Foreign employees can be hired in every activity developed throughout the national territory. The migration system in Uruguay provides different ways to enter the country: temporary residence, permanent residence or non-resident. In order to work, foreigners must have temporary or permanent residence, granted by the Uruguayan National Immigration Office.

There are different mechanisms for determining salaries: 

  • individual negotiation between employee and employer, 

  • bilateral negotiation with agreements between companies and unions, 

  • tripartite negotiation involving the government with workers and employers setting the minimum. Categories and adjustments are also defined through the Wage Councils (Consejos de salarios, tripartite entities composed of State delegates, workers and employers).

Wage rates

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Source: Uruguay XXI based on information provided by companies and consulting firms. 



Natural persons who live in Uruguay are subject to the Personal Income Tax. Furthermore, natural persons pay Wealth Tax when their assets located in the country exceed the minimum non-taxable amount, established by the Executive Branch on a yearly basis.


Personal Income Tax (IRPF)


IRPF is a personal and direct tax which levies the income obtained by natural persons living in Uruguay. Residents are all natural persons staying in Uruguay for more than 183 days during a calendar year and who establish their core business or activities or have economic or vital interests in Uruguay. Payment is made on an annual basis and is liquidated - as a general rule - on December 31st of every year, without prejudice to the advances and withholdings made for different types of income.

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



1 BPC (Benefit and Contribution Base) = $ 4,519
Figures expressed in Uruguayan pesos. See Uruguayan peso quotation here

Other taxes: retirement contribution, health insurance and labor reconversion fund


As a worker you must comply with other obligations that guarantee access, and that of your family, to the benefits to which you are entitled (health, social security, accident insurance).

On one hand, you have the obligation to contribute a percentage of your monthly salary that must be retained by your employer at the time of payment and this must be paid to the BPS. The percentages of personal contribution, withheld from your salary are

  • Retirement contribution: 15%.

  • National Health Insurance: This contribution varies between 3%-8% depending on the amount of income, and the family structure of the worker.

  • Labor Reconversion Fund: 0.125%.


On the other hand, there are areas of activity in which it is very common for professionals to invoice their fees to the company, for this it is necessary to set up:

  • a company providing professional services, in this case the professional must homologate his university degree in Uruguay and provide personal income tax (IRPF),

  • a single-member company, which will also provide personal income tax (IRPF),  

  • a Simplified Corporations (SAS company) which will contribute IRAE, and in the case of a technology service provider will be exempt from this tax, under the Software incentive regime.

Check the contribution simulator of the Banco de Previsión Social here

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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: