Monotributo, IRAE ficto or IRPF: which one suits you?

Opening a unipersonal is easy; the real doubt comes after: under which régime do I pay tax? In Uruguay there are three main paths for the self-employed — Monotributo, IRAE and IRPF — and choosing well can change quite a lot of what you pay. The good news: the decision depends on a few things. Here we explain them, with a comparison table and examples by profession.

The three paths, in one line

Monotributo: the simplest, a single monthly fee, only for the smallest. IRAE: the business-profit tax (25%), which you can file in real form (revenue minus expenses) or ficto (a percentage on revenue). IRPF: the personal income tax, with a progressive scale, for pure labor. The key to choosing is your size, your expenses, and whether labor or capital predominates in your activity.

Monotributo: when to choose it

If your activity is genuinely small — a market stall, a shop up to 15 m², few assets — Monotributo is usually unbeatable: a fixed monthly fee bundling taxes and contributions, with pension coverage and optional FONASA. This is how the BPS defines it:

Monotributo is the simplest path, designed for small scale:

«Es un régimen simplificado destinado a quienes realizan actividades empresariales de reducida dimensión económica, que unifica en un solo tributo las contribuciones especiales de seguridad social por la actividad del titular y la totalidad de los impuestos nacionales vigentes.»

In English: It is a simplified régime for those who carry out business activities of reduced economic size, which unifies in a single tribute the special social-security contributions for the owner's activity and all the national taxes in force.

IRPF: when (pure labor)

If all you bring is your work — a personal service with no business structure — by default you pay IRPF, with its progressive scale (0% up to 7 BPC, then 10% to 36%) and the possibility of deductions. The law expressly excludes professional labor from business income when labor predominates:

When labor predominates, the income falls outside IRAE and goes through IRPF:

«No se encuentran comprendidas en el inciso anterior las rentas derivadas de actividades desarrolladas en el ejercicio de su profesión por profesionales universitarios con título habilitante, rematadores, despachantes de aduana, corredores y productores de seguros (…), siempre que el factor productivo predominante lo constituya el trabajo.»

In English: The income from activities carried out in the exercise of their profession by university professionals with a qualifying degree, auctioneers, customs brokers, insurance brokers and agents (…) is not included in the preceding paragraph, provided that the predominant productive factor is labor.

IRAE ficto: when (few expenses)

If you're not required to keep accounting (prior-year income below 4,000,000 UI), you can file IRAE on a ficto basis: you pay 25% on income estimated by a scale (12% to 60% of your revenue depending on the bracket). In the low brackets it's very light (≈3% of what you invoice). It suits those with few deductible expenses. The law enables it like this:

And IRAE ficto is available to those who don't keep full accounting:

«Los contribuyentes que no están obligados a llevar contabilidad suficiente podrán determinar sus rentas netas en forma ficta.»

In English: Taxpayers not required to keep sufficient accounting may determine their net income on an assumed (ficta) basis.

How to decide, step by step

A simple guide to orient you (then confirm it with an accountant):

• Is your activity very small (premises ≤ 15 m², few assets, public space)? → Monotributo.
• Is it pure labor with few expenses (a professional, a freelancer)? → IRPF or IRAE ficto, whichever is lower.
• Do you have many real expenses (inventory, rent, salaries)? → IRAE real, which deducts them.
• Do you combine capital and labor (commerce, a trade with materials)? → IRAE (ficto if few expenses).

Quick comparison

Examples by profession

How each case usually lands (indicative — your situation may have nuances):

Before you decide

Two warnings. First: opting for IRAE ficto locks you in for a minimum of five fiscal years, so it's not a decision to take lightly. Second: the thresholds (income, assets, size) are updated and can force a régime change as you grow. So it's worth reviewing your case each year and, when in doubt, consulting an accountant.

In short: Monotributo for the smallest; IRPF if it's pure labor; IRAE ficto if you have few expenses; IRAE real if you have many. The best option depends on your numbers, not on a single rule. Want to see which suits you and what you'd pay under each? Tributo builds your calendar and shows where each figure comes from. And always verify with the DGI and BPS before deciding.