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Compensation & Benefits in UyUruguay.

Population

3,286,314

Languages

1.

Spanish

Country Capital

Montevideo

Currency

Uruguayan peso (UYU)

Your employees expect and deserve the best. While providing the minimum Uruguay compensation laws will ensure that you stay compliant, going above and beyond will encourage your employees to stay with your company. The same is true about your Uruguay benefits management plan, but many companies do not have the time or knowledge to focus on hiring while dealing with so many other tasks.

G-P offers Uruguay compensation and benefits outsourcing to all companies looking to expand to the country. Instead of worrying about meeting the applicable laws, we’ll act as the Employer of Record to shoulder compliance. By adding your employees to our payroll and benefits plan, you can work fast and start benefitting from your new location right away.

Uruguay Compensation Laws

Uruguay’s minimum wage is 17,930 Uruguayan pesos per month as of January 1, 2021. Employees typically work 40 hours a week. Any overtime work should get paid at two and a half times the employee’s regular compensation. All employees are also entitled to Aguinaldo, which is an annual bonus payment also known as a 13th salary. This bonus should equal one month’s salary and be paid in two installments — one in June and the other in December.

Guaranteed Benefits in Uruguay

Your employees must receive guaranteed and supplemental benefits as soon as they start working for your company. For example, paid time off has to include 20 vacation days after the employee’s first year and one additional vacation day for every five years of service, and after that 1 day every 4 years. Uruguay also has five public holidays that employees should get paid time off.

Employers do not have to provide sick leave, so instead, employees can get paid sick time through the Institute of Social Security (BPS). Maternity leave is also provided through BPS. New mothers get 12 weeks of paid leave — six before the due date and six after. Male employees should get ten days of paid time off after the birth of a baby which is paid by BPS; in addition to the 3 days paid by the employer.

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Uruguay Benefits Management

Once you meet Uruguay’s compensation laws and provide the statutory minimums as part of your Uruguay benefits management plan, you can choose to provide market norm benefits to show employees you care. For example, Uruguay has more than five annual holidays. However, not all of those days warrant paid time off. You can provide time off for those holidays and give employees more supplemental benefits, such as performance-based bonuses and private health insurance.

Restrictions for Benefits and Compensation

Your company cannot give any employee compensation or benefits until you incorporate in Uruguay. The other option is Uruguay compensation and benefits outsourcing with G-P. Instead of spending weeks or months of your time setting up a subsidiary, you can use our existing infrastructure to work fast. You can trust our team to handle compensation and benefits while you spend your time working on your business.

Uruguay Employee Benefits Plans

Creating an effective benefits program offers several advantages for your company. Along with strengthening your recruiting and hiring, your benefits scheme can help improve retention.

When you demonstrate your appreciation for your employees with thoughtful provisions that help meet their needs, you support their long-term success in your company. Your employees will be equipped to contribute more to the team, navigate challenges, and pursue professional and personal goals. With a well-developed team, your company as a whole can achieve more.

You might offer provisions like these to help support your employees:

  • Ongoing learning opportunities
  • Childcare and education assistance
  • Pension
  • Health and wellness resources

Requirements for Employee Benefits in Uruguay

Before providing any fringe benefits, ensure you’ve met the minimum provisions required by the country’s labor laws. These include:

  • Annual leave
  • Sick leave
  • Maternity leave
  • Paternity leave
  • Public holiday leave
  • 13th-month bonus

How to Design Your Employee Benefits Program

While you can expect each country to have unique requirements for benefits, having a consistent strategy will help you navigate the planning process anywhere you go.

1. Evaluate Your Finances and Goals

Assess your available resources and set a sustainable budget for your benefits plans. Discuss top program goals, such as employee recruitment or retention, to help you prioritize spending as you begin planning.

2. Research the Market

To compete in the market, you need to understand local economic conditions. Research current trends and see what other businesses in the area offer employees in their benefits programs. See if you can match or exceed those provisions.

You might also want to interview local employees about the top benefits they want from employers.

3. Set up Your Program

With your budget in mind, you can create a plan. Build the mandatory benefits into your program first and use the remaining funds to support highly desired fringe benefits. Remember that administration costs, outsourcing expenses, and employee contributions may affect your final program costs.

Average Cost of Benefits Per Employee

Every company’s program costs will vary depending on factors like operating scale and budget. An average cost may not be a useful metric in your planning, but you can estimate your expenses based on your own budget and program objectives.

One way to sustainably build your program is to fund it with a set percentage of yearly revenue. As your income grows, you can increase your program spending accordingly.

How to Calculate Employee Benefits

For mandatory benefits, ensure that you meet or exceed the required pay rates for each employee. Pay for annual leave may increase depending on an employee’s length of service with your company.

When you plan supplemental benefits, you can make your calculations based on competitive rates.

How Are Employee Benefits Taxed in Uruguay?

Essentially all benefits with monetary value are taxable under local laws. The mandated and supplemental provisions you give employees will be classified as part of their yearly income.

Employee Health Benefits in Uruguay

The country’s National Integrated Health System includes state-sponsored public healthcare and private-sector care. As an employer, you are not responsible for providing health insurance coverage options for employees.

How G-P Can Help Scale Your Team in Uruguay

G-P’ Global Growth Platform™ helps you build and scale an international team quickly and easily, ensuring all benefits offered to candidates are compliant and in line with local regulations. Learn more about our platform and request a proposal today.

Disclaimer

THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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