How to hire and pay EMPLOYEES IN


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Before hiring


Before hiring employees in Uruguay, there are a few important things you’ll need to know. Firstly, in Uruguay, employees are entitled to 12 weeks of fully paid maternity leave, which can be split into six weeks before and six after the birth. This is paid by the Institute of Social Security.

It’s also important for employers to know that in Uruguay, the required notice period is something that must be agreed upon by employer and employee in the employment contract. 

We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in Uruguay below.

At a Glance









(based on region;
see here



of gross salary

13th / 14th SALARY

A 13th salary called Aguinaldo is mandated by law and is paid in two installments (June and December).

Good to know

  • Employees in Uruguay receive a 13th salary called Aguinaldo. It is mandated by law and is paid in two installments: June and December.
  • Employees are entitled to 20 days’ annual leave. From the fifth year of service, employees get an extra leave day, and then every four years another day is added, up to a maximum of 25 days.
  • In addition to the regular pay during leave, employees are entitled to receive an additional amount called “vacation salary.” Technically this means “amount for the better enjoyment of the annual leave,” equal to 100% of the net vacation daily wage.

Employment in


Working hours and overtime

Employees in Uruguay work eight hours a day, 48 hours per week.

Overtime work on a working day is paid at the rate of two times of regular salary. Work on public holidays or non-working days is paid at two and a half times of an employee’s regular compensation.

Employment contracts
Probationary period

In Uruguay, the probationary period is three months.

Notice period

The notice period must be agreed upon in the employment contract.

IP protection and non-compete agreements

Non-compete clauses must be agreed upon by employer and employee, and must be limited in scope. The employee must receive appropriate compensation, and the term of the clause after termination of the labor relationship must be no longer than 36 months.

Calculate costs to hire internationally


View a list of recognized public holidays in Uruguay here.

View a list of recognized public holidays in Uruguay here.

Employer tax

Employers in Uruguay are required to pay 12.625% on top of an employee’s salary in social contributions. This includes:

  • Health Insurance: 5%
  • Labour Re-conversion Fund: 0.1%
  • Pension Fund: 7.5%
  • Labour Credit Guarantee Fund: 0.025%

Individual tax

In Uruguay, employees pay between 0% and 36% in taxes depending on their income bracket. They also pay between 18.1% and 23.1% in social security. 

Termination of employment

Employers in Uruguay have the right to terminate employees, but must provide a notice period as well as severance pay.

Terminated employees (except those dismissed for serious misconduct) are entitled to severance payments, the amount of which is equivalent to one month's salary for every year worked, up to a maximum of six months' salary. This includes holiday pay, other benefits, commissions, and aguinaldo.

Start hiring employees in


Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

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