IRPF in Uruguay: what it is and how it's calculated (2026 guide)

If you searched 'IRPF' and want to finally understand it, this guide is for you. IRPF stands for Impuesto a la Renta de las Personas Físicas — the tax you pay in Uruguay on what you earn. Here we explain, in plain words and with official sources, what it taxes, what the 2026 scale looks like, from what income it kicks in, which deductions lower it, and how it changes whether you're an employee or self-employed.

What is IRPF?

IRPF is the tax on the income of individuals who are tax residents in Uruguay. It was created by the tax reform (Law 18.083) and lives in Title 7 of the Texto Ordenado. The law itself defines it like this:

Article 1 of Title 7 states:

«Créase un impuesto anual de carácter personal y directo, que gravará las rentas obtenidas por las personas físicas.»

In English: An annual tax of a personal and direct nature is created, which shall tax the income obtained by individuals.

Three words in that definition matter. 'Annual': the tax is measured per year (even though payments on account or withholdings happen during the year). 'Personal': it depends on your situation (how much you earn, how many children you have, etc.). 'Direct': you pay it on your income — it's not a consumption tax like VAT. And it taxes residents: if you're not a tax resident, you generally don't pay IRPF but IRNR (we cover this at the end).

The two categories: capital and labour

IRPF is a 'dual' tax: it splits your income into two categories and each is taxed differently. They aren't added together for a single rate; they're settled separately.

• Category I — capital income: what your assets yield. Rent you collect, interest, dividends and profits, and capital gains (for example, the gain on selling a property). They're taxed at flat rates (the general one is 12%).
• Category II — labour income: what you earn by working, whether as a dependent employee or on your own (personal services). It's taxed with a progressive scale by brackets.

The Category II progressive scale (2026)

This is the most-searched part. Labour income is taxed 'by brackets': your income is split into tranches and each tranche pays its own rate, from 0% up to 36%. Crossing a step doesn't push your whole salary to the higher rate — only the portion that falls in that tranche pays it. These are the monthly brackets for 2026 (with the BPC at $6,864):

The brackets are set in BPC (the State's annual unit), so they rise every January with the new BPC value. The same scale exists in an annual version (each bracket multiplied by 12). Always check the current values:

An example to make it click

Suppose a nominal salary of $90,000 a month. The first $48,048 (7 BPC) pay nothing. From $48,049 to $68,640 there are $20,592 taxed at 10% = $2,059. From $68,641 to $90,000 there are $21,360 taxed at 15% = $3,204. The 'caused' IRPF comes to about $5,263 a month — and that's before deductions, which lower it further. Note the effective rate (5,263 over 90,000 ≈ 5.8%) is much lower than the 15% of the top tranche: that's progressivity.

From what income do you pay?

There's a non-taxable minimum: if your monthly labour income doesn't exceed 7 BPC ($48,048 in 2026), you pay no IRPF on labour. Only above that floor does the scale apply. Also, someone who earns relatively little can request exclusion from the withholding regime (limit $68,300 monthly in 2026) so nothing is withheld each month; it's still worth reviewing the annual settlement.

Category I: how capital is taxed

Capital income doesn't use the progressive scale but flat rates. The general one is 12% (for example, rent). Some are lower — dividends and profits usually pay 7%, and certain interest pays 3%, 5% or 7%. An important relief for landlords: rentals are exempt if in the year they don't exceed 40 BPC ($274,560 in 2026), subject to certain conditions. The law puts it like this:

Title 7, art. 38 lit. J (exemption for small landlords):

«Las rentas derivadas de arrendamientos de inmuebles cuando la totalidad de las mismas no superen las cuarenta Bases de Prestaciones y Contribuciones (40 BPC) anuales, siempre que el titular autorice expresamente el levantamiento del secreto bancario.»

In English: Income derived from property rentals when the total does not exceed forty Bases de Prestaciones y Contribuciones (40 BPC) per year, provided the holder expressly authorizes the lifting of bank secrecy.

To understand what the BPC is and why the caps are in that unit (and not in pesos), see our explanation of the units (UI, BPC, UR) in the site's units section.

Deductions: how the tax goes down

Labour IRPF is computed in two steps: first the 'caused' tax (the scale on your income) and then a deduction credit is subtracted. That credit is obtained by applying a rate to your deductible items: 14% if your income is up to 15 BPC monthly, and 8% above. What can you deduct? The most common:

For example, for dependent children, the DGI admits:

«20 BPC anuales por cada hijo menor de edad a cargo.»

In English: 20 BPC a year for each dependent minor child.

• Dependent minor children: 20 BPC a year per child (40 BPC if disabled).
• Your personal contributions: BPS (pension), FONASA (health) and FRL.
• Rent of your home: a credit of 8% of the rent paid (with a contract and conditions).
• Mortgage instalments on your single and permanent home (with a cap).

• Guide: how to lower your IRPF legally with the admitted deductions

If you work for yourself: IRPF or IRAE

If you're independent and provide personal services (a sole trader), you have a choice many don't know about: you can be taxed under IRPF (Category II, the scale above) or, if it suits you, opt for IRAE (the business income tax). Under IRPF for personal services, to compute the taxable income a flat 30% is deducted for expenses — that is, you're taxed on 70% of what you invoice. The law sets it out like this:

Title 7, art. 45 (labour income outside the employment relationship):

«Para determinar la renta computable, se deducirá del monto total de los ingresos un 30% (treinta por ciento) en concepto de gastos, más los créditos incobrables, en las condiciones que establezca la reglamentación.»

In English: To determine the computable income, 30% (thirty percent) is deducted from the total income as expenses, plus bad debts, under the conditions set by the regulation.

When does each suit you? It depends on your real income and expenses: with many deductible expenses, IRAE may pay less; with few, IRPF and its 30% deemed expenses is usually better. It's a decision worth discussing with an accountant. To see how to register and what a sole trader costs, check the guides linked below.

Employee or self-employed: how it's paid

If you're an employee, your employer withholds IRPF from your salary each month and remits it to the DGI; you file form 3100 to declare your deductions (and a new one whenever they change, e.g. a child is born or you change rentals). If you're independent, you make advance payments yourself (generally bimonthly) and then the annual settlement. In both cases, what you paid during the year are advances: the final account is done in the tax return.

The annual return and the refund

Once a year (around May–June of the following year) the annual IRPF settlement is done. It adds up everything earned, applies the scale and deductions, and compares with what was already withheld or advanced. If too much was withheld, you get a refund; if too little, you pay the difference. That's why it pays to have your deductions well declared: many refunds come from there.

Residents and non-residents (IRNR)

IRPF is for Uruguay's tax residents. If you're not a resident, Uruguayan-source income is taxed by another tax, the IRNR (Non-Residents' Income Tax), usually at 12%. Tax residency has its own rules (days in the country, centre of interests, etc.) and is key if you moved recently. We develop it in the expat guide.

How Tributo helps

Tributo builds your calendar of DGI and BPS obligations with dates and estimated amounts, so you don't miss an IRPF due date or your contributions. These guides help you get oriented:

• Expat guide: residency, taxes and how to work in Uruguay
• Guide: how to register your sole trader, step by step
• Guide: how much and when a sole trader pays

Frequently asked questions

• What does IRPF mean? Impuesto a la Renta de las Personas Físicas: the tax on what people earn in Uruguay.
• From what income do you pay IRPF on labour? Above 7 BPC monthly ($48,048 in 2026). Below that minimum, you don't pay.
• Does all my income pay the top tranche's rate? No. It's progressive: each bracket pays its own rate; only the portion in the top tranche pays the high rate.
• How do I lower IRPF? With deductions: children, your contributions, rent (8%) and mortgage. Declare them on form 3100.
• I'm self-employed — IRPF or IRAE? You can choose. With many expenses IRAE often suits; with few, IRPF (30% deemed expenses). Consult an accountant.
• I'm not a resident — do I pay IRPF? Generally no: Uruguayan income of non-residents goes through IRNR (12%).
• When is the annual return? Around May–June of the following year; a refund in your favour may come out of it.

In short: IRPF taxes your income annually and personally, separating capital (Category I, flat rates) and labour (Category II, a progressive scale from 0% to 36%), with a non-taxable minimum of 7 BPC and deductions that lower it. Always check the current values with the DGI and BPS — and let Tributo remind you of every due date.