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Uruguay has strong labor rights, mandatory aguinaldo (13th month in 2 installments), salario vacacional (doubled vacation pay), Salary Council collective bargaining, and 7.5–15% employer BPS. One of LATAM's most active EOR markets for tech companies. Rippling EOR handles all BPS, DGI, and Labour Code compliance.
Uruguay is South America's most stable, high-HDI economy with a growing technology, gaming, and startup sector in Montevideo. Uruguay has high rule of law, strong labor rights, and one of the region's most active union environments. EOR is popular for US and European tech companies accessing Uruguay's educated, English-proficient workforce. The aguinaldo, salario vacacional, and Salary Council minimum wage complexity make local compliance expertise critical.
Setting up a Uruguayan SA/SRL requires RUNE registration, BPS/DGI/BSE employer registration, and Salary Council sector determination. EOR is strongly recommended given Uruguay's intermediación laboral prohibition enforcement, Salary Council compliance complexity, and active BPS auditing. Uruguay is one of LATAM's highest-risk contractor markets, making EOR particularly valuable.
BPS employee: 15% on gross (pension, health, unemployment). IRPF income tax: progressive 0–36% withheld monthly. FONASA: 3–6% (health fund, varies by family). Total employee deductions approximately 20–25% of gross plus IRPF.
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BPS employer: 7.5–15% on gross (sector-dependent). BSE work accident: ~0.25–2% (risk category). Total employer on-cost approximately 8–17% of gross (sector-dependent). Aguinaldo and salario vacacional add effectively ~10–12% additional annual cost.
IRPF progressive 7-bracket: 0% (up to UYU 95,676/year) to 36% (above UYU 3,057,162/year). Monthly withholding by employer; remitted to DGI. Annual IRPF return by June 30 of following year.
Annual leave: 20 working days (after 1 year; increases with seniority). Sick leave: employer pays first 3 days; BPS from day 4. Maternity: 14 weeks fully paid via BPS. Paternity: 10 days paid. Public holidays: 11 national holidays.
Dismissal compensation: 6 months (year 1) + 1 month/year (additional years, max 12 months total). Notice: 1 month. Full BPS, IRPF, aguinaldo pro-rata, salario vacacional, unused leave settlement on termination. Rippling EOR calculates full package.
Non-Uruguayan nationals require work permits from MTSS (Ministry of Labour). Processing: 4–8 weeks. Rippling EOR supports permit applications through its Uruguayan entity.
Statutory: BPS 7.5–15% employer (sector-dependent), BSE work accident insurance, 20+ days annual leave, 14 weeks maternity via BPS, aguinaldo (13th month, 2 installments), salario vacacional (doubled vacation pay). Market standard: FONASA mutualista health, private health supplement, USD/UYU salary structuring. Montevideo is the primary market.
Rippling EOR Uruguay operates through a local Uruguayan entity. Key Uruguay-specific handling: BPS sector-specific contributions, IRPF progressive withholding, aguinaldo biannual installments, salario vacacional, Salary Council minimum wage compliance, BSE work accident insurance, and dismissal compensation calculation.
Uruguay requires two mandatory aguinaldo installments: June 30 (1/6 of wages January–June) and December 20 (1/6 of wages July–December). In addition, employees are entitled to a salario vacacional — vacation pay supplement equal to 100% of their annual leave pay, effectively doubling the cost of each vacation day. Rippling EOR calculates and pays both automatically on schedule.
Uruguay's Salary Councils (Consejos de Salarios) set minimum wages for most sectors in tripartite negotiations (employers, unions, government). Sector-specific wages frequently exceed the national minimum (UYU 22,268/month). Rippling EOR identifies the applicable Salary Council for each employee's sector and applies the correct minimum.
Uruguay has a strong union culture — nearly all formal sector workers are covered by Salary Council agreements. Unions have rights to information, consultation, and collective bargaining. Rippling EOR monitors applicable collective agreements and ensures compliance with negotiated wage floors.
Notice: 1 month standard. Dismissal compensation for unfair termination: 6 months' wages (first year) + 1 month per additional year (max 12 months total). Salary Councils may set additional sector-specific severance. All BPS, IRPF, aguinaldo, and salario vacacional must be settled on termination. Rippling EOR calculates the full termination package.
