--- title: "Uruguay Employer Cost Breakdown 2026 | BPS, FONASA" description: "Uruguay employer cost 2026: pension at 7.5%, health (FONASA) at 5%, plus a mandatory 13th salary. Line-by-line of what a Uruguay hire really costs." canonical: https://www.teamed.global/country-hiring-guides/uruguay/cost-breakdown --- Uruguay · Cost breakdown child Served by Teamed vetted partner-entity network in Uruguay # How much does it really cost to *hire in Uruguay* in 2026? Employer social charges in Uruguay run light. Pension costs you 7.5%, health (FONASA) 5%, and two small funds add a fraction of a percent. The bigger line is the mandatory 13th salary, the aguinaldo, worth 1 month of pay spread across the year. Last reviewed 13 June 2026 · Uruguay guide ![Montevideo waterfront at golden hour with the Rambla curving along the River Plate and low pastel buildings catching warm evening light.](/images/country-guides/uruguay-cost-breakdown.webp) Illustration · Montevideo, Uruguay Answer.cite this Hiring in Uruguay adds little on top of gross salary. The employer pays pension at 7.5%. It pays health (FONASA) at 5%. Two small funds, FRL and FGCL, add 0.1% and 0.025%. The cost most people forget is the aguinaldo. This is a mandatory 13th salary worth 1 month of pay. You pay it in two halves, one in June and one in December. Build it into the annual cost from day one. Every worker gets 20 days of paid annual leave. There are 5 days fully paid public holidays. The minimum wage is UYU 24,572/month from January 2026 and rises to UYU 25,383/month from July 2026. ## The headline: what a Uruguay hire actually costs Start with gross salary. Add employer pension at 7.5%. Add health (FONASA) at 5%. Add the FRL fund at 0.1% and the FGCL fund at 0.025%. Then add the aguinaldo. This is a 13th salary worth 1 month of pay, spread across the year. The table below is illustrative. It is computed from verified statutory rates, not a statutory figure itself. Uruguay's employer charges are modest by regional standards. The four mandatory employer contributions together add roughly 13% to gross salary. The aguinaldo adds the equivalent of one month's pay across the year, which works out near another 8% of annual gross. There is no separate employer health top-up beyond the base FONASA rate at the standard salary level. | Line | Illustrative cost on a monthly gross salary | Source | | --- | --- | --- | | Gross salary | Per contract | Contract | | Employer pension (aporte jubilatorio patronal) at 7.5% | 7.5% of gross | [BPS: tasas de aporte jubilatorio](https://www.bps.gub.uy/835/tasas.html) | | Employer health (FONASA aporte patronal) at 5% | 5% of gross | [BPS: Tasas Fonasa](https://www.bps.gub.uy/10314/tasas-fonasa.html) | | Labour Reconversion Fund (FRL) at 0.1% | 0.1% of gross | [BPS: Fondo de Reconversión Laboral](https://www.bps.gub.uy/10322/fondo-reconversion-laboral-frl.html) | | Labour Credits Guarantee Fund (FGCL) at 0.025% | 0.025% of gross | [BPS: Fondo de Garantía de Créditos Laborales](https://www.bps.gub.uy/15668/fondo-de-garantia-de-creditos-laborales.html) | | Aguinaldo (13th salary): 1 month of pay per year, paid in two halves | Equivalent to one month's pay across the year | [MTSS: Sueldo Anual Complementario](https://www.gub.uy/ministerio-trabajo-seguridad-social/politicas-y-gestion/derecho-reglamentacion-laboral/derecho-laboral-uruguayo/sueldo-anual-complementario-aguinaldo) | | Annual leave: 20 days per year (paid, employer cost built into salary) | Included in salary | [MTSS: Régimen de licencia](https://www.gub.uy/ministerio-trabajo-seguridad-social/institucional/derecho-laboral-uruguayo/regimen-licencia) | | Mandatory pension beyond BPS | None (BPS is the state scheme) | N/A | These figures are illustrative. They are computed from the 7.5% employer pension rate, the 5% FONASA rate, and the 0.1% FRL and 0.025% FGCL fund rates, all on gross salary. They are not statutory figures. The aguinaldo equals one-twelfth of total cash wages paid over the prior year, so it scales with actual pay rather than a fixed percentage. Add Teamed from $599 per employee per month and the total rises. Use the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to run your own salary figures. 1. Start with gross salary Confirm the agreed gross salary in Uruguayan pesos. This is the base number every contribution and the aguinaldo build on. 2. Add the four employer contributions Apply employer pension, FONASA health, the FRL fund, and the FGCL fund to gross salary. Together they add roughly thirteen percent. 3. Accrue the aguinaldo across the year Set aside one-twelfth of cash wages each month for the 13th salary. It pays out in two halves, one in June and one in December. 4. Model leave and overtime as real costs Annual leave is built into salary, but overtime carries a heavy premium. Budget expected overtime hours before you set the rate. 5. Plan severance from the first hire Free dismissal means a fixed payout when a contract ends. Build a severance reserve into headcount planning from day one. ## BPS and FONASA: the employer contributions All four employer contributions go to BPS, the social security agency. Pension is 7.5% of gross. Health (FONASA) is 5% of gross. Two small funds top it off. The FRL training fund is 0.1%. The FGCL wage-guarantee fund is 0.025%. The employee pays their own share on top, deducted from gross pay. ### Employer pension (aporte jubilatorio patronal) The employer contributes 7.5% of gross salary to the BPS pension scheme for workers in Industry and Commerce. The employee contributes a further 15%, deducted from their own pay. Both feed the same retirement system. There is no separate occupational pension you must fund beyond BPS. ### Employer health (FONASA aporte patronal) FONASA is the national health fund. The employer contributes 5% of gross salary. The employee's own FONASA contribution depends on income and family. It runs from 3% for a lower earner with no dependents to 8% for a higher earner with a spouse and children. The employer rate stays flat at 5% regardless of the worker's situation. BPS Uruguay · employer contribution rates 2026 Employer pension (jubilatorio patronal): **7.5%** of gross. Employer health (FONASA patronal): **5%** of gross. FRL training fund: **0.1%**. FGCL wage-guarantee fund: **0.025%**. The employee pays pension at **15%** plus FONASA from their own pay. Source: [BPS: tasas de aporte jubilatorio](https://www.bps.gub.uy/835/tasas.html) and [BPS: Tasas Fonasa](https://www.bps.gub.uy/10314/tasas-fonasa.html) ### The two small funds The Labour Reconversion Fund (FRL) takes 0.1% from the employer and a matching 0.1% from the worker, in place since January 2019. It funds retraining for the unemployed. The Labour Credits Guarantee Fund (FGCL) takes a further 0.025% from the employer only. It backstops unpaid wages if a company becomes insolvent. Both are small but mandatory on every payroll run. ### No mandatory pension beyond BPS Uruguay runs a mixed public and private pension system through BPS and the AFAP fund managers. The employer's only retirement obligation is the 7.5% BPS contribution. Any benefit above that is contractual, not required by law. For cost modelling, treat the retirement line as the BPS pension contribution and nothing more, unless the contract adds a private top-up. ## IRPF: what the employer withholds from each salary Uruguay taxes wages through IRPF, a progressive system with eight bands. Income up to UYU 48,048/month is tax-free. The first taxable band is 10%. The top rate reaches 36% on the highest salaries. The employer withholds IRPF from each pay run and remits it to BPS. IRPF on employment income is the employer's main monthly withholding job in Uruguay. Every pay run, the employer calculates the tax for each worker, deducts it, and remits it. IRPF is the worker's cost, not the employer's. It becomes an employer problem only when a calculation or a remittance goes wrong. ### The 2026 IRPF bands for employment income The eight progressive bands below apply for the 2026 tax year, set against the BPC reference unit. The first UYU 48,048/month of monthly income is the general non-taxable minimum and carries no tax. | Monthly income band | Marginal rate | | --- | --- | | Up to UYU 48,048/month (7 BPC) | 0% | | Over 7 to 10 BPC | 10% | | Over 10 to 15 BPC | 15% | | Over 15 to 30 BPC | 24% | | Over 30 to 50 BPC | 25% | | Over 50 to 75 BPC | 27% | | Over 75 to 115 BPC | 31% | | Over 115 BPC | 36% | Source: [BPS Comunicado R 5/2026: IRPF scales (vigencia 1/2026)](https://www.bps.gub.uy/bps/file/23860/3/2026---comunicado-r-5---valores-escalas-irpf-2026.pdf) The top marginal rate is 36% on the highest salaries. Workers can deduct certain personal items, which lowers the effective rate below the headline band. The employer's job is to apply the official scale, withhold the right amount, and remit it on time. Get the withholding wrong and the liability lands on the employer, not the worker. ## Leave, the 13th salary, and sick pay Every worker gets 20 days of paid annual leave a year. That rises by one day from the fifth year of service and one more day every four years after that. On top sit 5 days fully paid public holidays and the aguinaldo, a 13th salary worth 1 month of pay. Sick pay runs at 70% of income through BPS. Uruguay's leave and bonus rules sit in long-standing labour law. Most are funded by the employer or built into the salary cost. ### Annual leave The statutory minimum is 20 days of paid annual leave per year for all private-sector workers, under Ley 12.590. The entitlement grows by one day from the fifth year of service, then one more day every four years after that. Unused leave is paid out when the worker leaves. Budget the 20 days as built into the salary cost, not as an add-on. ### Public holidays There are 5 days fully paid public holidays in Uruguay: 1 January, 1 May, 18 July, 25 August, and 25 December. A worker who is off on these days is paid as if working. A worker who works one of them receives double pay. Other commemorative days exist but are not in the fully paid statutory set. ### The aguinaldo (13th salary) The aguinaldo is mandatory under Ley N.º 12.840. It equals 1 month of pay, calculated as one-twelfth of all cash wages paid over the prior year. You pay it in two halves. The first half is due by the end of June. The second half is due in the ten days before 24 December. Because it scales with actual pay, overtime and bonuses raise the aguinaldo too. ### Sick pay and maternity Sick pay is funded through BPS at 70% of income under the agency's rules, not paid directly by the employer beyond the contribution already made. Maternity leave is at least 14 weeks, with the salary funded through BPS up to a capped amount under Law 19.161. The employer's role is to keep the position open and remit contributions correctly. ## The costs that do not appear on a monthly payslip Three items sit outside the standard monthly contribution. They are real and they can be large. Severance on dismissal, the overtime premium, and the free-dismissal rule each shape the true cost of a Uruguay hire more than the headline contribution rate does. ### Severance on dismissal Uruguay uses a free-dismissal system. An employer can end a permanent contract without giving a legal reason, but it must pay a fixed severance. For a monthly-paid worker, severance is 1 month of total pay for each year or part-year worked, capped at 6 months of pay (Ley 10.489). For a day-worker, the rule is 25 days of pay per year once 240 days are worked in the year, capped at 150 days of pay. A day-worker who has not yet worked 100 days earns no severance right at all. Budget severance from the first hire, not the first exit. MTSS Uruguay · despido régimen común Monthly-paid worker severance: **1 month** of total pay per year or part-year, capped at **6 months** of pay. Day-worker severance: **25 days** of pay per year once 240 days are worked, capped at **150 days** of pay. No right arises below **100 days** worked. Source: [MTSS: Despido régimen común (Ley 10.489)](https://www.gub.uy/ministerio-trabajo-seguridad-social/institucional/derecho-laboral-uruguayo/despido-regimen-comun) ### No statutory notice, for now Uruguay has no statutory notice period before a dismissal. The employer pays the fixed severance and the contract ends. A bill before the Senate would introduce a short notice requirement and a justified-cause test, but it is not yet law ([Parlamento](https://parlamento.gub.uy/noticiasyeventos/noticias/senadores/752432)). Watch it if you plan multi-year roles, because it would change the cost of ending one. ### The overtime premium Overtime is expensive in Uruguay. Hours beyond the 8 hours ordinary day, or beyond the 48 hours weekly cap in industry, are paid at 200% of the normal rate. Work on a public holiday or non-working day is paid at 250%. A role with regular overtime can cost far more than its base salary suggests, so model expected hours before you set the rate. ### Minimum wage compliance The national minimum wage is UYU 24,572/month from 1 January 2026, rising to UYU 25,383/month from 1 July 2026 (Decreto N.º 319/025). Check any hire near the floor against the current decree, because the mid-year rise lands inside the 2026 calendar year and is easy to miss. ## How Teamed handles Uruguay employment costs for you Teamed becomes your legal [employer of record](/lp/employer-of-record) in Uruguay for [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency. BPS pension, FONASA health, FRL, FGCL, IRPF withholding, and the aguinaldo all run on **one platform**. **Real HR and legal experts** handle your Uruguay hires from the first offer letter through every BPS remittance and IRPF return. **An actual person**, not a chatbot or a pooled queue. There is **no setup fee** and **no exit fee**. Every employer cost **passes through at cost, itemised** on every invoice. You see the pension line, the FONASA line, the aguinaldo accrual, and any leave liability. Nothing is buried inside the management fee. EOR payroll, contractor onboarding, and entity setup all live on **one platform**. A Uruguay contractor who converts to employment keeps their record. That same worker can **graduate** to your own Uruguayan entity without switching systems. EOR is the right structure for a first Uruguay hire, **until it isn't**. Teamed tells you when the model no longer fits. Start from [the Uruguay hiring overview](/country-hiring-guides/uruguay) or run the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to see the full picture. ## Frequently asked questions What does it cost to hire an employee in Uruguay in 2026? The employer pays four social contributions on gross salary: pension at 7.5%, health (FONASA) at 5%, the FRL fund at 0.1%, and the FGCL fund at 0.025%. Together that is roughly 13 percent of gross. On top sits the aguinaldo, a mandatory 13th salary worth 1 month of pay across the year. Add Teamed from $599 per employee per month for the full employer-of-record service. What is the aguinaldo and how is it calculated? The aguinaldo is a mandatory 13th salary in Uruguay, worth 1 month of pay. It equals one-twelfth of all cash wages paid to the worker over the prior year, so it scales with overtime and bonuses. You pay it in two halves: the first by the end of June, the second in the ten days before 24 December. It is set by Ley N.º 12.840 and is not optional. How much social security does an employer pay in Uruguay? The employer pays 7.5% to the BPS pension scheme and 5% to the FONASA health fund, both on gross salary. Two smaller funds add 0.1% for the FRL training fund and 0.025% for the FGCL wage-guarantee fund. The worker pays their own pension share of 15% plus a FONASA share, deducted from their pay. What annual leave and public holidays apply in Uruguay? Every private-sector worker gets 20 days of paid annual leave a year, rising by one day from the fifth year of service and one more day every four years after that. There are also 5 days fully paid public holidays: 1 January, 1 May, 18 July, 25 August, and 25 December. Working a paid public holiday earns double pay. What is the severance pay rule in Uruguay? Uruguay uses free dismissal, so an employer can end a permanent contract without a legal reason but must pay fixed severance. For a monthly-paid worker, severance is 1 month of total pay per year or part-year worked, capped at 6 months of pay. For a day-worker, it is 25 days of pay per year once 240 days are worked, capped at 150 days. No severance right arises below 100 days worked. Does Uruguay have a minimum wage and is it changing in 2026? Yes. The national minimum wage is UYU 24,572/month from 1 January 2026 and rises to UYU 25,383/month from 1 July 2026, set by Decreto N.º 319/025. Because the increase lands mid-year, check any hire near the minimum against the current decree before you set the rate. Teamed Legal Operations The number that surprises people about Uruguay is not the social charge, which is light, but the aguinaldo. A mandatory 13th salary adds the equivalent of one month's pay across the year, and it scales with overtime and bonuses. Model it as a fixed annual line from day one, alongside the severance reserve that free dismissal makes inevitable. Get those two right and Uruguay is one of the more predictable markets in the region to budget. A note from Tom Price-Daniel Uruguay charges employers a light 7.5% for pension and 5% for health. The real line to plan for is the aguinaldo, a 13th salary worth 1 month of pay. Add free dismissal with fixed severance and a steep overtime premium, and the true cost lives off the monthly payslip. Know the contributions. Know the aguinaldo. Know the severance before you sign. Tom Price-Daniel · Co-founder, Teamed ## Related Uruguay guides - [Hiring in Uruguay, overview](/country-hiring-guides/uruguay)parent - [Uruguay tax and payroll](/country-hiring-guides/uruguay/tax-and-payroll)sibling - [Uruguay termination and severance](/country-hiring-guides/uruguay/termination-and-severance)sibling - [Employer of Record overview](/lp/employer-of-record)core - [Pricing, Zero FX Fixed](/pricing)core - [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost)tool - [Talk to an expert](https://www.teamed.global/contact)CTA A note on this page. This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction. Verify current requirements with the Ministerio de Trabajo y Seguridad Social (MTSS) and the Banco de Previsión Social (BPS) before relying on any specific figure. Worked examples in this guide are illustrative only and computed from statutory rates. They are not statutory figures. A bill before the Senate would introduce a notice period and a justified-cause test for dismissal; as at June 2026 it is not yet law, so employers should check its status before planning long-term roles.