Uruguay Severance Calculator 2026
Last updated: January 2026
The labor settlement (liquidación) in Uruguay for 2026 is calculated according to labor laws in Uruguayan pesos. Components include: severance (despido) of 1 month per year capped at 6 months, proportional vacation (licencia) of 20 business days/year after the first year, salario vacacional (vacation bonus equal to vacation pay), and proportional aguinaldo. The daily salary is monthly salary ÷ 30. Uruguay has unique features: the salario vacacional is a 100% bonus on vacation pay (effectively doubling vacation compensation), and the severance cap of 6 months is relatively low. Voluntary resignation excludes severance. All settlement components except severance are subject to BPS, FONASA, and IRPF deductions.
FAQ
What does a labor settlement include in Uruguay?
A settlement includes: despido/severance (1 month/year, max 6 months, dismissal only), proportional licencia/vacation (20 days/year), salario vacacional (100% bonus on vacation), and proportional aguinaldo. Voluntary resignation excludes severance.
How is severance (despido) calculated in Uruguay?
Severance equals 1 month of salary per year of service, capped at 6 months maximum. Partial years above 6 months count as a full year. Only applies for employer-initiated dismissal without just cause. The cap is relatively low compared to other countries.
What is the salario vacacional in Uruguay?
The salario vacacional is a unique Uruguayan benefit: an additional payment equal to 100% of vacation pay. Effectively, workers receive double their vacation salary — the regular vacation pay plus the salario vacacional. This applies to both taken vacation and compensated vacation in the settlement.
How many vacation days are in the settlement?
Uruguay grants 20 business days of vacation per year (after completing the first year). An additional day is added for every 4 years of service. Unused vacation is paid proportionally in the settlement, plus the salario vacacional (100% bonus).
Is the settlement taxable in Uruguay?
Severance (despido) is exempt from BPS and IRPF. However, proportional vacation, salario vacacional, and proportional aguinaldo are subject to BPS (15%), FONASA (4.5-8%), and IRPF deductions. This is consistent with Uruguay's policy of taxing the aguinaldo.