Hire employees and contractors in Uruguay

Remote’s guide to employing in Uruguay.

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  • Capital city

    Montevideo

  • Currency

    Uruguayan peso
    ($U, UYU)

  • Population size

    3,518,552
    (est. 2019)

  • Languages spoken

    Spanish

  • Availability

    Remote-Owned Local Entity

    We own our own entity in the countries where we operate to shield your company from risk and provide you and your employees with the signature Remote experience.

Facts & Stats

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.

  • Capital city

    Montevideo

  • Currency

    Uruguayan peso
    ($U, UYU)

  • Languages spoken

    Spanish

  • Population size

    3,518,552 (est. 2019)

  • 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)

Grow your team in Uruguay with Remote

Remote currently offers contractor payment and management services in Uruguay. We are busy building our own entity in the country to provide you with best possible employment solutions for your employees.

Remote’s global employment solution makes it easy for your company to employ workers in Uruguay quickly, efficiently, and in full compliance with all applicable labor laws. We take on the responsibility and legal risks of international employment so you can focus on hiring great talent and growing your business.

Risks
of misclassification

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.

Public holidays

Below are national public holidays applicable for all regions in this country. Remote customers have access to a detailed list of regional public holidays within the Remote platform. Sign up now to access all public holiday information.

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.

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

Calculate the cost to hire an employee
in Uruguay

Taxes in Uruguay

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

  • Employer

    • 5% - Health Insurance contribution

    • 0.1% - Labor Re-conversion Fund

    • 7.5% - Pension Fund contribution

    • 0.025% - Labour Credit Guarantee Fund

  • Employee

    • 15% - Pension Fund contribution

    • 3 – 8% - Health Insurance contribution

    • 0.1% - Labor Re-conversion Fund

  • Effective Personal Income Tax Rates

    • (in Uruguayan Pesos)

    • 0% - Up to 379,596 ($8643.40)

    • 10% - 379,596 - 542,280 ($8643.40 - $12347.72)

    • 15% - 542,280 - 813,420 ($12347.72 - $18521.57)

    • 24% - 813,420 - 1,626,840 ($18521.57 - $37043.15)

    • 25% - 1,626,840 - 2,711,400 ($37043.15 - $61738.58)

    • 27% - 2,711,400 - 4,067,100 ($61738.58 - $92607.87)

    • 31% - 4,067,100 - 6,236,220 ($92607.87 - $141998.73)

    • 36% - Above 6,236,220 (i.e., $141,998.73)

Types of leave

Paid time off

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.

Public holidays

There are 12 public holidays employees can take off work annually. Employees are entitled to mandatory paid time off on five of these holidays: January 1, May 1, July 18, August 25, and December 25, and must be paid overtime if required to work on a holiday.

Sick days

The first three days of an employee’s illness is compensated in full by the employer. Starting the fourth day of an illness, employees are entitled to sickness benefits equivalent to 70% of their normal wages.

Maternity leave

Female employees are entitled to 14 weeks’ of paid maternity leave starting six weeks before delivery, with benefits equivalent to their full wages paid by the social security office.

Paternity/Parental leave

Parents are entitled to just 13 days parental leave in total (of which 10 days are paid by Social Security and three by the employer).

Education leave

University students can take anywhere from six to 12 days off annually to attend to their studies, i.e., take examinations, process admissions, etc.

Other leave

  • Marriage leave: A newlywed employee is entitled to five days off, paid by employer
  • Bereavement leave: Employees can take three days off for the death of a close relative
  • Adoption leave: Adoptive parents are entitled to six weeks of continuous leave, with reduced working hours (50% reduction) for the six months following the adoption leave
  • Studies leave: Up to 10 days, the allotment depends on weekly working hours and is always paid by employer

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.

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