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In general terms, foreigners may be employed in Uruguay in all activities carried out throughout the national territory. 

The migration system in Uruguay provides for different ways to enter the country: as temporary resident, permanent resident, or non-resident. To be able to work, foreigners must have temporary or permanent residence, granted by the National Immigration Office of Uruguay.

There are several mechanisms for establishing salaries: 

  • Individual negotiation between employee and employer. 

  • Bilateral negotiation with the implementation of bargaining agreements between the company and the unions.  

  • Tripartite negotiation in which the government participates together with workers and employers in setting the minimum wage. Categories and readjustments are also defined through the Wage Councils (tripartite entities made up of State delegates, workers, and employers).



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Prepared by Uruguay XXI based on surveys with companies in the sector and specialized consulting firms. 



Natural persons living in Uruguay are subject to Personal Income Tax. In addition, and only in case they have assets located in Uruguay and provided they exceed the non-taxable minimum amount (USD 110,000, which is doubled for family units), they must pay Wealth Tax.


Personal Wealth Tax (IRPF)


IRPF is a personal and direct tax levied on income earned by natural persons living in Uruguay. Residents are those persons who stay in Uruguay for more than 183 days during a calendar year and who establish their main activities or business or have economic or vital interests in Uruguay.

The payment is made annually and is settled, as a general rule, on December 31 of each year. In any case, employed persons must make monthly advance payments for this tax according to their different types of income (capital and/or work).

The IRPF rate is progressive, which means that the higher the income, the higher the tax:



1 BPC (Benefits and Contributions Base) = $ 4,519

Figures expressed in Uruguayan pesos. See the Uruguayan peso exchange rate here.


Other taxes: Retirement Contribution, Health Insurance and Labor Reconversion Fund


Likewise, workers must comply with other obligations that ensure their access, and that of their family, to the benefits to which they are entitled (health, social security, accident insurance).

On the one hand, workers have the obligation to contribute a portion of their salary each month, which must be withheld by the employer at the time of payment and paid to the Social Security Authority (BPS). The personal contribution rates withheld from a worker’s salary are as follows:

  • Retirement contribution: 15%.

  • National Health Insurance: ranges from 3%-8% depending on the amount of income and the worker’s family structure.

  • Labor Reconversion Fund: 0.125%.


On the other hand, there are areas of activity in which it is very common for professionals to bill their fees to the company. To do so, it is necessary to set up: 

  • A company providing professional services. In this case, the professional must have his/her university degree recognized in Uruguay and will have to pay IRPF.

  • A sole proprietorship, which will also pay IRPF.  

  • A Simplified Joint Stock Company (SAS company) which will pay the Corporate Income Tax (IRAE), and in the case of a technology service provider, he/she will be exempted from such tax, under the Software Incentive Regime.

Check the Social Security Authority (BPS) contribution simulator here.

Go back to the main webpage of WORK section



Know the rights and obligations that workers and employers have in Uruguay.


Which taxes must be paid? Which are the benefits? Check it out here:

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