Remote’s guide to employing in

Uruguay
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Make employment in Uruguay easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Uruguay, all in one easy-to-use platform.

  • Capital City

    Montevideo

  • Currency

    Uruguayan peso ($U, UYU)

  • Languages

    Spanish

  • Population size

    3,518,552

Services available in this country:
Global Employment ServicesContractor Management

Facts & Stats

Uruguay Map Illustration
  • Capital City

    Montevideo

  • Currency

    Uruguayan peso ($U, UYU)

  • Languages

    Spanish

  • Population size

    3,518,552

  • Ease of doing business

    Medium

  • Cost of living index

    51.09 (2021)

  • Payroll frequency

    Bi-Monthly/Monthly

  • VAT - standard rate

    22%

  • GDP - real growth rate

    0.2% (2019)

The Oriental Republic of Uruguay (Spanish: República Oriental del Uruguay) is a democratic constitutional republic that boasts the 12th largest GDP in the Latin Americas, unrivalled levels of democratic freedom, press freedom, political stability, economic equality, and per capita income in South America.

With economic equality and poverty declining while GDP continues to rise, Uruguay is home to a developed workforce where enterprising businesses can expand to, with a positive economic outlook for the foreseeable future.

Grow your team in Uruguay with Remote

Looking to employ workers in Uruguay? Companies hiring in Uruguay must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.

Remote can employ your team in Uruguay on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Uruguay team. You can also pay contractors now in Uruguay with Remote.

Risks of misclassification

Uruguay, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Uruguay may lead to fines and penalties for the offending company.

Employing in Uruguay

Uruguay adheres to labor standards spelled out in the Constitution, several government edicts, and International Labor Organization statutes that are designed to provide employee protections and secure workers’ rights for Uruguay’s workforce of 1.6 million.

Common questions that could come up during the hiring process include minimum wage, overtime rates, and guaranteed paid time off. Remote can help you offer a complete, competitive, and compliant benefits package to your employees in Uruguay.

Minimum Wage

The minimum wage is fixed at 19,364 Uruguayan Pesos ($466.27) per month.

Payroll Cycle

For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.

Onboarding Time

We can help you get a new employee started in Uruguay fast. The minimum onboarding time we need is only 10 working days.

13th Salary

In Uruguay, 13th month salary (or just 13th salary) is a bonus payment made to employees that is equivalent to 1/12 of the employee's annual salary, paid by the employer in two installments during a period that runs from December 1 of one year to November 30 of the following year.
The 13th month salary in Uruguay is to be paid in two installments:

  1. June: Corresponding to the amount earned from December 1 through May 30.

  2. December (between the 14th and 23rd): Corresponding to the amount earned from June 1 through November 30.

5 Public holidays

Jan
Sunday, January 1, 20231New Year’s Day
May
Monday, May 1, 20232Labor Day
Jul
Tuesday, July 18, 20233Constitution Day
Aug
Friday, August 25, 20234Independence Day
Dec
Monday, December 25, 20235Christmas Day

Competitive benefits package in Uruguay

At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).

Our benefits packages in Uruguay are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:

  • Health Insurance

  • Dental Insurance

  • Vision Insurance

  • Mental Health Support

  • Pension or 401(K)

  • Life and Disability Insurance

Taxes in Uruguay

Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Uruguay.

  • 5%

    Health Insurance contribution

  • 0.1%

    Labor Re-conversion Fund

  • 7.5%

    Pension Fund contribution

  • 0.025%

    Labour Credit Guarantee Fund

Types of leave

Employees are entitled to 20 days’ vacation annually, used in the year following the vacation accrual. After the fifth year of employment, an extra day off is acquired, with a day added every four years until it maxes out at 25 days’ vacation annually.

During their annual vacation, employees are entitled to their full wages, as well as vacation benefits equivalent to 100% of their normal wages.

Employment termination

Termination process

Employers have the right to terminate employees, provided prior notice is provided, along with a severance package.

Notice period

There is no officially stipulated notice period in Uruguay.

Severance pay

The figure varies based on whether the workers' payment cycle is monthly or daily (except for dismissal with cause, which in the Uruguayan system implies misbehavior by the employee). The length of employment agreement also impacts severance:

  • Fixed-Term Contracts: When employees work until the end of the term agreed in their labor contract, they won't be entitled to severance compensation. In case they are terminated earlier, salaries until the end of the term agreed must be paid.

  • Indefinite Term Contracts: Employees are entitled to severance payments which includes one months salary for every year employed up to six months of salary.