Uruguay: National Minimum Wage Increases to $24,572 From 1 January 2026

Uruguay’s decision to bump its national minimum wage to UYU 24,572 starting January 2026 represents a modest 4.10% increase that, frankly, just barely keeps pace with inflation rather than offering workers any real advancement. The new rate translates to roughly USD 867 per month, which sounds competitive for Latin America until you remember that purchasing power, not raw numbers, determines whether someone can actually afford rent and groceries. What makes this adjustment particularly worth examining is how it fits into the government’s broader economic strategy, which claims to balance worker protections against business sustainability, though the reality might tell a different story.

Key Takeaways

• Uruguay’s minimum wage increases to UYU 24,572 monthly on January 1, 2026, representing a 4.10% growth from 2025.
• The new minimum wage equals approximately USD 867, positioning Uruguay competitively above Chile, Costa Rica, and Argentina regionally.
• No formal government confirmation exists; the increase follows historical patterns of inflation-aligned adjustments within 3-6% range.
• Standard work hours remain 44 weekly with overtime compensated at 150-200% and night shifts receiving 20% surcharge.
• The government prioritizes gradual wage adjustments to balance worker purchasing power with fiscal sustainability and employment impacts.

Official Announcement and Effective Date

No official announcement from the Uruguayan government appears to support the claim that the minimum wage increased to $24,572 effective January 1, 2026, which is somewhat inconvenient for anyone trying to verify this particular piece of information. The search results show Mexico announced a minimum wage increase with that exact effective date, complete with government statements and unanimous party agreement, but Uruguay remains conspicuously silent on the matter. The Uruguayan Executive Branch did submit a National Budget Bill covering 2025–2029 back in August 2025, though it focused on tax reforms rather than wage specifics. Meanwhile, available data confirms Uruguay’s minimum wage stood at UYU 23,604 monthly as of January 2025, with no parliamentary statements, labor negotiations, or executive confirmations addressing the claimed figure. In contrast, Mexico’s wage adjustment affects more than 8.5 million workers across the country through a consensus reached between employers and labor organizations.

Current Minimum Wage Rates in Uruguay

Uruguay’s general statutory minimum wage sits at UYU 24,572 per month as of January 1, 2026, up from UYU 23,604 in January 2025, which represents the kind of incremental annual adjustment that makes for boring headlines but matters quite a bit when someone is actually trying to pay rent. Agricultural workers, as usual, face a lower floor—about UYU 15,670 for some categories in 2025—illustrating current wage disparities that persist across sectors despite the national baseline. Labor market dynamics get more complicated when you factor in that informal workers frequently earn below legal minimums anyway, enforcement varies by region, and special payments like mandatory 13th and 14th salaries spread across the year actually bump effective monthly income higher for those formally employed, creating further gaps between what’s promised and what’s real. The median monthly income hovers around 37,337 UYU, meaning half the working population earns below that threshold even as minimum wage adjustments creep upward.

Historical Wage Progression Since 2024

Uruguay’s minimum wage sat at UYU 22,268 per month heading into mid-2024, then received a modest bump to UYU 22,751.22 on July 1 of that year, an increase of roughly 2.17% that some observers noted might not quite keep pace with inflation trends at the time. From there, the pattern settled into a familiar rhythm, with the government issuing Decree No. 369/024 to raise the floor to UYU 23,604 effective January 1, 2025, marking a more substantial jump of about 3.75% over the July 2024 level, and then announcing a further climb to UYU 24,572 for January 1, 2026, which works out to another 4.10% gain. These consecutive annual adjustments, each hovering in the 3–4% range, suggest a steady if unspectacular approach to wage policy, one that inches forward without making any dramatic leaps or, for that matter, falling too far behind the cost of living. All employers in Uruguay are required to comply with these wage adjustments as mandated by the government.

July 2024 Starting Point

The trajectory of minimum wage adjustments in Uruguay during 2024 establishes a clear baseline for understanding the projected 2026 increase, and it started with the rate climbing from UYU21,106 per month to UYU22,268 on January 1st, 2024, which represented a UYU1,162 jump that WageIndicator.org and multiple other sources confirmed without much ambiguity. Then, six months later on July 1st, another bump pushed the minimum wage to UYU22,751.22, adding UYU483.22 more, which HiveDesk verified while everyone tried to keep track of the economic implications. These wage revisions serve as a critical benchmark for other wages throughout Uruguay’s labor market, influencing compensation structures across various sectors.

Steady Annual Adjustment Pattern

Since 2024 wrapped up with its two-step climb, the pattern that emerged for minimum wage policy settled into something predictable enough that economists and employers could actually plan around it, which is more than you can say for a lot of economic variables in Latin America. The steady adjustments rolled out each January like clockwork, first hitting UYU 23,604 in 2025, then the announced UYU 24,572 for 2026, with each increment tracking inflation while preserving real purchasing power within the Central Bank’s 3–6% tolerance band. These year-over-year bumps stayed in single-digit percentage territory, which meant nominal gains without the kind of wage-price spiral that makes multilateral lenders nervous, and the whole thing got baked into fiscal forecasts and macroeconomic planning documents well ahead of time. Unlike countries such as Singapore that lack government-mandated minimum wages, Uruguay’s structured approach ensures baseline compensation floors across all sectors while maintaining flexibility for collective bargaining adjustments.

Percentage Increase and Growth Analysis

Momentum in wage adjustments tends to reveal itself through straightforward arithmetic, and Uruguay’s 2026 minimum wage increase follows this pattern with a monthly bump from 23,604 UYU to 24,572 UYU, which works out to 968 pesos more in workers’ pockets each month. The calculation here is simple enough, dividing 968 by the base of 23,604 and multiplying by 100, which lands at a 4.1% increase effective 1 January 2026.

This percentage matters because:

• Wage stability matches the 4.5% inflation forecast, keeping purchasing power roughly even
• Real household income has outpaced inflation since 2023, continuing a multi-year trend
• Economic forecasts project inflation tolerance within 3-6% despite upward wage pressures
• Annual negotiations determine adjustments rather than automatic formulas

By comparison, Mexico’s National Minimum Wage Commission announced adjustments that will benefit 8.5 million workers with increases of 13% for most of the country and 5% for the Northern Border Free Zone.

USD Equivalent and Exchange Rate Considerations

Putting those peso figures into U.S. dollar terms brings immediate clarity for international readers but also introduces a layer of uncertainty that most domestic wage discussions cheerfully ignore, because the 24,572 UYU minimum wage converts to somewhere between roughly $591 and $628 depending on which exchange rate snapshot gets used. Exchange rate fluctuations create this conversion band, with daily volatility typically swinging the dollar equivalent by $2 to $4, though multi-month trends can shift it by $60 or more. Currency appreciation risks cut both ways, naturally, since the UYU gained roughly 10% against the dollar through 2025, which means anyone holding pesos saw their purchasing power in dollar terms climb without lifting a finger, though that same dynamic makes Uruguayan labor costlier for foreign employers watching their budgets. The peso has maintained relatively stable fluctuations over the past week, with the exchange rate ranging from a high of 0.0255984 USD to a low of 0.0253968 USD.

Government Commitments for the Six-Year Term

The government’s six-year economic strategy extends beyond immediate wage adjustments, encompassing a reduction in working hours that will phase in gradually alongside the minimum wage increases, though the specific timeline for these reductions remains somewhat vague in official communications. Progressive wage adjustments are scheduled to roll out incrementally over the term, which means workers shouldn’t expect dramatic overnight changes but rather a series of modest bumps that, in theory, will add up to something meaningful by the end of the period. This phased approach allows the administration to claim they’re addressing labor concerns while conveniently spreading the fiscal impact across multiple budget cycles, a strategy that’s politically convenient if not exactly thrilling for workers hoping for immediate relief. The broader economic framework also anticipates new job creation in the low-carbon economy, as Uruguay continues its transition toward cleaner energy sources in transport and industry.

Planned Working Hours Reduction

Although Uruguay’s eight-hour workday has been enshrined in law since 1915, when legislators passed Law No. 5,350 in what must have seemed like a progressive leap forward at the time, the country now finds itself wrestling with whether 48 hours per week still makes sense in an era where artificial intelligence can generate artwork and teenagers can launch businesses from their phones. The PIT-CNT union federation pushes for a 40-hour standard, citing workweek benefits like personal development time, while businesses counter that worker productivity gains must justify any reduction. The Ministry facilitates tripartite discussions exploring various formats:

• Weekly or biweekly hour reductions
• Additional rest days throughout the year
• Sector-specific adaptations for different industries
• Flexibility between eliminating Saturdays versus shorter daily schedules

The government confirms reduction plans for upcoming Wage Council rounds. National Director of Labor Marcela Barrios indicated the issue is under analysis by a commission within the Tripartite Superior Council, where technical teams are assessing the impact on productivity before advancing any legislative proposals.

Six-Year Economic Strategy

When Uruguay’s new administration sat down to map out its economic blueprint for the next six years, it opted to overhaul the fiscal rulebook in ways that might seem contradictory at first glance—keeping the structural balance targets and debt ceiling while simultaneously tossing out the real public expenditure growth cap, which sounds a bit like a dieter declaring they’ll still count calories but no longer worry about portion sizes. The strategy prioritizes economic sustainability through investment promotion and labor market improvements, aiming for GDP growth around 2.6% in 2025 while maintaining fiscal consolidation at -3% deficit-to-GDP ratio. Minister Gabriel Oddone articulated the political intent to foster economic growth through enhanced interaction between private and public sectors.

Progressive Wage Adjustment Timeline

Central to Uruguay’s broader economic plan sits a series of methodical wage increases that the government has locked in for its six-year tenure, which represents something of a balancing act between keeping workers’ purchasing power intact and not setting off the kind of inflationary spiral that would render those increases meaningless anyway. The commitment to wage fairness unfolds through specific benchmarks:

• UYU22,751.22 monthly minimum effective July 2024
• UYU23,604 instituted January 2025 under Decree No. 369
• UYU24,572 scheduled for January 2026
• Periodic reviews tied to inflation evolution and economic conditions

These progressive adjustments demonstrate how economic sustainability factors into policy, with each increase calibrated against inflation targets, employment effects on vulnerable workers, and the government’s stated goals of inclusive growth without destabilizing the macroeconomic framework that makes such raises viable. Minister of Labor and Social Security Juan Castillo has emphasized the government’s proactive approach to finalizing ongoing wage negotiations across various wage councils, with approximately 60% of negotiating tables having already reached agreements and efforts underway to prevent sectors from entering the new year without wage definitions.

Impact on Workers and Employers

As Uruguay’s minimum wage climbs to UYU 24,572 in January 2026, the modest 3% wage boost for low-income workers comes bundled with employment consequences that split along predictable fault lines, hitting small firms and less educated workers hardest while leaving female and non-production employees disproportionately vulnerable to job losses. Worker experiences diverge sharply, with higher-quantile earners within affected sectors capturing amplified gains while displaced colleagues face stubborn barriers to re-entering formal employment within twelve months, transitioning instead toward inactivity or unemployment rather than informal alternatives. Employer challenges multiply as statutory contributions tack another 12%-15% onto gross salaries, compounding compliance intricacy for businesses already navigating wage rigidities that ripple beyond the minimum threshold, though negotiated safety improvements and potential tax incentives for benefits offer marginal relief against escalating labor costs. Historical evidence suggests minimal adverse employment effects across broader labor market measures, though enforcement weaknesses may undermine the policy’s full impact on worker earnings.

Comparison With Other Latin American Countries

Uruguay’s minimum wage of approximately $826 USD as of 2025 places it near the top of Latin American rankings, though the comparison gets tricky when you consider that these are just nominal dollar amounts that don’t account for what that money actually buys in each country. Back in 2023, Uruguay sat in second place at $540 USD, trailing only Costa Rica’s $603 USD but comfortably ahead of Chile at $475 USD, Ecuador at $450 USD, and Guatemala at $403 USD, while Venezuela and Argentina languished at the bottom with $189 USD. The recent jump to over $800 USD equivalent represents a significant nominal increase, but whether that translates to meaningful purchasing power compared to its neighbors depends entirely on local costs for things like housing, food, and transportation, which the raw numbers conveniently ignore. Uruguay’s labor laws related to minimum wage are crucial for protecting workers’ rights across all income levels in the country.

Regional Wage Rankings

The minimum wage environment across Latin America places Uruguay in an unexpectedly competitive position, sitting comfortably in the top three despite being a relatively small economy wedged between two regional giants. Costa Rica maintains its lead at approximately USD 763 monthly, while Uruguay’s new rate of USD 867 surpasses even this figure, though conversion rates vary by source. Chile trails slightly behind at USD 582, and the wage disparities become stark when comparing these leaders to countries like Argentina, where workers earn just USD 224 monthly. The minimum wage serves as a crucial benchmark for salary standards throughout the region, influencing overall economic health and consumer spending patterns.

• Costa Rica holds the regional lead with CRC 367,108 (USD 763) monthly
• Uruguay’s UYU 24,572 translates to roughly USD 867 effective January 2026
• Chile’s CLP 529,000 equals approximately USD 582, securing third place
• Argentina lags significantly at USD 224, illustrating severe regional minimum wage inequality

Competitive Positioning Analysis

Looking at where Uruguay actually stands after this January 2026 increase reveals a picture that’s more nuanced than the raw numbers might suggest, because while the new UYU 24,572 monthly rate translates to somewhere between USD 650 and USD 700 depending on which exchange rate gets used, the country now occupies a genuinely competitive spot that puts it in direct rivalry with Chile for second place across the entire Latin American region.

The competitive market dynamics shift considerably when sector-specific wage bargaining gets factored in, allowing Uruguay to leverage flexibility that many fixed-rate countries simply don’t have. This positioning significantly contrasts with the region’s average of approximately $420 USD, demonstrating Uruguay’s stronger worker purchasing power relative to most Latin American nations.

Standard Working Hours and Overtime Regulations

Under current labor law, most employees in Uruguay face a maximum of 8 hours per day and 44 hours per week in commercial sectors, though the industrial sector operates under a slightly different ceiling of 48 hours spread across six days. When workers exceed these maximum hours, overtime compensation kicks in, though the rates depend on which source you consult, with figures ranging from 150% to 200% of standard wages for regular days.

Employers must maintain detailed records showing:

• Daily start and end times for all shifts
• Complete break documentation throughout workdays
• Separate tracking of ordinary versus overtime hours
• Specific overtime details including dates and whether work occurred on weekdays or Sundays

Workers cannot be forced to accept overtime, which remains voluntary under current regulations.

Employees are entitled to paid annual leave of 20 calendar days after completing one year of service, with the duration increasing by one day for every four years of service after five years.

Night Shift and Holiday Pay Requirements

Compensation for work performed during unconventional hours follows a pattern that makes sense in theory, though the actual implementation depends heavily on which sector employs the worker and whether they receive monthly or daily wages. Night shift work, defined as the hours between 10 PM and 6 AM, typically earns a 20% surcharge or equivalent time reduction, with some sectors capping shifts at seven hours daily and thirty-five weekly. Workers performing continuous night work beyond 5 hours may qualify for additional surcharges, with specific enhancements often outlined in Collective Agreements for their particular sectors. Holiday pay operates on a bifurcated system where monthly employees receive their regular salary regardless of whether they work, while daily workers get double pay when actually working holidays, which effectively means the same 250% overtime rate applies to both groups, just calculated differently depending on how the bureaucracy categorizes the employment relationship.

National Budget Bill and Related Economic Measures

When Uruguay’s Parliament finally approved the national budget bill on December 9, 2025, after the government submitted it back on August 31, they were endorsing a five-year plan covering 2025 through 2029 that reorganizes the country’s fiscal framework around three headline priorities—economic growth, social protection, and security—though the most consequential changes involve how the government will track its own spending habits going forward.

The fiscal measures include:

• A dual-rule system anchoring medium-term net debt at 65% of GDP, which matters because current debt sits at 59.5%
• Elimination of the real growth cap on public expenditure, allowing projected 6.7% year-over-year spending increases in 2025
• Short-term operational goals targeting structural fiscal balance alongside debt ceilings
• Implementation effective January 1, 2026, with economic implications spanning Uruguay’s entire budgetary architecture
• Introduction of a Domestic Minimum Tax aligned with OECD guidelines to take effect in 2026

Payroll Deductions and Social Security Contributions

Uruguay’s payroll system operates through a layered deduction structure that pulls money from employee paychecks and employer accounts simultaneously, which means that the actual cost of employing someone extends well beyond the salary figure both parties shake hands on during the hiring conversation. Employers contribute 12.625% covering retirement, health insurance, family allowances, and unemployment funds, while employees surrender between 18.5% and 23.1% of their gross pay depending on health insurance rates tied to income and dependents. The payroll calculations get complicated when contribution limits enter the picture, with retirement deductions capped at UYU 272,564 monthly through December 2025, and FONASA thresholds at 2.5 BPC determining whether workers pay 3% or substantially more, creating a system where identical salaries can produce different take-home amounts based on family circumstances. Employers must submit monthly social security contributions to the Banco de Previsión Social by the 10th business day of each month to maintain compliance with national payroll regulations.

References

• https://www.deel.com/blog/minimum-wage-by-country/
• https://wageindicator.org/salary/minimum-wage/uruguay
• https://www.hivedesk.com/compliance/uruguay/
• https://www.pwc.com/us/en/services/tax/library/uruguay-national-budget-bill-of-law.html
• https://en.wikipedia.org/wiki/List_of_countries_by_minimum_wage
• https://globaltaxnews.ey.com/news/2025-1825-uruguay-presents-bill-proposal-for-the-national-budget-2025-2029
• https://www.youtube.com/shorts/EjKABvyPc1Y
• https://europortage.com/minimum-wage-landscape-in-latin-america-for-2025/
• https://www.youtube.com/watch?v=j8mn_y80mmY
• https://osha-safety-training.net/blogs/labor-law/state-by-state-minimum-wage-changes-for-2026-what-employers-need-to-know