How do you hire an employee in Uruguay in 2026?
Uruguay sets no advance-notice period for ending a contract, and an employer can dismiss without giving a reason. What protects the worker is tariffed severance: 1 month of pay per year worked, capped at 6 months. Price that in before you make the offer.
· Uruguay guide
Illustration · Montevideo, Uruguay
The Uruguay hire process has five steps. Offer letter, work-authorisation check, written contract, BPS registration, first payday.
Every employee needs a written contract registered with BPS, the social security body, before they start. The standard pay cycle is monthly. The minimum wage is UYU 24,572/month, rising to UYU 25,383/month from 1 July 2026.
Uruguay pays a mandatory 13th-month salary, the aguinaldo, in two parts each year. One part lands by the end of June. The other lands in the 10 days before 24 December (Ley 12.840).
There is no advance-notice rule and no just-cause requirement to dismiss. Severance is fixed by law instead: 1 month of pay per year worked, up to 6 months (Ley 10.489).
What does the end-to-end Uruguay hire process look like?
Five steps take you from accepted offer to first payslip. Offer letter, work-authorisation check, written contract, BPS registration, first payday.
Register the employee with BPS before the start date. Onboarding cannot run cleanly until that record exists.
| Step | What happens | Owner | Timing |
|---|---|---|---|
| 1. Offer letter | Written offer with role, gross monthly salary, start date, working hours, and any conditions | Client / Teamed drafts | Same day after verbal accept |
| 2. Work-authorisation check | Confirm Uruguayan or Mercosur residence, or a valid work-linked residence permit for other foreign nationals, before the start date | Teamed | Before the employee starts |
| 3. Written employment contract | Signed written contract setting out pay, hours, leave, and the role under Uruguayan labour law | Teamed (legal employer) | On or before day one |
| 4. BPS registration | Register the worker with Banco de Prevision Social for pension, FONASA health, FRL, and FGCL contributions | Teamed | Before the start date |
| 5. First payday | First monthly payslip issued; pension at 15%, FONASA, FRL, and any IRPF withheld and remitted to BPS and DGI | Teamed | End of first payroll month |
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Issue the offer letter
Send a written offer the same day as verbal acceptance. Include role, gross monthly salary at or above UYU 24,572/month, start date, working hours, and the aguinaldo the worker will receive.
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Complete the work-authorisation check
Confirm Uruguayan or Mercosur residence by collecting the Cedula de Identidad, or verify work-linked residence for other foreign nationals before the start date. Retain copies of all documents.
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Issue the written contract
The signed written contract must be in place on or before day one. Teamed's standard Uruguay contract covers Uruguayan requirements. Clients choose the commercial terms; Teamed signs as the legal employer.
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Register the employee with BPS
Register the worker with Banco de Prevision Social for pension, FONASA health, FRL, and FGCL before the start date. Confirm the IRPF position, bank details, and chosen health provider.
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Issue the first payslip and file contributions
Run the first monthly payroll at the end of the first calendar month. Withhold pension, FONASA, FRL, and any IRPF, then remit to BPS and DGI. The employee receives their payslip and is on the payroll record.
What must a Uruguay offer letter include?
The offer letter sets expectations. It is not the binding contract.
Include role title, reporting line, start date, gross monthly salary at or above UYU 24,572/month, working hours capped at 8 hours a day, and the aguinaldo and leave the worker will receive.
Three points to get right in a Uruguayan offer letter:
- Quote a salary that respects the minimum wage rise. The national minimum is UYU 24,572/month and rises to UYU 25,383/month from 1 July 2026. An offer drafted in the first half of the year should account for the mid-year increase.
- State the aguinaldo clearly. The 13th-month salary is mandatory and paid in two parts. Spell out that it sits on top of the 12 monthly salaries so the candidate reads the full-year figure correctly.
- Set out working hours. The ordinary day is 8 hours and the industry week is 48 hours, with overtime paid at 200 percent of the ordinary rate. Make the pattern explicit so overtime is never a surprise.
Teamed's standard Uruguay offer letter covers all of this and aligns with Uruguayan labour law. Clients choose the commercial terms. Teamed holds the legal-employer position and issues the final contract.
Uruguay work-authorisation checks for foreign national employees
Uruguayan citizens and permanent residents can start without a permit. Mercosur nationals can obtain residence quickly. Other foreign nationals need work-linked residence before day one.
The employer must hold proof of residence or work authorisation on file before the worker starts.
Uruguayan citizens and residents
There is no separate work-authorisation check for Uruguayan citizens or permanent residents. The employer keeps a copy of the national identity document, the Cedula de Identidad, as a standard record. Nationals of Mercosur and associated states can obtain residence under the regional residence agreement, which gives them the right to work once granted.
Other foreign nationals
Foreign nationals from outside the Mercosur framework must obtain residence linked to work before they can be employed. Residence is processed through the Direccion Nacional de Migracion, and the employer collects the residence document and tax identification before the start date. Processing times vary, so allow several weeks when hiring from outside the region.
The Ministerio de Trabajo y Seguridad Social sets the labour rules that govern hiring in Uruguay, including working hours, leave, the aguinaldo, and dismissal. Every employer must follow them from the first day of employment.
Source: Ministerio de Trabajo y Seguridad Social (MTSS), labour rules
Keeping records current
Residence and work permits are time-limited. Employers must track expiry dates and start renewals early. Teamed monitors each permit and alerts the employee and client ahead of the renewal deadline so no lapse occurs.
The Uruguay written contract: what must it contain?
Uruguay has no single codified statement like the UK's Section 1 document. A clear written contract is still the standard and is registered with BPS.
Issue it on or before day one. It is the binding record of the terms.
What a Uruguay written employment contract should cover under Uruguayan labour law:
- Names and identification of both the employer and the employee
- Start date of employment
- Job title and a description of the work
- Place of work
- Gross monthly salary, at or above the national minimum of UYU 24,572/month
- Pay cycle, which is monthly for salaried staff
- The aguinaldo, paid in two installments each year (Ley 12.840)
- Working hours, capped at 8 hours a day and 48 hours a week in industry
- Overtime, paid at 200 percent of the ordinary rate and 250 percent on a public holiday
- Annual paid leave of 20 days, rising with seniority
- Sick pay funded through BPS at 70% of income under the rules
- Maternity leave of at least 14 weeks, funded through BPS
Probation in Uruguay is set by agreement between the parties rather than a fixed legal cap, so the contract should state the trial period and how it works. Teamed's standard Uruguay contract satisfies Uruguayan requirements. Clients choose the commercial terms. Teamed signs as the legal employer.
Key source: MTSS Regimen de licencia (Ley 12.590).
Onboarding admin in the first week
The first week covers contract signing, BPS registration, FONASA health enrolment, bank details, and the IRPF tax position.
Teamed handles the BPS and tax registrations. The client handles the operational side.
| Onboarding task | Who does it | Day |
|---|---|---|
| Written employment contract signed | Employee and Teamed | Day 0 or 1 |
| Work-authorisation check completed | Teamed | Day 0 (before start) |
| BPS registration for pension and FONASA | Teamed | Before start date |
| FRL and FGCL contributions set up | Teamed | Before start date |
| IRPF withholding position confirmed | Teamed | Days 1 to 7 |
| Bank account details collected for payroll | Teamed | Days 1 to 7 |
| Health provider (mutualista) choice confirmed | Employee and Teamed | Days 1 to 7 |
| Equipment and system access | Client | Days 0 to 1 |
| Manager introduction and first-week plan | Client | Days 0 to 7 |
| 30-60-90 day plan documented | Client (manager) | Days 1 to 14 |
How does Teamed handle Uruguay employment for you?
Teamed becomes your legal employer of record in Uruguay for from $599 per employee per month, with zero FX mark-up in any currency.
BPS contributions, FONASA health, the aguinaldo, and IRPF withholding all run on one platform.
Real HR and legal experts handle your Uruguay hires, from the first offer letter through every monthly BPS and DGI remittance. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice.
EOR payroll, contractor onboarding, and entity setup all live on one platform. A Uruguay contractor who converts to direct employment keeps their record. The EOR works until it isn't the cheaper option, and Teamed tells you when that point arrives. Run the Crossover Calculator to see when your Uruguay headcount is ready to graduate to your own entity. Start from the Uruguay hiring overview; each guide here takes one layer of Uruguayan employment law.
Key sources: MTSS labour rules, Banco de Prevision Social (BPS), and MTSS Despido regimen comun (Ley 10.489).
Frequently asked questions
How long does it take to hire someone in Uruguay through Teamed?
Teamed can onboard a Uruguayan citizen or resident within a few business days once the offer is accepted. The written contract must be signed on or before day one, and BPS registration is completed before the start date. Foreign nationals from outside the Mercosur framework need work-linked residence in place first, which adds lead time depending on the Direccion Nacional de Migracion processing queue.
Does Uruguay have a notice period for dismissal?
No. Uruguay sets no advance-notice period and an employer can dismiss without giving a reason, a system known as libre despido. The worker's protection is tariffed severance instead: 1 month of pay per year or fraction worked, capped at 6 months for monthly-paid staff (Ley 10.489). A 2025 bill before Parliament would add a notice requirement and a justified-cause test, but it is not yet law.
What is the minimum wage in Uruguay in 2026?
The national minimum wage is UYU 24,572/month from 1 January 2026 and rises to UYU 25,383/month from 1 July 2026 under Decreto N 319/025. For day or hour workers, the monthly figure is divided by 25 for the daily rate and by 200 for the hourly rate. Any offer drafted before July should account for the mid-year increase.
What is the aguinaldo and when is it paid?
The aguinaldo is Uruguay's mandatory 13th-month salary, equal to one-twelfth of the cash wages paid over the year (Ley 12.840). It is paid in two installments: the first by the end of June and the second in the 10 days before 24 December. It sits on top of the 12 monthly salaries, so budget for it as a separate cost.
What leave and benefits must a Uruguay employee receive?
Employees get at least 20 days of paid annual leave, rising by one day from the fifth year and one more every four years after that. There are 5 days paid public holidays, paid double if worked. Maternity leave is at least 14 weeks, funded through BPS, and sick pay runs at 70% of income under the rules.
What social security contributions apply to a Uruguay hire?
On the employee side, pension is 15%, FONASA health runs from 3% to 8% depending on income and dependents, and the FRL is 0.10%. On the employer side, pension is 7.50%, FONASA is 5%, the FRL is 0.10%, and the FGCL is 0.03%. All are remitted to BPS.
Companies new to Uruguay assume there must be a notice period before dismissal. There isn't. The protection sits entirely in tariffed severance of one month per year of service, capped at six. Budget for the severance from the first hire, because the bill arrives whether you saw it coming or not.
Uruguay lets you dismiss without notice or a stated cause. The cost is fixed: one month of pay per year worked, capped at six.
The aguinaldo is mandatory, paid in two parts, by end of June and before 24 December.
Contract and BPS registration come before day one. The minimum wage moves up mid-year.
