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WORK

SOCIAL SECURITY

Social Security is funded with tax contributions from employees, employers and the government. Immigrants have the same rights as nationals.

Participation in a gainful activity implies mandatory registration in the Social Security Bank (Spanish acronym: BPS), both by dependent employees and employers as well as by self-employed workers, who must also register and pay tax.

Social security offers different benefits depending on needs and circumstances: maternity, paternity, unemployment, disability, industrial accidents and death risks:

In cash: unemployment benefit, maternity benefit, family benefit, retirement, old age pension.
In kind: eyeglasses, prosthetics and orthotics.
In services: mutual affiliation, maternal and childcare.

The system currently comprises several public agencies, the main ones being the Ministry of Labour and Social Security, the Social Security Administration, and the Pension Savings Fund Administrators (Spanish acronym: AFAP).

The Social Security Bank is responsible for collecting virtually all taxes paid by companies and employees and keeping each member's work record up to date. More specifically, The Social Security Bank is an autonomous body whose basic task is the coordination of social welfare services and the organization of social security.

Registering with this entity is mandatory, with the exception of foreign workers holding positions in Free Trade Zones. In addition, some foreign workers may waive their inclusion in the social security system under the protection of international treaties signed by Uruguay.

As of 2020, Uruguay has valid agreements with: Argentina, Australia, Belgium, Brazil, Canada, Chile, Denmark, Ecuador, the Faroe Islands, Finland, France, Germany, the Grand Duchy of Luxembourg, Greenland, Hungary, Iceland, India, Italy, the Kingdom of Belgium, the Kingdom of the Netherlands, Korea, Liechtenstein, Malta, Mexico, Norway, Paraguay, Portugal, Romania, Singapore, Spain, Sweden, South Africa, Switzerland, the United Arab Emirates, the United Kingdom of Great Britain and Northern Ireland, and Vietnam. For further information please click here.

What obligations do I have as an employee?

The employee must fulfil certain obligations that ensure their access, and that of their family, to the benefits to which they are entitled. They have the obligation to contribute a percentage of their wages on a monthly basis, which their employer is to withhold and pay to the Social Security Bank. The personal contribution percentages withheld from the salary are as follows:

Retirement contribution: 15%.
National Health Insurance: 3%, increased to 5% to cover their spouse or partner if they do not have any health coverage.
Additional National Integrated Health System: when the compensation exceeds 2.5 Benefits and Taxes Basic Units.
Labor Reconversion Fund: 0.125%.

Other obligations:

Check the pay stub.
Joining a health centre approved by the National Integrated Health System within 30 days after starting work. If the individual fails to do so, they will automatically be enrolled in the State Health Services Administration (Spanish acronym: ASSE) and their health care will be provided in public hospitals. See more on the health care system here.

What are my obligations as a self-employed worker / independent employer?

It is important to know that anyone independently involved in an activity is required to register with three organizations before starting said activity:

Other obligations:

Reporting to the Social Security Bank any changes regarding income, expenses and any other changes in the activity of the employees by the set deadlines.
Providing payroll with information on the employees’ work, on the basis of which contributions are calculated and the payment invoice is issued.
Making tax payments by the applicable dates according to the schedule established by the Social Security Bank. Tax payments are mandatory in all cases, whether you have employees or not.
Making tax payments on your behalf as the owner of the business.
Calculating, withholding and paying to the Social Security Bank in a timely manner the personal tax contributions withheld from the employees’ salaries and the employer contributions that must be made on each employee’s gross salary.

Pension Savings Fund Administrators (Spanish acronym: AFAP)

AFAPs are public limited companies that manage part of the taxes workers pay into the Social Security Bank, which go to covering disability risk, old age and survivor benefits. These companies operate within the market under a free-competition regime, are controlled by Uruguay’s Central Bank and must comply with the regulations of Law 16713.

The AFAPs in Uruguay which may be chosen are:

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When income is earned in an amount larger than that established by the law, part of the tax contributions is administered by the Social Security Bank, and another part is transferred to an AFAP.

The AFAP administers the percentage of tax contributions as individual savings and provides for disability, old age and survivor benefits, as appropriate.