Uruguay has no single labour code. Employment is governed by a set of individual laws on leave, dismissal, working hours and bonuses, and by sector-wide wage agreements negotiated in tripartite Wage Councils (Consejos de Salarios). Here is what employers need to know about leave, pay, tax and ending employment.
Annual leave and special leave are paid by the employer. Sickness, maternity and paternity benefits are mostly paid by the Social Security Bank (BPS).
After a year of work, plus 1 extra day for every 4 years of service after the first 5. Taken in one continuous block unless a collective agreement allows a split.
Of basic pay, paid by social insurance from the 4th day of absence (from day 1 if hospitalised), for up to 1 year.
Normally 6 weeks before and 8 weeks after the birth, up to 18 weeks for multiple or very low-weight births. Paid by BPS at average earnings.
3 days paid by the employer plus 17 days paid by BPS, from 1 January 2026 (up from 13 days in total).
After maternity leave ends, either parent (alternating if they wish) can work half-time until the baby is 6 months old while receiving a BPS subsidy for the hours not worked.
Set up each Uruguayan leave type in IceHrm with its own accrual, carry forward and approval rules, including the extra seniority days on annual leave. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
The national minimum wage is a floor. In practice, most employees are covered by higher minimum rates for their sector and job category, agreed in the Wage Councils and adjusted periodically.
The rate published by BPS for September 2026. Sector minimums are usually higher.
On working days, rising to +150% on rest days and public holidays. Overtime is limited to 8 hours a week.
Typically 48 hours a week in industry and 44 in commerce and offices, unless an agreement sets less.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so the higher rest-day and holiday overtime premiums reflect what was actually worked. Time & attendance →
Employment income is taxed under the IRPF at progressive rates. Bands are set in BPC units (UYU 6,864 in 2026), and employers withhold the tax monthly and pay it through BPS together with social security.
| Annual taxable income | Rate |
|---|---|
| Up to UYU 576,576 | 0% |
| UYU 576,577 – UYU 823,680 | 10% |
| UYU 823,681 – UYU 1,235,520 | 15% |
| UYU 1,235,521 – UYU 2,471,040 | 24% |
| UYU 2,471,041 – UYU 4,118,400 | 25% |
| UYU 4,118,401 – UYU 6,177,600 | 27% |
| UYU 6,177,601 – UYU 9,472,320 | 31% |
| Over UYU 9,472,320 | 36% |
Couples can opt to be taxed as a family unit, which uses a different scale. Non-residents are generally taxed on Uruguayan-source income under a separate tax (IRNR).
Social security covers pensions, health insurance (FONASA), sickness and unemployment benefits. Employers pay their share and withhold the employee's share each month.
| Contribution | Employer | Employee |
|---|---|---|
| Retirement (pension) | 7.5% | 15% |
| Health insurance (FONASA) | 5% | 3% – 8% |
| Labour Restructuring Fund | 0.1% | 0.1% |
| Labour Credit Guarantee Fund | 0.025% | – |
| Total | 12.625% | 18.1% – 23.1% |
Employers must also insure staff against work accidents with the state insurer (BSE), and budget for the aguinaldo, the salario vacacional and possible dismissal indemnity.
Build Uruguayan pay the way you already structure it, with your own salary components, deductions and formula columns, such as an aguinaldo accrual column. Want to know how well IceHrm handles payroll calculations for Uruguay? Contact us or see Payroll →
An employer can dismiss without giving a reason, but must pay a legal dismissal indemnity unless the dismissal is for serious misconduct (notoria mala conducta), which the employer must prove.
There is no statutory notice period for either side. Notice is set by the contract or a collective agreement, if at all.
| Service | Indemnity |
|---|---|
| Each year or part of a year | 1 month's pay |
| Maximum | 6 months' pay |
| Dismissal for serious misconduct | Nil |
Final pay also includes pro-rata aguinaldo, any untaken annual leave and the related salario vacacional.
Uruguay distinguishes between 5 paid holidays, when almost all activity stops and employees are paid even if they don't work, and other national holidays, which many private employers treat as normal working days.
Holidays falling on a Tuesday or Wednesday are observed on the Monday before, and on a Thursday or Friday on the Monday after, except for the fixed dates above. Collective agreements may grant extra days off.
Leave groups give each office its own holiday calendar, so you can decide which of Uruguay's holidays your Montevideo team takes off while offices elsewhere keep their own. Holiday calendars →
Employment contracts can be open-ended or fixed-term. The law doesn't require a written contract, but one is strongly recommended, and pay and conditions can never fall below the applicable Wage Council agreement.
There is no general statutory probation period. Trial periods are set by collective agreements or the contract, and are usually no longer than 3 months.
Send contracts for e-signing, store registration and insurance documents on the employee's record, and track onboarding with task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Uruguay, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Uruguay? Talk to us.
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