedades profesionales), and these contributions are collected by the National Bank of Insurances.

Pensions: Employees are assessed a pension contribution rate of 15% and employers are assessed a pension contribution rate of 7.5%. Pension contributions are subject to a maximum monthly amount of employment income upon which the contributions may be assessed on employees and employers. This maximum amount is known in Uruguay as a contribution limit (tope de cotización) and is subject to adjustment each Feb. 1.

Effective starting Feb. 1, 2022, the monthly contribution limit for pension contributions is $U 215,179. Effective from Feb. 1, 2021, to Jan. 31, 2022, the monthly contribution limit for pension contributions was $U 202,693. Effective from Feb. 1, 2020, to Jan. 31, 2021, the monthly contribution limit for pension contributions was $U 188,411.

Pension contributions are split between the Social Security Bank’s Intergenerational Solidarity Regime (Régimen de Solidaridad Intergeneracional) and an employee’s account with the Individual Savings Regime (Régimen de Ahorro Individual) of one of the country’s pension savings fund administrators (administradoras de fondos de ahorro previsional, abbreviated as AFAP). Employees have two options with which to have their pension contributions and those of their employer split between the Intergenerational Solidarity Regime and the Individual Savings Regime.

Under the first allocation option, three thresholds of monthly income affect the allocations. If an employee’s monthly income is up to the initial threshold, the contributions are evenly split between the Intergenerational Solidarity Regime and the Individual Savings Regime. If an employee’s monthly income exceeds the initial threshold and is up to the middle threshold, the contributions derived from employment income up to the initial threshold are evenly split between the Intergenerational Solidarity Regime and the Individual Savings Regime, and the contributions derived from employment income in excess of the initial threshold and up to the middle threshold are totally allocated to the Intergenerational Solidarity Regime. If an employee’s monthly income exceeds the middle threshold and is up to or in excess of the high threshold, which is the same amount as the pension contribution limit, the contributions derived from employment income up to the initial threshold are totally allocated to the Intergenerational Solidarity Regime and the contributions derived from employment income in excess of the initial threshold and up to the high threshold are totally allocated to the Individual Savings Regime.

Under the second allocation option, two thresholds of monthly income affect the allocations. Contributions derived from an employee’s monthly income up to the initial threshold are totally allocated to the Intergenerational Solidarity Regime, and contributions derived from employment income in excess of the initial threshold and up to the high threshold are totally allocated to the Individual Savings Regime.

The initial and middle thresholds are subject to adjustment each Jan. 1, and the high threshold is subject to adjustment each Feb. 1. Changes to the value of the high threshold, which is the same as the pension contribution limit, are indicated earlier in this section.

Effective for 2022, the monthly initial threshold for pension contribution allocations is $U 71,726 and the monthly middle threshold for pension contribution allocations is $U 107,589. Effective for 2021, the monthly initial threshold for pension contribution allocations was $U 67,564 and the monthly middle threshold for pension contribution allocations was $U 101,346.

Uruguay’s four pension savings fund administrators are Integración, República, SURA, and Unión Capital. Other pension savings fund administrators may join the market, and Uruguay previously had more than four pension savings fund administrators.

National Health Fund: Employers are assessed a contribution rate of 5% for the National Health Fund, and employees are assessed a basic contribution rate of 3% for the National Health Fund. The National Health Fund is part of the National Integrated Health System (Sistema Nacional Integrado de Salud, abbreviated as SNIS).

Employees with a spouse, a qualifying cohabitee, or at least one child are subject to a variable additional rate (tasa adicional variable) for the National Health Fund that ranges from 1.5% to 5% based on types of dependents, causing the maximum National Health Fund rate that may be assessed on employees to be 8%.

The variable additional rate assessed on an employee for a month also is based on whether the employee was paid during the month up to 2.5 times the Benefits and Contribution Base, known in Spanish as the Base de Prestaciones y Contribuciones (BPC), or more than 2.5 times the BPC. The equivalent value of the BPC in Uruguayan pesos is subject to annual adjustment, with the valuations available from Uruguay’s Social Security Bank.

Effective for 2022, as the value of the BPC is $U 5,164, the threshold of monthly income up to which one set of variable additional rates applies and above which another set of variable additional rates applies is $U 12,910. Effective for 2021, as the value of the BPC was $U 4,870, the threshold of monthly income up to which one set of variable additional rates applies and above which another set of variable additional rates applies was $U 12,175.

Employees with income for a month of up to 2.5 times the BPC are not assessed an additional rate for the National Health Fund if they do not have a spouse or cohabitee, but if they have a spouse or cohabitee, they are assessed an additional rate for the National Health Fund of 2% for that month, causing their total National Health Fund rate for that month to be 5%. The additional rate for employees with income for a month of up to 2.5 times the BPC is unaffected by whether such employees have at least one child.

Employees with income for a month of more than 2.5 times the BPC are assessed additional rates for the National Health Fund as follows:

Types of Dependents	Additional Rate	Total Rate
Employee has neither spouse nor cohabitee, and has no dependent children	1.5%	4.5%
Employee has neither spouse nor cohabitee, and has at least one dependent child	3%	6%
Employee has a spouse or cohabitee, and has no dependent children	3.5%	6.5%
Employee has a spouse or cohabitee, and has at least one dependent child	5%	8%

In addition to the employer contribution rate of 5%, some employers are required to pay a mutual contribution supplement (complemento de cuota mutual, abbreviated as CCM) for the National Health Fund. The amount of the mutual contribution supplement an employer is required to pay is determined by:

multiplying the employer’s number of beneficiary workers (trabajadores beneficiarios) by the value of the applicable mutual fee (cuota mutual) to determine the first sum;
determining the second sum by adding the contribution amount that the employer’s employees collectively are required to pay based on the basic contribution rate of 3% to the contribution amount for which the employer is liable based on the contribution rate of 5%; and
subtracting the second sum from the first sum.

For the immediately aforementioned calculation, if an employer’s second sum exceeds or is equal to the employer’s first sum, the employer is not required to pay a mutual contribution supplement.

Beneficiary workers are workers who are eligible for health insurance coverage in Uruguay through the country’s National Integrated Health System. An employee is required to be recognized as a beneficiary worker during a month when the employee worked for at least 13 days or 104 hours during the month or was paid at least 1.25 times the BPC during the month, although an employer can choose to recognize an employee as a beneficiary worker even if the employee otherwise would not qualify based on time worked or income.

Effective for 2022, as the value of the BPC is $U 5,164, the threshold of monthly income for determining beneficiary worker status is $U 6,455. Effective for 2021, as the value of the BPC is $U 4,870, the threshold of monthly income for determining beneficiary worker status was $U 6,087.50.

There is a generally applicable mutual fee, although the construction industry has a mutual fee for construction (cuota mutual para construcción) instead of the generally applicable mutual fee. The equivalent values of the generally applicable mutual fee and the mutual fee for construction in Uruguayan pesos are subject to adjustment, with the valuations available from Uruguay’s Social Security Bank. The generally applicable mutual fee is adjusted on an annual basis, while the mutual fee for construction is subject to monthly adjustment.

Effective for 2022, the generally applicable mutual fee is $U 1,549. Effective for 2021, the generally applicable mutual fee was $U 1,434.

Effective since Feb. 1, 2022, the mutual fee for construction is $U 1,698. Effective for January 2022, the mutual fee for construction was $U 1,019. Effective for December 2021, the mutual fee for construction was $U 1,100. Effective since May 1, 2021, and for February 2021, the mutual fee for construction is $U 1,572. Effective for March and April 2021, the mutual fee for construction was $U 1,336. Effective for January 2021, the mutual fee for construction was $U 943. Effective for April and December 2020, the mutual fee for construction was $U 1,001. Effective from Feb. 1 to March 31, 2020, and from May 1 to Nov. 30, 2020, the mutual fee for construction was $U 1,430.

Labor Restructuring Fund: The Labor Restructuring Fund, also known as the Job Retraining Fund, is used to finance programs of the National Institute of Employment and Vocational Training (Instituto Nacional de Empleo y Formación Profesional, abbreviated as INEFOP).

Effective since Jan. 1, 2019, employees are assessed a Labor Restructuring Fund contribution rate of 0.1% and employers also are assessed a Labor Restructuring Fund contribution rate of 0.1%. Effective until Dec. 31, 2018, employees were assessed a Labor Restructuring Fund contribution rate of 0.125% and employers also were assessed a Labor Restructuring Fund contribution rate of 0.125%.

Work Accidents and Occupational Diseases, also known as BSE Coverage (Cobertura de BSE): Contribution rates for the work-related accident and occupational diseases fund are set by the National Bank of Insurances and vary among employers based on the risk levels associated with their workers.

Subsidized Services Contribution (Aporte Servicios Bonificados): Employers are assessed a subsidized services contribution rate on employment income that they paid to workers in occupations involving health risks that are hazardous enough that the government of Uruguay designated them as eligible for subsidies to help workers in these occupations acquire early retirement. Subsidized services contribution rates range from 6.9% to 27.5%, with the applicable rates varying among occupations based on the comparative degree to which each occupation endangers the lives of workers and the comparative degree to which each occupation affects the physical and mental health of workers.

Construction Unemployment and Retirement Fund (Fondo de Cesantía y Retiro de la construcción, abbreviated as FOCER): The Construction Unemployment and Retirement Fund applies to workers in the construction industry. Employers in the industry are required to pay assessments based on the employment income they paid to employees, and for each employee, the employer is assessed a contribution rate from 0.5% to 5%, with the contribution rate dependant on the employee’s terms of employment. Employees in the industry are required to contribute 0.5% of their salary to the fund.

Construction Social Fund (Fondo Social de la Construcción, abbreviated as FSC): The Construction Social Fund applies to workers in the construction industry. The fund provides special educational, health, social security, and recreational benefits to workers in the construction industry. Employers in the industry are assessed a contribution rate of 1.2691% for the fund, with the rate assessed based on the total employment income that the employer paid to employees. Employees in the industry are assessed a contribution rate of 0.5809% of their salary for the fund. Contributions for the Construction Social Fund also help finance the construction industry’s Training Institute (Fundacion de Capacitación, abbreviated as FOCAP).

Construction Workers Social Fund of Housing (Fondo Social de Vivienda de Obreros de la Construcción, abbreviated as FOSVOC): The Construction Workers Social Fund of Housing applies to workers in the construction industry. The fund provides housing loans and subsidies to workers in the construction industry. To finance this fund, employers in the industry are assessed a contribution rate of 0.025% of the employment income paid to each employee, and employees in the industry are assessed a contribution rate of 0.025% of their salary.

Social Fund of Housing for Workers of the Graphic Industry (Fondo Social de Vivienda para trabajadores de la Industria Gráfica del Trabajo, abbreviated as FSVG): The fund provides various forms of housing assistance to workers in the graphical work industry, including awards of new or used housing and loans for refurbishment or purchase of housing. Employees in the industry are required to contribute 1.15% of their salary to the fund.

Metallurgical Social Fund (Fondo Social Metalúrgico, abbreviated as FOSMETAL): The Metallurgical Industry Fund applies to workers in the metal products, machinery, and equipment industry. Employers in the industry are assessed a contribution rate of 0.86%, and employees in the industry are assessed a contribution rate of 0.39%.

Domestic Work Social Fund (Fondo Social Trabajo Doméstico): The Domestic Work Social Fund applies to workers in the domestic work industry and helps promote the development of worker and employer organizations in the industry and the development of care centers for individuals linked to the domestic work industry. Employers and employees in the industry have the option of providing contributions to the fund, instead of the contributions being mandatory assessments. The voluntary contribution rate for employers is 0.03%, and the voluntary contribution rate for employees also is 0.03%.

Labor Credits Guarantee Fund (Fondo de Garantía de Créditos Laborales): The Labor Credits Guarantee Fund assists workers affected by employers’ insolvency by providing replacements for wages, bonuses, and severance pay. Effective since Jan. 1, 2019, employers are assessed a contribution rate of 0.025% for the fund.

Registration: Employers must enroll in the Social Security Bank prior to initiating activities. Employers that are obligated to withhold income tax must file a unified registration form to register with both BPS and the General Directorate of Taxation. Employers that are exempt from income tax withholding must only register with the BPS. Construction companies must register separately, registering each construction project.

Employers must enroll in Remote Connection (Conexion Remota) by filing a Request for Remote Connection Membership on the BPS website.

All employers must register employees with the Social Security Bank using the Form Gestion de Afiliaciones. The form may be presented through the BPS website, by email, fax, in person, or by mail. The deadline to register employees with BPS varies as follows:

employees working in industry, commerce, and domestic service; 10 days before their hire date;
employees working as bakers, stable laborers, fisheries staffers, and catering workers; within 24 hours after earning income, or until 12 hours after the employees’ hire dates;
employees working in rural jobs; within 72 hours of employees’ hire dates;
employees working in construction; 48 hours before a employees’ hire dates.

Employers must enroll employees in workers compensation insurance with the BSE. To enroll, employers must file Form 1990 with the BSE prior to the hire of new employees.

Taxable Amounts: All nominal salaries, payments in kind, private retirement funds, aguinaldo (annual bonus) payments, and other forms of remuneration are subject to tax.

Returns and Remittance: Social Security payments and returns must be made monthly (quarterly for employees working in construction) to the Social Security Bank. Exact due dates vary by month and are posted on the Social Security Bank website. Employers generally file returns first and, upon receiving the returns, the Social Security Bank will issue employers with invoices detailing required contributions.

Employers must notify the Social Security Bank within five business days after the termination of every employee. Additionally, employers must notify the Social Security Bank of employment modifications by the 10th business day of the following month.

BSE payments are subject to individual agreements with the BSE, with most employers paying monthly or annual installments. However, all employers must file a Declaration of Monthly Salaries with the BSE by the last business day of the month following the month that salary was paid.

Recordkeeping: Tax documents generally should be kept for five years.

Penalties: Some of the penalty amounts for failing to timely file social tax returns are based on percentages of one Readjustable Unit (Unidad Reajustable, abbreviated as UR). The equivalent value of one Readjustable Unit in Uruguayan pesos is subject to monthly adjustment, with the valuations available from Uruguay’s Social Security Bank.

Employers that fail to file returns on time are subject to a fine of 0.1 times one Readjustable Unit within the first month and 0.25 times one Readjustable Unit after the first month. For repeated late filings, employers are subject to a fine between 0.2 times one Readjustable Unit and 0.5 times one Readjustable Unit.

Employers that fail to make monthly remittances on time will be subject to fines from 2.5% and 5% of taxes outstanding if taxes are paid within five days of when they were due. If paid after the fifth business day and up to 90 calender days, employers are subject to fines between 5 and 10% of taxes due. If paid after ninety calender days, employers are subject to fines between 10 and 20% of taxes due.

Other Taxes

Uruguay’s national government does not assess any taxes on employment income other than those covered in the Income Taxes and Social Taxes sections of this primer.

State/Jurisdiction Taxes

Taxes on employment income are not assessed by any of Uruguay’s departamentos or local jurisdictions.

COMPENSATION AND BENEFITS

Labor laws regarding compensation and benefit regulations are regulated by the Ministry of Labor and Social Security, which conducts inspections and levies fines in the case of violations. Uruguay’s body of labor law requires employers to meet standards such as minimum wage, work hours, payment, and recordkeeping requirements. National holidays are mandated paid days off. Employers must also provide for annual leave, among other types of leave. Parental leave and sick leave may be paid via the social insurance scheme.

Employees are entitled to the government pension fund covered under social taxes.

Specific rules apply to termination pay.

Minimum Wage

Uruguay has a standard national minimum wage and a minimum wage for domestic work.

Effective since Jan. 1, 2022, the standard national minimum wage is $U 19,364 per month. Effective for 2021, the standard national minimum wage was $U 17,930 per month.

Effective since Jan. 1, 2022, the minimum wage for domestic work is $U 23,484 per month. Effective from July 1 to Dec. 31, 2021, the minimum wage for domestic work was $U 23,144 per month. Effective from Jan. 1 to June 30, 2021, the minimum wage for domestic work was $U 22,093 per month.

In Uruguay, the standard national minimum wage often is referred to as the national minimum salary (salario minimo nacional, abbreviated as SMN).

Overtime

Overtime generally must be paid at two times normal wages when work is performed in excess of eight hours per day or 44 hours per week for workers in the commerce sector and 48 hours in the case of workers in the industrial sector. Work performed on mandatory public holidays must be compensated at two times normal wages.

Hours of Work

The maximum workday is eight hours and the maximum workweek is 44 hours for workers in the commerce sector and 48 hours for workers in the industrial sector. In the Industrial sector, it is permissible to follow the schedule of nine-hour days, from Monday to Friday, complementing the 48 hours a week with three hours of work on Saturdays. The maximum workday for underage workers, apprentices, employees with hazardous occupations, and workers in telecommunications is six hours and the maximum workweek is 36 hours.

Employers must provide employees with weekly rest periods, although the exact provisions for the rest period vary by industry as follows:

workers in the industrial sector; one day of weekly rest, generally a Sunday;
employees working in the commerce sector; 36 consecutive hours of rest following every 44 hours of work. Rest given in this manner does not need to be provided on a Sunday;
domestic workers; 36 consecutive hours of rest which includes all of Sunday.

Employees must be given daily rest periods of between two and two and half hours such that employees do not work more than five consecutive hours. This rest period may be reduced to one hour by agreement, although this must be reported to the Inspector General of Work and Social Security.

Holidays

The mandatory paid public holidays specified by Uruguayan law are:

Jan. 1: New Year’s Day
May 1: Labor Day
July 18: Constitution Day
Aug. 25: Independence Day
Dec. 25: Christmas Day

Workers who work on paid holidays must be paid at two times their normal wages.

Leave

All employers must grant all employees 20 days of paid annual leave each year. The leave should be taken consecutively, or in the case of an agreement, in two 10 day periods. Employers must provide employees with the equivalent salary for periods of leave prior to their onset. Employees are entitled to an extra day of vacation for every four years worked after an initial five years of service.

Sick leave: Employers are not required to provide any paid sick leave, although employees are entitled to paid sick leave provided by the Social Security Bank. Starting on the fourth day of absence from illness (or from the first day of hospitalization), employees may claim a social security benefit of 70% of salary for up to one year, which can be extended. To be eligible for salary replacement, an employee must have made social security contributions for at least 75 days or three months within 12 months prior to the date of illness.

Paid parental leave: Pregnant employees are entitled to 14 weeks of leave—six weeks prior to the due date of the child and eight weeks afterwards. This benefit is paid by the BPS directly to employees. Additionally, employers must give females two breaks a day of 30 minutes each for nursing a newborn when it is necessary. Male workers in the private sector may take up to 10 days of leave for the birth of a child, starting on the day of birth.

Marriage Leave: Employers must give newly married employees three days of leave starting on the day of the wedding provided that the employee has given at least 30 days of notice.

Bereavement Leave: Employers must provide three days of leave for employees experiencing the loss of a father, mother, spouse, adopted child, adopting parent, partner, common-law spouse, or sibling.

Blood donation leave: All employers must provide employees with one day (up to two maximum) of leave the day that employees donate blood.

Testifying in a trial leave: Employers must provide employees with paid leave on the days they are called on to testify in a trial.

Wage Payment

Uruguayan law requires wages to be paid on a weekly basis, every 15 days, or on a monthly basis. Salaries paid on a monthly basis must be paid within the first five business days and never later than the 10th day of the following month. Employers are required to pay an additional 20% of employees’ salaries for night work performed from 10 p.m. to 6 a.m., if the work is performed for more than five consecutive hours.

Employers must provide all employees with payment slips after each payroll.

Bonuses and Special Benefits

Annual Bonus (Aguinaldo): All employers must provide all employees with a bonus equivalent to one-twelfth ( ¹ ⁄ ₁₂ ) of the employees’ yearly salary in two payments, one before June 30 and the second within 10 days before Dec. 24. However, the deadline for the second portion is generally moved to Dec. 20 by government decrees each year.

Domestic workers are entitled to seniority bonuses of 0.5% per year of service, up to a maximum of 5% for 10 years of service. These workers are also entitled to a presenteeism bonus paid at the same time as the annual bonus. The presenteeism bonus is equal to one-quarter of one of the two annual bonus payments and is paid for each six-month period, from December to May or June to November, in which the worker does not miss a day of work. Certified illness, strikes, or annual or other types of leave do not count as days missed.

Termination Pay

For workers paid monthly; one month of salary per year of service up to six months; for workers paid by project or day laborers; the equivalent of the remuneration paid for 25 shifts per year up to the salary of 150 shifts, if the worker has completed 240 shifts that year. If the worker has not completed 240 shifts, employers must compensate them with the equivalent of two shifts’ pay for every 25 shifts completed up to 150 shifts. Employers are exempt from termination pay for workers who have not worked 100 shifts.

Employers must pay terminated employees a portion of the annual bonus equal to the proportion of the year they have worked upon termination.

Different terms apply to domestic workers, street vendors, rural workers, workers in the fishing industry, and workers of protected classes (e.g. pregnant workers, sick workers, etc.).

Rural employees who live on the work premises must be given 30 days of notice prior to dismissal. There are no other mandated notice periods.

After having suspended or terminated an employee, employers must provide terminated employees with unemployment papers within 10 days.

Workers’ Compensation

Employers must purchase insurance against work related accidents and illnesses from the National Bank of Insurance. Coverage is provided under Social Taxes.

Recordkeeping

Employers must obtain and maintain a Book of Labor Registration (Libro de Registro Laboral). Employers must apply for a Book of Labor Registration at the local Ministry of Labor and Social Security office by the 10th day after the initiation of activities. Employers must record workers hours and schedule in the book and must obtain the signatures of inspectors of the Ministry of Labor and Social Security upon inspection. Once the book has been filled, it must be renewed. Filled books must be kept for two years.

Other employment documents generally should be kept for five years.

The Ministry of Labor and Social Security requires employers to provide to the Social Security Bank information regarding taxpayer registration details and the working conditions of workers. The information must be provided using a unified worksheet (planilla de trabajo unificada), which can be filed through the Social Security Bank using its Online Services Portal (Portal de Servicios en Línea).

FOREIGN WORKERS

Foreign workers are entitled to the same rights as Uruguayan citizens and generally are covered by the same tax and workplace laws.

Visas: Individuals wishing to work and reside in Uruguay must obtain the temporary or permanent residency permits. Special work permits are not required.

Temporary Residence Permit: Temporary residency permits allow individuals to reside and work legally in Uruguay for periods between one and two years, renewable once. There are seven categories of permits each of which grant the holder the ability to work in different fields. Prior to applying for a temporary residence permit, employers must issue foreign nationals with a preliminary work offer and work contract. Foreign nationals can apply the permits at Uruguayan consular missions or at the Immigration Authority (Direccion Nacional de Migracion, DNM) within Uruguay.

Permanent Residency Permits: Permanent residency permits allow foreign nationals to work and reside legally in Uruguay for an indefinite period of time, although the permit expires after the holder has resided outside of Uruguay for more than three years. Employers must present applicants with official documentation detailing the employment relationship as well as a copy of the employment contract before foreign nationals can apply for the permit. Foreign nationals must apply at a DNM office.

Taxes: Foreign workers who are residents are subject to taxation in the same manner as Uruguayan citizens. However, with regard to income taxation, nonresidents working in Uruguay or with employment income otherwise sourced in Uruguay are subject to a flat income tax rate of 12% on this employment income. Nonresidents are subject to income taxation in Uruguay only on their Uruguayan-sourced income. Income taxation of nonresidents often is referred to in Uruguay as IRNR, which is an abbreviation of the equivalent Spanish-language term for income taxation of nonresidents commonly used in Uruguay, impuesto a las rentas de los no residentes.

Foreign workers also are subject to same social security contributions as Uruguayan citizens, with the exception of foreign workers who hold positions in Duty Free Zones, and foreign workers who are exempted under social security totalization agreements. Employers of dependent foreign workers generally must withhold the tax at source and remit it at the end of the month following the termination of the employment contract.

Wages/Payments: Foreign workers and their employers are subject to the same wage requirements as residents. Wages may be paid in any legal currency.

WORKING IN THE UNITED STATES

Foreign workers from Uruguay must meet general visa requirements and be certified to be employed in the United States. General visa requirements for the U.S. are included in the separate chapter “Immigrant and Nonimmigrant Visas.”

U.S. employers also must check the names of all new-hires and employees against the Specially Designated Nationals and Blocked Persons List, administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). Because OFAC prohibits financial transactions with individuals on the list, employers cannot employ them and may face fines for failing to comply.

Uruguayan workers are eligible to work in the U.S. under H-2B visas, which cover labor or services of a temporary or seasonal nature in occupations other than agriculture or registered nursing. The number of H-2B visas issued each year is limited by U.S. law.

For tax purposes, Uruguayans are subject to U.S. employment-based taxation on income earned in the U.S. unless work under specific visa types that exempt earnings from taxes.

State and local taxation of Uruguayan workers also can apply.

The U.S. labor laws apply to all workers employed and providing services in the country.

Work eligibility as an employee is contingent upon Department of Homeland Security and Labor Department approval and the employee receiving a U.S. Social Security number from the Social Security Administration.

Tax Residency: In general, employees working in the U.S. on a temporary basis are considered nonresidents for tax purposes unless they qualify for resident status. Employees can be granted permanent resident status through the so-called green card test or if they meet the substantial presence test under the U.S. tax code. More information on these requirements is in the

Permanent residents are subject to U.S. tax requirements the same as U.S. citizens and are taxed under the U.S. system on their worldwide earnings.

Income Taxes: Generally, nonresidents in the U.S. who are from Uruguay and are working in the U.S. are subject to U.S. taxes based on their U.S.-sourced income. Income is taxed differently based on whether it is categorized as wage income or nonwage income, which includes interest and dividends.

A Form W-4, Employee’s Withholding Certificate, must be filed by each employee with their employer. All nonresidents in the U.S. who are from Uruguay and are working in the U.S. must claim “single” in Step 1c, regardless of marital status; write “Nonresident Alien” or “NRA” in the space under Step 4c of the form; and may not claim “exempt” in the space under Step 4c.

Nonresident alien employees may adjust withholding using Step 2b or 2c of the Form W-4; certain employees also may be able to use Steps 3, 4a, or 4b. More information about Form W-4 requirements for nonresident alien employees is available in the

Although the versions of Form W-4 issued in 2020 or later significantly differ from the versions issued in 2019 or earlier, nonresident employees that filed a valid version of Form W-4 from 2019 or earlier with their employer do not need to file another Form W-4 with the employer unless they need to implement a change for their withholding. On Forms W-4 issued in 2019 or earlier, nonresident alien employees were required to check the “single” box on line 3, regardless of marital status; write “Nonresident Alien” or “NRA” above the dotted line on line 6; and were not permitted to claim “exempt” on line 7 of the form.

An additional amount is added to a nonresident alien employee’s wages for calculating federal income tax withholding, with the amount based on pay period frequency and the date of the employee’s most recently filed Form W-4. The table of additional amounts applicable to Forms W-4 from 2020 or later and the table applicable to Forms W-4 issued before 2020 are available in the

“Nonresident Alien Withholding.”

Nonwage income and self-employed foreign workers can be subject to income tax withholding at a flat rate of 30%.

Additionally, foreign workers may be taxed differently based on the specific type of visa they hold.

Tax treaties: Uruguay and the U.S. do not have a tax treaty.

Social Taxes: Most foreign workers are subject to paying into the U.S. Social Security system. Foreign nationals who are exempt from paying income tax and who do not have the eligibility to receive a social security number may not be required to pay social taxes. Foreign workers contributing to Social Security for a certain time period may be eligible to receive benefits.

Generally, foreign workers in the U.S. that have specific visas as exchange visitors or students or who are temporarily in the U.S. for agricultural work are not subject to social taxes on income that is obtained from the purpose in which they originally entered the United States.

Totalization Agreements: Social Security totalization agreements can allow foreign workers and U.S. nationals working abroad to avoid paying into two social security systems while being subjected to losing benefits for their home country system. Under totalization agreements, generally, foreign workers only pay into one of the social security systems, either the home or the foreign system, but not both. Foreign nationals, utilizing a totalization agreement, also can count years of contributions paid to different social security systems to which they have contributed to be eligible for benefits in one country.

The bilateral totalization agreement between Uruguay and the United States took effect Nov. 1, 2018 and a summary of those provisions is included in

Wage Payment: Under certain visas for certain types of employment, employers are required to pay foreign workers the higher of either the prevailing wage or the actual wage that is paid to U.S. workers that have similar skills and qualifications.

There are no particular requirements that employees be paid in U.S. dollars.

TREATY ARRANGEMENTS

Uruguay has entered into more than 20 income tax treaties, but has not entered into an income treaty with the United States. Uruguay also has more than 30 totalization agreements for social tax coverage purposes, including an agreement with the United States.

Uruguay’s tax treaties are available in

RESOURCES

All resources in English unless otherwise noted.

General

U.S. State Department: U.S. Relations With Uruguay

U.S. Central Intelligence Agency:

The World Factbook: Uruguay
The World Factbook: Languages

U.S. Department of Commerce: Export.gov: Uruguay - Business Travel

Ministry of Labor and Social Security (Spanish)

The Government Guide to Procedures and Information Regarding the Uruguayan State (Spanish)

Currency Details

International Organization for Standardization: Currency Codes - ISO 4217

Unicode Consortium: Currency Symbols

United Nations: United Nations Terminology Database: Uruguay

Taxes

Late Tax Payments (Spanish)

The General Directorate of Taxation (Spanish)

The General Directorate of Taxation, General Information on Dependent Work (Spanish)

National Bank of Insurances (Spanish)

Social Security Laws (Spanish)

Social Security Bank (Spanish)

Law No. 16,713 (Spanish)

Law No. 19,942 and BPS Communication 15/2021 (Spanish)

Law No. 19,956 and BPS Communication 24/2021 (Spanish)

Law No. 19,989 (Spanish)

Law No. 19,993 (Spanish)

Compensation and Benefits

Ministry of Labor and Social Security (Spanish)

Uruguayan Labor Laws (Spanish)

Law No. 12,840 (Spanish) and Decree No. 168/2021 (Spanish)

Workers Compensation Laws (Spanish)

Social Security Bank: Domestic Workers (Spanish)

Foreign Workers

The Government Guide to Procedures and Information Regarding the Uruguayan State for Foreigners (Spanish)

National Immigration Authority

Working in the United States

U.S. Internal Revenue Service:

IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens
IRS Publication 15, Circular E, Employer’s Tax Guide
IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
IRS Publication 519, U.S. Tax Guide for Aliens
IRS Publication 901, U.S. Tax Treaties

U.S. Labor Department, Foreign Labor Certificationhttp://www.doleta.gov/business/dflc.cfm

Hiring Foreign Workers

Treaty Arrangements

The General Directorate of Taxation, International Conventions (Spanish)