How to hire remote employees in

Uruguay

Found someone great in Uruguay and want to bring them onto the team? It’s a good thing you’re here. On this page, you’ll learn exactly what you need to know before making hires in Uruguay: Legal obligations, risks, and the easiest path to hiring great talent overseas.

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Employment requirements

Country snapshot

CURRENCY

Uruguayan Peso (UYU)

EMPLOYER TAXES

12.625%

PAYROLL FREQUENCY

Monthly

OFFICIAL LANGUAGE

Spanish

Why hire independent contractors in Uruguay

Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in Uruguay.

It’s the fastest way to hire globally

Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.

It’s a lot cheaper

It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.

It’s more flexible for you & your team

HHiring contractors in Uruguay means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.

Can be less risky than hiring employees

Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.

Some people want to be employees

The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.

You might not have as much control over your talent

Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.

What to know before you hire in Uruguay

So you want to hire in Uruguay. That’s good news! But you should know, from the start, that hiring in Uruguay is different than hiring in your home country. There are different labor laws, different regulations, and different systems for hiring people. If you don’t do things right, you’ll be putting your company at the risk of fines—and risk losing the talent you brought onboard.

If you want to successfully hire in Uruguay, you have two options:

Hire talent as contractors

Laws about hiring contractors are significantly more simple in Uruguay. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Thera for.

Hire talent as employees

This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in Uruguay is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.

Hire contractors in a couple clicks with Thera

How can I pay people in Uruguay

If you’re hiring contractors in Uruguay, you can pay them with Thera in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.

If you want to hire employees in Uruguay

If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Uruguay than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Uruguay.

Taxes in Uruguay

Employer tax

Employer Contributions

12.625%

Leave

Paid Time Off (PTO)

All workers have the right to 20 days’ annual leave. From the fifth year of work, an extra leave day is added, and then every four years another day is added, up to a maximum of 25 days.

The annual leave should be used in the year after which it was accrued. It  may be divided into two periods, the shorter of which may not be less than 10 days.

In addition to the worker’s regular remuneration during leave, the worker is entitled to receive an additional amount called “vacation salary” (technically “amount for the better enjoyment of the annual leave”), equal to 100% of the net vacation daily wage.

Public Holidays

There are 12 public holidays.

Sick Days

The first 3 days are paid in full by the employer and the fourth day onward is paid 70% by the institute of social security (BPS).

Maternity Leave

Female employees get six weeks before and eight weeks after the  birth as maternity leave, paid by the Institute of Social Security.

Paternity Leave

Fathers receive 10 days of leave.

Marriage Leave

None.

Bereavement Leave

None.

Termination

Termination Process

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

Notice Period

A notice of 1.5 weeks should be given.

Severance Pay

Employees are entitled to severance payments which includes one months salary for every year employed up to 6 months of salary.

Probation Period

Common practice to have a probation period of up to 3 months.

Employee requirements in Uruguay

Working Hours

A normal work week is 44 hours.

Overtime

Employees who exceed 44 hours in a week are entitled to overtime pay at 200% of the regular salary.

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