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Find out how Remote can guide you through the complexities of managing cross-border hiring, payroll, taxes, and compliance.

Payroll services in Uruguay

Uruguay has a stable economy with key industries in agriculture, technology, and services. Employers in Uruguay must comply with national labor laws, tax regulations, and social security contributions to ensure proper payroll management. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in Uruguay

Employers in Uruguay must adhere to national payroll regulations concerning wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

  • Minimum wage: As of 2024, Uruguay’s national minimum wage is UYU 22,268 per month.
  • Payroll frequency : Salaries are typically paid monthly, though some industries allow biweekly payments.
  • Standard working hours: The normal workweek in Uruguay is 44 to 48 hours, depending on the sector.
  • Overtime: Employees are entitled to overtime pay, generally calculated at 150% of the regular wage for extra hours and 200% for work on public holidays or rest days.

Taxation and social security contributions

  • Personal income tax (IRPF): Uruguay has a progressive tax system, with rates ranging from 0% to 36% depending on income levels.
  • Employer contributions:
    • Social Security (BPS - Banco de Previsión Social): Employers contribute 7.5% to 12.625% of the employee’s salary, depending on the industry.
    • National Health Insurance (FONASA): Employers contribute 5% to 6% of the gross salary.
  • Employee contributions:
    • Social Security (BPS): Employees contribute 15% of their gross salary.
    • National Health Insurance (FONASA): Employees contribute between 3% and 8%, depending on income and dependents.
  • Corporate tax (IRAE): The corporate income tax rate in Uruguay is 25%.
  • Tax reporting: Employers must file payroll taxes and social security contributions with Banco de Previsión Social (BPS) and Dirección General Impositiva (DGI) regularly.

Payroll compliance in Uruguay

  • Employment contracts: Contracts must be provided in writing, specifying salary, working hours, and benefits.
  • Payroll deductions: Employers must ensure accurate deductions for income tax, social security, and health insurance.
  • Vacation entitlement: Employees are entitled to 20 days of paid leave per year, plus public holidays.
  • Employers must stay updated on changes to Uruguay’s labor laws, tax rates, and contribution requirements to avoid penalties.

Run payroll in Uruguay with Remote

Managing payroll in Uruguay requires careful attention to tax laws, employment regulations, and social security contributions. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.