Employment Cost Calculator for Paraguay
Calculate your complete hiring costs for Paraguay employees, including payroll taxes, social security contributions, employee benefits, and management fees. This salary calculator provides accurate employer cost estimates for informed hiring decisions.
Employer Tax Contributions
| Tax Type | Rate | Base |
|---|---|---|
| Social Security (IPS) | 16.5% (Employer) | Gross salary |
| Social Security (IPS) | 9% (Employee withheld) | Gross salary |
| Personal Income Tax (IRP) Withholding | 8-10% (Progressive) | Employee's net taxable income exceeding threshold |
Filing & Compliance
- Monthly IPS contributions are due within the first few working days of the following month.
- Monthly IRP withholding remittance to SET is usually based on the employer's tax identification number (RUC).
- Annual informative declaration for IRP detailing income and withheld tax is required from employers.
In Paraguay, employers deduct income tax and social security contributions from employee salaries.
Income Tax (IRP - Impuesto a la Renta Personal)
- Tax Rate: 10%
- Threshold: Applies to annual income exceeding 36 times the monthly minimum wage (approximately 13,000 USD as of January 1, 2025). This threshold is subject to change based on annual minimum wage adjustments.
Social Security (IPS - Instituto de Previsión Social)
- Employee Contribution: 9% of gross salary. This includes 3% designated for the Pension Fund and the remaining for IPS.
- Employer Contribution: 16.5% of the employee's gross salary.
Other Deductions
- Other deductions may apply depending on the employee's specific circumstances, such as union dues or court-ordered deductions.
Employer Responsibilities
- Employers are responsible for calculating, withholding, and remitting both income tax and social security contributions to the appropriate authorities.
- It's crucial for employers to maintain accurate records of all payroll deductions.
Important Considerations
- The information provided is based on the current legislation as of February 5, 2025. Tax laws and regulations are subject to change.
- For the most up-to-date and personalized guidance, consult with a local tax advisor. This overview is for informational purposes only and should not be considered financial or legal advice.
