--- title: "Uruguay Tax and Payroll 2026 | IRPF, BPS, FONASA" description: "Uruguay payroll 2026: employer BPS pension 7.50% plus FONASA 5%, eight IRPF bands to 36%, tax-free below UYU 48,048/month." canonical: https://www.teamed.global/country-hiring-guides/uruguay/tax-and-payroll --- Uruguay · Tax & payroll child Served by Teamed vetted partner-entity network in Uruguay # How does *Uruguay payroll tax* work in 2026? Pay an employee in Uruguay below UYU 48,048/month and they owe no income tax at all. Above that line, IRPF climbs through eight bands, from 10% to a top rate of 36%. Underneath sits BPS social security, where the employer adds 7.50% for pension and 5% for health on every salary. Last reviewed 13 June 2026 · Uruguay guide ![Montevideo waterfront and the Rambla at golden hour with the Palacio Salvo rising over the old city.](/images/country-guides/uruguay-tax-payroll.webp) Illustration · Montevideo, Uruguay Answer.cite this Uruguay employer payroll in 2026 runs through BPS, the social security agency. The employer pays 7.50% for pension on every salary. The employer also pays 5% for FONASA health cover. The employee pays more from their own pay. Pension takes 15%. FONASA health takes between 3% and 8%, depending on income and family. A small Labour Reconversion Fund charge of 0.10% is taken on top. Income tax (IRPF) is charged on a sliding scale. Pay below UYU 48,048/month is tax-free. Above that, eight bands run from 10% up to 36%. Salaries are paid monthly, and the 13th-month aguinaldo is paid in two halves, in June and December. ## What does an employer pay in Uruguay payroll taxes? The employer pays BPS pension at 7.50% of salary. The employer also pays FONASA health at 5% of salary. Two small funds are added on top. The Labour Reconversion Fund takes 0.10%. The Labour Credits Guarantee Fund takes 0.025% (BPS). | Employer contribution | Rate | Applies to | | --- | --- | --- | | BPS pension (jubilatorio) | 7.50% | Gross monthly salary | | FONASA (health) | 5% | Gross monthly salary | | Labour Reconversion Fund (FRL) | 0.10% | Gross monthly salary | | Labour Credits Guarantee Fund (FGCL) | 0.025% | Gross monthly salary | ### BPS is the single collector BPS is the [Banco de Previsión Social](https://www.bps.gub.uy/), Uruguay's social security agency. The employer's largest line is the pension contribution at 7.50% of gross salary. On top of that the employer pays FONASA health at 5%, where a Complemento de Cuota Mutual may also apply for some workers. ### The two funds most employers forget Two smaller charges round out the employer cost. The Labour Reconversion Fund (FRL) takes 0.10% of salary, matched by the employee. The Labour Credits Guarantee Fund (FGCL) takes 0.025% and is paid by the employer alone ([BPS FGCL](https://www.bps.gub.uy/15668/fondo-de-garantia-de-creditos-laborales.html)). Both have run at these rates since January 2019. Add labour-risk insurance through BSE, the state insurer, and the full employer cost lands well above the pension headline alone. ## What comes off a Uruguay employee's salary? Three social security charges come off before income tax. Pension takes 15%. FONASA health takes 3% to 8%. The Labour Reconversion Fund takes a further 0.10%. The FONASA rate depends on income and whether the worker supports a spouse or children (BPS). | Employee deduction | Rate | Applies to | | --- | --- | --- | | BPS pension (jubilatorio) | 15% | Gross monthly salary | | FONASA (health) | 3% to 8% | Gross monthly salary | | Labour Reconversion Fund (FRL) | 0.10% | Gross monthly salary | ### Pension is the biggest deduction The employee pays 15% of gross salary into the BPS pension, the largest single line on a Uruguay payslip. This is the personal share of the jubilatorio that funds retirement. ### FONASA scales with the family FONASA is the health contribution. It is the one rate that moves per worker. A single earner below 2.5 BPC pays the minimum 3%. A higher earner who supports a spouse and children pays up to 8% ([BPS Tasas Fonasa](https://www.bps.gub.uy/10314/tasas-fonasa.html)). The Labour Reconversion Fund adds 0.10%. All three are taken before IRPF income tax is worked out, so the order of the calculation changes the tax due. ## Uruguay IRPF income tax bands for 2026 IRPF runs on a sliding monthly scale of eight bands. Pay below UYU 48,048/month is tax-free. Above that, rates rise from 10% through 15%, 24%, 25%, 27%, and 31%, to a top rate of 36% (BPS Comunicado R 5/2026). | Monthly income band | 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% | ### How the BPC scale works IRPF is the Impuesto a la Renta de las Personas Físicas, the personal income tax. The bands are set in BPC units, the Base de Prestaciones y Contribuciones the government revalues each year. For 2026 the tax-free minimum runs up to UYU 48,048/month, which is seven BPC. Each band above it is taxed only on the slice of pay that falls inside it, so the top rate of 36% touches only earnings above 115 BPC. ### Deductions and the order of the sum IRPF is charged on taxable pay, which is gross pay less allowable deductions. BPS social security, including pension and FONASA, comes off before IRPF is calculated, so the deduction order matters. Get the order wrong and the tax figure is wrong, even when every rate is right. Teamed's payroll applies the deductions in the correct order on every run, then files IRPF with the DGI tax authority. The 2026 bands take effect from January ([BPS Comunicado R 5/2026](https://www.bps.gub.uy/bps/file/23860/3/2026---comunicado-r-5---valores-escalas-irpf-2026.pdf)). ## How does Uruguay BPS and IRPF filing work? Employers run payroll monthly, then declare it to BPS through the nómina each month. BPS pension, FONASA, and the funds are paid to BPS. IRPF withheld from pay goes to the DGI tax authority. The salary itself must clear the UYU 24,572/month national minimum. BPS · Banco de Previsión Social Employers register each worker with BPS and file a monthly contribution return (the nómina). BPS pension at 15% from the employee and 7.50% from the employer, FONASA health, and the Labour Reconversion Fund are declared and paid together each month. Source: [BPS: tasas de aporte jubilatorio](https://www.bps.gub.uy/835/tasas.html) Uruguay payroll runs on a monthly cycle. Salaried pay is monthly, and BPS sets the daily and hourly rate by dividing the monthly figure by 25 and 200. The national minimum wage is UYU 24,572/month from January 2026, rising to UYU 25,383/month from July 2026. Each month the employer must: - **Declare the nómina** to BPS with every worker's pay and contributions - **Pay BPS** the pension, FONASA, FRL, and FGCL amounts due - **Withhold IRPF** from pay and remit it to the DGI tax authority - **Pay the aguinaldo** in two installments, by end of June and before 24 December A single late or wrong filing can touch several charges at once, because pension, health, and the funds all ride on the same monthly return. The minimum wage rises mid-year in 2026, so July payroll must apply the new UYU 25,383/month floor. 1. Collect pay data Gather monthly salary, any overtime, and taxable benefits for each worker before the run closes. 2. Apply BPS deductions Deduct the employee pension, FONASA, and the Labour Reconversion Fund first. These come off before income tax, so the order matters. 3. Calculate IRPF Apply the IRPF bands to taxable pay on the sliding scale, then subtract any allowable personal deductions to reach the tax withheld. 4. Add employer contributions Work out the employer pension, FONASA, FRL, and FGCL on top of the employee deductions already taken. 5. Declare and pay File the BPS nomina and pay the contributions, then remit IRPF to the DGI tax authority. Both run on the monthly cycle. ## Pension and social funds in the Uruguay payroll stack BPS pension is the core retirement contribution. The employee pays 15% and the employer pays 7.50% of salary. FONASA funds health, not retirement. It sits in the same monthly BPS return but pays for medical cover (BPS). The Uruguay payroll stack carries four contributions beyond income tax, all collected by BPS: - **Pension (jubilatorio)** is the largest. The employee pays 15% and the employer pays 7.50% of salary. Part of the personal contribution can be channelled to a private AFAP fund. - **FONASA** funds the national health system. The employer pays 5%. The employee pays 3% to 8%, set by income and family. - **Labour Reconversion Fund (FRL)** funds retraining for the unemployed. The employee and employer each pay 0.10%. - **Labour Credits Guarantee Fund (FGCL)** protects unpaid wages if an employer fails. The employer pays 0.025% alone. ### The aguinaldo is part of the cost Uruguay requires a 13th-month salary, the aguinaldo. It equals one twelfth of the cash wages paid over the year, and it is paid in two halves, by the end of June and in the ten days before 24 December ([MTSS aguinaldo](https://www.gub.uy/ministerio-trabajo-seguridad-social/politicas-y-gestion/derecho-reglamentacion-laboral/derecho-laboral-uruguayo/sueldo-anual-complementario-aguinaldo)). BPS contributions apply to the aguinaldo too, so it is a real annual cost on top of the monthly stack, not a free bonus. ## How does Teamed handle Uruguay payroll 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, IRPF, the aguinaldo, and the full Uruguay employment law stack run on **one platform**. **Real HR and legal experts** handle your Uruguay hires, from the first contract through every monthly BPS nómina and IRPF withholding. **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, so you see BPS pension, FONASA, and the two funds as separate lines, never a blended figure. EOR payroll, contractor onboarding, and entity setup all live on **one platform**. A Uruguay contractor who converts to payroll keeps their record. That same employee can **graduate** from EOR to your own Uruguay entity without switching systems. Run the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to see the full picture, including the July 2026 minimum wage rise to UYU 25,383/month. EOR is the right model for a first Uruguay hire, **until it isn't**. Start from [the Uruguay hiring overview](/country-hiring-guides/uruguay). Key sources: [BPS contribution rates](https://www.bps.gub.uy/835/tasas.html), [BPS IRPF scale 2026](https://www.bps.gub.uy/bps/file/23860/3/2026---comunicado-r-5---valores-escalas-irpf-2026.pdf), and the [Ministerio de Trabajo y Seguridad Social](https://www.gub.uy/ministerio-trabajo-seguridad-social/). ## Frequently asked questions What does an employer pay in Uruguay payroll taxes in 2026? The employer pays BPS pension at 7.50% of salary and FONASA health at 5%. Two smaller funds are added on top: the Labour Reconversion Fund at 0.10% and the Labour Credits Guarantee Fund at 0.025%, which the employer pays alone. Labour-risk insurance through the state insurer applies as well. What is deducted from a Uruguay employee's salary? Three social security charges come off before income tax: BPS pension at 15%, FONASA health at 3% to 8%, and the Labour Reconversion Fund at 0.10%. IRPF income tax is then charged on the taxable pay that remains. What are the Uruguay IRPF income tax bands for 2026? IRPF runs on a sliding monthly scale of eight bands. Pay up to UYU 48,048/month, which is seven BPC, is tax-free at 0%. Above that the rates are 10%, 15%, 24%, 25%, 27%, 31%, and a top rate of 36% on pay above 115 BPC. Each band taxes only the slice of pay inside it. How does Uruguay payroll filing work? Payroll runs monthly. The employer registers each worker with BPS and files a monthly contribution return, the nomina, covering pension, FONASA, and the funds. IRPF withheld from pay is remitted separately to the DGI tax authority. The salary must clear the national minimum of UYU 24,572/month, rising to UYU 25,383/month from July 2026. Does Uruguay have a 13th-month salary? Yes. Uruguay requires the aguinaldo, a mandatory 13th-month salary equal to one twelfth of the cash wages paid over the year. It is paid in two halves, by the end of June and in the days before 24 December. BPS contributions apply to the aguinaldo, so it is a real annual cost on top of the monthly payroll stack. How much does BPS pension cost in Uruguay? BPS pension, the jubilatorio, is the largest single payroll line. The employee pays 15% of salary and the employer pays 7.50%. Part of the employee's contribution can be directed to a private AFAP retirement fund. Pension sits in the same monthly BPS return as FONASA and the funds. Teamed Legal Operations The most common Uruguay payroll mistake we see is treating the employer cost as the pension rate alone. BPS pension is only the start. FONASA, the Labour Reconversion Fund, the Labour Credits Guarantee Fund, labour-risk insurance, and the aguinaldo all stack on top. Miss one and the budget you set for a Montevideo hire is wrong before the first payslip runs. A note from Tom Price-Daniel Uruguay payroll starts tax-free below UYU 48,048/month, then climbs through eight IRPF bands to 36%. Underneath, BPS takes pension, FONASA, and two funds, all on one monthly return. Add the aguinaldo before you set a budget. Tom Price-Daniel · Co-founder, Teamed ## Related Uruguay guides - [Hiring in Uruguay, overview](/country-hiring-guides/uruguay)parent - [Termination and severance in Uruguay](/country-hiring-guides/uruguay/termination-and-severance)sibling - [Cost breakdown for Uruguay](/country-hiring-guides/uruguay/cost-breakdown)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 Banco de Previsión Social (BPS), the Dirección General Impositiva (DGI), and the Ministerio de Trabajo y Seguridad Social, or speak to a qualified professional, before relying on any specific framework. The national minimum wage rises mid-year in 2026, from the January figure to a higher rate from 1 July 2026, and the IRPF bands are set in BPC units that are revalued each year.