Contractor in Uruguay: the bill against a salary, and what happens to your retirement
Two questions that come up repeatedly and are almost never answered with numbers: how much do you have to earn to make it worthwhile compared to a traditional job, and whether you'll end up without a pension. The second question has an answer that almost everyone gives the opposite of.
"As a contractor, you contribute based on a very low nominal amount, no matter how much you invoice, so you'll retire with nothing."
That's not the case. The pension contribution for the owner of a sole proprietorship is calculated on the HIGHEST of three amounts: the deemed income bracket (with a minimum of 11 BFC without employees, or 15 BFC if you have employees), the actual income received, and the highest salary paid to an employee. The deemed income bracket is a floor, not a ceiling: if your revenue exceeds it, you contribute based on your actual income.
How much do you need to bill to break even?
A clerk charges thirteen salaries a year Including the Christmas bonus. Billing exactly the nominal amount already puts you at a disadvantage, and that's before tax.
You need to bill $130.000,00 per month just to break even.
With what you invested, you'll earn $120.000,00 more per year than your salary. That surplus is what needs to cover everything below.
| Annual billing (12 months) | $ 1.680.000,00 |
| Annual salary (13 with Christmas bonus) | $ 1.560.000,00 |
| Your revenue, in equivalent salaries | 14 |
This calculation puts both sides in the same unit and nothing more: it doesn't estimate taxes or contributions, which depend on the system you choose. For that, you can use the calculators on the website.
What doesn't come with the billing
It's not an argument against it — many times the rate more than compensates — but it's what you have to add to the other person's salary to make a serious comparison.
Vacation leave and pay
Paid rest plus an extra sum for the better enjoyment of that leave.
View detailsSeverance pay
The employee has it; the service contract ends and there is nothing to collect.
View detailsUnemployment insurance
If you lose a client, there's no unemployment benefit: you didn't contribute as an employee.
View detailsCoverage for work accidents
The one from the State Insurance Bank is linked to the employment relationship.
Contributions made by the employer
As a contractor, you provide the employer's share: you are both ends of the same relationship.
The contractor's retirement
The pension contribution for the owner of a sole proprietorship is calculated on the HIGHEST of three amounts: the deemed income bracket (with a minimum of 11 BFC without employees, or 15 BFC if you have employees), the actual income received, and the highest salary paid to an employee. The deemed income bracket is a floor, not a ceiling: if your revenue exceeds it, you contribute based on your actual income.
Frequently Asked Questions
The tax side and the tools
Sources
Verified on August 10, 2026. For informational purposes only: your specific case depends on the tax regime and should be reviewed by an accountant.