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Setting up and running a payroll in Uruguay
If your business is planning to expand into the South American country of Uruguay, one of the first things you will need to do is start hiring a local workforce. This generally means you will need to establish a legal entity in the country, set up a payroll, and follow various other complex procedures. This can take weeks, potentially delaying your expansion efforts and cutting into your budget.
At Horizons, we provide comprehensive Uruguay payroll outsourcing for organizations of all kinds. We will set up and run your Uruguay payroll, giving you full flexibility to focus on expanding your Uruguayan operations, whether or not you have an official entity established in the country.
Why choose the Horizons payroll solution?
If you have an entity
If your company already has a legal entity registered in Uruguay, then Horizons’ experts can help you with the next steps. Our team will set up and manage your payroll, as well as any associated HR and compliance work to help you focus on the important job of expanding your business in Uruguay.
If you don’t have an entity
We also provide full support for organizations yet to establish an entity in Uruguay. In these cases, we can offer our Uruguayan subsidiary to act as employer of record for your employees. In addition to this, we will set up and manage your payroll in Uruguay, along with associated administration work.
This level of outsourcing is ideally suited to any organization looking for a flexible, low-risk, and scalable route to doing business in Uruguay.
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Uruguay payroll guide
Taxation and withholdings in Uruguay
The income tax system in Uruguay is progressive, with rates of between 0% and 36% depending on income level.
The corporate tax rate in Uruguay is generally 25%.
|
Health Insurance
|
5%
|
|
Labor Re-conversion Fund
|
0.1%
|
|
Pension Fund
|
7.5%
|
|
Labour Credit Guarantee Fund
|
0.025%
|
|
Total Employment Cost
|
12.625% |
|
Pension Fund
|
15%
|
|
Health Insurance
|
3%-8%
|
|
Labor Re-conversion Fund
|
0.1%
|
| Total Employee Cost | 18.1-23.1% |
|
0-379,596 Pesos
|
0%
|
|
379,596 – 542,280 Pesos
|
10.0%
|
|
542,280 – 813,420 Pesos
|
15%
|
|
813,420 – 1,626,840 Pesos
|
24%
|
|
1,626,840 – 2,711,400 Pesos
|
25%
|
|
2,711,400 – 4,067,100 Pesos
|
27%
|
|
Above 4,067,100 Pesos
|
31% – 36% |
Entitlements and terminations rules in Uruguay
There is no legally mandated minimum notice period for terminations in Uruguay, but it is good practice to offer one. Severance payments usually equal one month of salary for every year with an employer, up to six months of pay in total.
How to establish an Uruguay payroll
You may choose to establish an internal payroll in Uruguay, but this is a time-intensive option that can be very difficult to execute in practice, with language barriers, cultural differences, and frequently changing regulations getting in the way. The simplest option is to outsource your Uruguay payroll setup and management.
At Horizons, we provide full Uruguay payroll outsourcing, taking care of everything for you to ensure your organization is compliant and well-equipped to successfully expand into the country. For organizations without an entity in Uruguay, we can also provide our Uruguayan subsidiary to act as employer of record for your hires.
Manage payroll in Uruguay
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.
