Uruguay is a constitutional republic located in South America. It is notable for its political stability, advanced social legislation, and high gross national product (GNP) per capita. More than half of the country’s workforce is employed in services and trade, one-fifth in manufacturing, and relatively few in financial institutions and agricultural enterprises.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Uruguay.
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Capital :
Montevideo
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Currency :
Uruguayan Peso (UYU, $, $U)
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Languages spoken :
Spanish
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Population :
3.485 million (2021 est.)
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Minimum wage 2023 :
UYU 21,106 (Monthly)
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Cost of Living index :
$$$ (49 of 139 nations)
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Payroll Frequency :
Monthly
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VAT - standard rate :
22%
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GDP - real growth rate :
4.4% (2021 est.)
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The national holidays mentioned below are valid for the year 2023.
*Mandatory paid leave and holiday pay at double the salary.
The approximate time for sharing the contract with an employee in Uruguay is 14 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
Employees cannot work more than eight hours a day, nor more than:
Overtime cannot exceed eight hours per week, and attracts a 100% surcharge on the value of the simple hour when performed on business days.
There is no statutory provision for probation periods
There is no statutory termination notice period for the employee, but as a good practice, the employee can give a two weeks’ notice period.
The employer is required to give a one month notice period.
All employees are entitled to an annual paid leave of at least 20 days, and one additional day of leave for every four years of seniority after more than five years of service.
An employee is entitled to up to one year of sick leave, which is compensated at 100% of the employee’s salary for the first three days of sickness. Following this, the employee will be compensated by Uruguay’s social security system, Banco de Previsión Social (BPS) at 70% of the employees’ average earnings.
Maternity Leave
Employees are entitled to 14 weeks (98 days) of maternity leave, paid by the Social Security Bank. The leave begins six weeks before the expected date of delivery (42 days prepartum) and extends up to eight weeks after delivery (56 days postpartum).
Paternity Leave
Employees are entitled to 13 days of paid paternity leave from the day of delivery. The first three days are paid by the employer and the following 10 are paid by the Social Security Bank.
Adoption Leave
Adoptive fathers are entitled to three days of adoption leave from the day of minor possession or notification of the adoptive legitimation judgment. After the initial three days, either parent can take a special leave for adoption or adoption legitimation for up to six continuous weeks or 42 days.
| Paid Leave | Leave Length |
| Study Leave | Up to 12 days |
| Marraige Leave | 3 days |
| Bereavement Leave | 3 days |
There is no statutory provision for unpaid leave.
In Uruguay, an employer contributes a total of 12.625% towards the social security system, as follows:
| Benefits | Employer Contributions |
| Retirement | 7.5% |
| Health Insurance | 5% + CCM* if applicable |
| Labor Reconversion Fund | 0.1% |
| Labor Credit Guarantee Fund | 0.025% |
*Complemento de Cuota mutual (CCM)
Employers contribute 5% to health insurance.
The National Integrated Health System regulates the right to health protection of all the country’s inhabitants, through a National Health Insurance (Seguro Nacional de Salud, SNS), financed by the National Health Fund (Fondo Nacional de Salud, Fonasa).
Complemento de Cuota mutual (CCM) arises from the difference between the value of the mutual contribution for the number of beneficiary workers and the basic contribution of all dependent personnel.
Accident insurance to cover work accidents and occupational illnesses is compulsory for private-sector and public-sector employees performing manual activities under risky conditions.
Employers contribute 0.1% to the Labor Reconversion Fund (FRL).
Labor Reconversion Fund (Fondo Reconversión Laboral, FRL) serves to retrain those who are unemployed, through the National Institute of Employment and Professional Training (INEFOP).
Employers contribute 7.5% to employees’ retirement.
Uruguay has a mixed pension regime, consisting of two contribution tranches that complement each other: the solidarity regime of the Social Security Bank and the individual savings regime administered by the Administrators of Social Security Savings Funds (AFAP).
The minimum retirement age of workers was introduced depending on the date of birth and the number of years of contribution to date, with the retirement age ranging from 63 to 65 years of age: those born in 1973 will retire at 63 in 2036, those born in 1974 will retire at 64 in 2038 and those born in 1975 will retire at 65.
Employers contribute 0.025% to the Labor Credit Guarantee Fund.
It is a benefit that is granted to employees or former employees with unpaid work credits, verified by judicial means, due to the insolvency of the company.
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
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