Uruguay
Min. wage
(x13 payments)
$U25,383 /mo
About the minimum wage
Employer tax
~12.625%
Understand employer tax
Annual leave
20 days
Learn about annual leave
Notice period
No statutory minimum
Termination and notice info
Updated
Sep 2026
The indefinite-term contract is the default and most common form of employment in Uruguay. It has no fixed end date and may end by mutual agreement, employee resignation, dismissal for just cause, or dismissal without cause subject to statutory severance pay. Employment is presumed indefinite unless a fixed term or specific task is clearly agreed in writing.
Fixed-term contracts must state a defined end date or triggering event and are generally limited to about one year, used for genuinely temporary needs such as seasonal work, specific projects, or covering an absent employee. Repeated renewals or use for ongoing, permanent roles risk reclassification as an indefinite contract by labor authorities.
Standard hours are 8 hours/day and 44 hours/week for commercial and service-sector employees, or 8 hours/day and 48 hours/week for industrial workers. Overtime is capped at 8 additional hours per week and paid at 200% of the regular rate on ordinary days and 250% on Sundays/public holidays.
General Uruguayan labor law does not set a single statutory probationary period; a 3-month trial period is the widely followed market practice, and some sector collective bargaining agreements set it explicitly. During this period, termination is customarily handled with reduced formality and typically without the standard severance obligation, though treatment can vary by sector and is not codified as a uniform national rule.
Uruguay legally mandates a 13th-month payment called the Aguinaldo (Law No. 12,840), paid in two installments: by June 30 (covering wages earned December-May) and by December 24 (covering wages earned June-November). Each installment equals the sum of the employee's gross monthly remuneration earned during that 6-month period, divided by 12. It applies to all employees, including part-time and fixed-term workers (pro-rated for partial periods). There is no separate 14th-month payment in Uruguay.
Uruguay does not impose broad job-title restrictions on standard private-sector roles. Certain regulated professions (e.g., law, medicine, engineering, accounting) require local professional licensing or registration to use the corresponding professional title. Employers must otherwise ensure non-discriminatory, equal-opportunity hiring and job-posting practices.
Employer statutory contributions to BPS (Banco de Previsión Social) and FONASA total approximately 12.625% of gross salary: 7.5% retirement/pension fund, 5% FONASA national health insurance, 0.1% Fondo de Reconversión Laboral (labor retraining fund), and 0.025% Fondo de Garantía de Créditos Laborales (labor credit guarantee fund). This figure excludes the mandatory Aguinaldo 13th-month payment (tracked separately) and BSE workplace-accident insurance, which is a separate risk-rated premium of roughly 0.3%-8.5% of payroll depending on industry risk classification.
Employees contribute approximately 18.1%-23.1% of gross salary to BPS/FONASA: 15% retirement/pension fund, 3%-8% FONASA national health insurance (rate depends on salary level and number of covered dependents), and 0.1% Fondo de Reconversión Laboral. The 18.1% figure reflects the base rate (3% FONASA, no dependents); employees with dependents or higher incomes pay toward the upper end of the range. Progressive personal income tax (IRPF), withheld separately, ranges from 0%-36%.
In addition to statutory leave, employees are entitled to the following statutory benefits:
Uruguay's social security system is administered by BPS (Banco de Previsión Social) and jointly funded by employers and employees.
Workplace accident and occupational illness insurance in Uruguay is provided exclusively through the state-owned insurer BSE (Banco de Seguros del Estado), which holds a legal monopoly on this coverage.
Severance ('despido') is owed when an indefinite-contract employee is dismissed without just cause.
Uruguay legally mandates a 13th-month payment called the Aguinaldo (Law No. 12,840), separate from ordinary salary.
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Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. RemoFirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
