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Uruguay has strong labor rights, mandatory aguinaldo (13th month in 2 installments), salario vacacional (double holiday pay), Salary Council collective bargaining, and 7.5–15% employer BPS. Rippling handles BPS, DGI, and Uruguay Labour Code compliance.
Uruguay is a stable South American upper-middle-income country with the highest Human Development Index in Latin America (alongside Chile and Argentina). Montevideo is the primary business hub with a growing technology, gaming, and financial services sector. Uruguay has high internet penetration, strong rule of law, and a well-educated, English-proficient tech workforce. Uruguay uses the Uruguayan peso (UYU).
| Contribution | Rate | Notes |
|---|---|---|
| BPS (employer) | 7.5–15% | Varies by sector; covers pension, maternity, family allowances |
| BSE (work accident) | ~0.25–2% | Work accident insurance; rate by risk category |
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| Contribution | Rate | Notes |
|---|---|---|
| BPS (employee) | 15% | Pension, health, unemployment insurance |
| IRPF (income tax) | 0–36% | Progressive 7-bracket; withheld monthly |
| FONASA (health fund) | 3–6% | Mutualista health insurance contribution; varies by family situation |
| Annual Income (UYU) | Rate |
|---|---|
| Up to 95,676 | 0% |
| 95,677–191,352 | 10% |
| 191,353–382,704 | 15% |
| 382,705–860,082 | 24% |
| 860,083–1,528,581 | 25% |
| 1,528,582–3,057,162 | 27% |
| Above 3,057,162 | 36% |
Monthly IRPF withholding by employer; remitted to DGI. Annual IRPF return by June 30 of following year.
Notice: 1 month (standard). Severance for unfair dismissal: 6 months' wages for the first year + 1 month per additional year (capped at 6 additional months = max 12 months). Salary Councils may set additional sector-specific severance. BPS and BSE must be settled on termination.
Uruguay requires a mandatory aguinaldo (13th month salary) paid in two equal installments: June 30 and December 20. Each installment equals 1/6 of wages earned in the preceding 6 months. In addition, employees are entitled to a salario vacacional (vacation pay supplement) equal to the annual leave pay plus an additional 100% — effectively doubling the holiday pay. Budget for both obligations.
Uruguay has the most extensive labor rights framework in Latin America, including legally regulated union activity, mandatory collective bargaining via Salary Councils (Consejos de Salarios) in most sectors, and strong dismissal protections. Wages in many sectors are set by tripartite Salary Councils (employer representatives, union representatives, government) rather than by individual negotiation.
Uruguay's minimum wage is UYU 22,268/month (2024). However, sector-specific minimum wages set by Salary Councils frequently exceed the national minimum. Employers must apply the higher of the national minimum or the applicable sector wage.
Uruguay is a stable, upper-middle-income South American country with a high HDI, strong rule of law, and a growing technology and startup sector in Montevideo. Uruguay has one of Latin America's highest internet penetration rates, a thriving gaming and software development industry, and a well-educated English-proficient tech workforce. Uruguay is a popular EOR destination for US and European tech companies.
