Global PEO in Uruguay
As an employer looking to expand or exploit new business opportunities, it can be difficult to find, hire and pay talent in Uruguay.
The process can be time-consuming thanks to the complex web of cross-border payroll laws and local compliance regulations. Do you know what an ‘Aguinaldo’ is? Probably not, so it’s a good job you’re here reading this guide.
The professional employer organization (PEO) services on offer from Skuad can be the perfect solution for companies looking to expand into Uruguay. We take the guesswork out of compliance and culture issues to help your business succeed.
What is a PEO?
A PEO is on hand to provide HR outsourcing services to businesses of all sizes in all sectors.
PEOs can help an organization to set up in other countries with a variety of HR-related tasks, including payroll, benefits administration, compliance with employment laws, and recruiting. The impact of which helps save time, cost, stress, and costly compliance mistakes.
With the help of a PEO, you can build a global team with employees working remotely from any country in the world, including Uruguay. Your PEO provider will ensure that all of your international employees and contractors receive their monthly/weekly salary in the correct currency and in line with local requirements.
Skuad is a global PEO and our team knows what it takes to build a team in Uruguay. Drop us a line today to ask any questions or keep reading for what to expect when working with a PEO.
What are the benefits of using a PEO provider in Uruguay?
Why should a business choose to partner with a PEO provider in Uruguay? Here are just some of the benefits available…
Hiring the best talent from Uruguay (and beyond)
By working with an experienced PEO, you’re able to hire the best talent for the job. You can also rest assured the hiring process is water-tight and that local laws have been complied with.
Bring on a PEO to help you hire in Uruguay today and that same PEO service can also help you hire in Honduras, Holland, Hungary, and most other places across the world. Simplifying your team-building processes frees up your senior team members’ time to focus on activities that only they can lead on.
Be a globally competitive business
Remote working is here to stay — and companies that embrace hybrid structures are the ones who’ll attract the best talent to outperform their competitors. But do you know what it takes to attract the best talent available in countries across the globe?
This is where an experienced PEO can help. Skuad’s experts understand the nuance of global talent acquisition and can help you create attractive remuneration packages and stay one step ahead.
Save time and money
PEOs can save a business time and money by taking on the administrative burden of HR.
It’s also the PEO’s job to navigate the myriad employment laws and compliance regulations — and their in-country contacts and partners can be invaluable for businesses looking to expand their operations.
Become experienced in a new market
Uruguay is a great place to live and work. The cost of living is relatively low, there are plenty of job opportunities, and the quality of life is high. And while the national language is Spanish, English is widely spoken.
Uruguay is also a very safe country — ranked as the safest in South America by the Global Peace Index.
Could this country represent a new region for your business activities as well as hiring? Your new employees and contractors on the ground will be the best people to guide you!
Avoid setting up your own legal entity in Uruguay
Uruguay has a stable political environment, but the time- and cost-saving associated with hiring a PEO is every bit as true here in Uruguay as it is in other countries around the world.
If your company was to attempt global hiring without a PEO, you’d need to establish your own legal entity in each country you wanted to hire in. There are legal fees, banking charges, flights to and from for your leadership team, and more. The costs and months add up.
Book a Skuad demo today and see how quick and easy the alternative actually is.
Become culturally aware
If you're looking to do business in Uruguay, it's important to be aware of the country's culture and customs. Here are a few things to keep in mind:
- Uruguay has a diverse culture influenced by its European heritage as well as its indigenous and immigrant populations.
- Uruguayans are generally warm and welcoming, but they can also be quite formal.
- Business meetings in Uruguay usually follow a fairly corporate protocol. It's important to be punctual and to dress conservatively. Gifts are not typically given, but if you do give one, make sure it is appropriate.
- Uruguay has a strong tradition of gender equality, and women play an important role in business and government.
- Uruguayans generally prefer to do business with people they know and trust. It's important to take the time to build relationships.
Did you know that Uruguay is also one of the world's most progressive countries when it comes to LGBT rights? In 2013, Uruguay became the first country in Latin America to legalize same-sex marriage and has passed a law allowing transgender people to change their legal gender without undergoing any kind of surgery.
If you're looking for a progressive and inclusive country to do business in, Uruguay is a great option.
Ensure your business complies with Uruguay’s statutory requirements
To remain compliant with Uruguayan employment law, employers need to follow the legal guidelines. For example, they need to provide employees with a written contract that outlines the terms of their employment.
The contract should specify the employee's job duties, salary, and benefits.
In addition, employers need to withhold taxes from their employees' salaries and make social security contributions on their behalf under a ‘Pay As You Earn’ system.
Employers also need to comply with safety and health regulations in the workplace.
The specifics for businesses hiring talent in Uruguay include:
- All Uruguayan employees are paid in Uruguayan pesos
- Employees work between 44 hours and 48 hours per week
- Uruguayan law requires that employers provide their workers with a minimum wage, as well as health insurance and other benefits
- The tax rate in Uruguay ranges from 0% to 36%. This rate applies to both local and foreign employees
- Employers pay 12.625% of staff salary into pension and medical funds, while employees pay between 18.1% and 23.1%
- All staff must be registered with the Banco de Previsión Social (BPS).
Employers also need to be aware that the country has a tradition of paying an ‘Aguinaldo’. This is a bonus payment and is the equivalent of a month’s pay and is paid in two installments — in June and December.
- Uruguay has 12 national holidays and most businesses are closed on these days
- Uruguayan workers are entitled to 20 vacation days per year and this increases by one day for every five years of service (up to 25 days)
- Employees are entitled to up to one year of sick leave and, in special circumstances, up to 2 years
- Employers pay sick pay for the first three days and then employees are paid through the BPS. Maternity pay is also paid via the BPS.
- Women are entitled to 14 weeks of maternity leave. Six are taken before the baby’s due date and eight weeks are taken afterward
- Dads and partners are also entitled to 13 days of paid paternity leave.
Employee income taxes in Uruguay are:
- 0%: 0-409,080 Uruguayan Pesos (UYU)
- 10.00%: 409,080 UYU to 584,400 UYU
- 15.00%: 584,400 UYU to 876,600 UYU
- 24.00%: 876,600 UYU to 1,753,200 UYU
- 25.00%: 1,753,200 UYU to 2,922,000 UYU
- 27.00%: 2,922,000 UYU to 4,383,000 UYU
- 31.00%: 4,383,000 UYU to 6,720,600 UYU
- 36% on anything over 6,720,600.
Employees must also pay a proportion of their salary to:
- Retirement: 15% (Employers pay 7.5% into this fund).
- Health insurance: 3% to 8% (Employers pay 5%)
- Labor Restructuring Fund: 0.1% (Employers pay 0.1%)
- Labor Credit Guarantee Fund: 0% (Employers pay 0.025%).
In total, employees pay between 18.1% to 23.1% of their salary in extra taxes.
If you want to know more about how Skuad’s PEO services in Uruguay can help your business grow while ticking all the legal boxes, then request a demo today.
What does it cost to build a team in Uruguay?
Uruguay company registration and incorporation
The cost of setting up a business in Uruguay varies, depending on the type of company and the amount of share capital. Your chosen location will also have an impact with some regions having different laws on the creation of subsidiaries.
This can take a month — if not longer — to organize and cost up to $5,000. Some specialist consultants will charge much more.
There are also ongoing costs associated with maintaining a company overseas, such as additional annual filing fees, taxes, and the cost of auditing the financial statements.
Alternatively, you could partner with an experienced PEO provider in Uruguay.
PEO in Uruguay
When expanding your business into Uruguay, it is important to choose a professional employer organization that has the experience and knowledge necessary to help your business succeed.
Skuad has extensive experience helping businesses set up operations in Uruguay and can provide you with the support you need to get your business up and running quickly.
Better still, our PEO services start at just $19 per month — helping you build your team in Uruguay and almost anywhere else you need. We can act as your PEO in 160+ countries and counting. Why not take us for a test drive today?
Want to book in for a demo?
Hiring employees and contractors takes time and expert insight. The Skuad team can take all the hard work off your shoulders instead. Book in for a demo to appreciate how effective Skuad’s PEO solution today.