Paraguay

Individual - Other taxes

Last reviewed - 11 February 2020

Social security contributions

In Paraguay, there is a compulsory social security system through which it is required that the employers register their employees.

The calculation basis constitutes every wage item, in cash or goods, except the annual mandatory bonus and family allowance.

The monthly rates are as follows:

Contribution Commercial entity (%) Financial entity (%)
Employee 9.0 11
Employer 16.5 17
Total 25.5 28

The employee’s contribution is withheld from salary by the employer, which is a designated withholding agent. The employer´s contributions are computed on total payroll and are paid together with the employee´s withholding to the Social Security Institute.

For some positions that are independent (e.g. Administrators, Directors, Managers), the contribution to the social security system is optional.

Foreigners should comply with the Migration Laws for practicing activities with salaries within the country.

Consumption taxes

Value-added tax (VAT)

The assignment of goods and the rendering of personal services, except those rendered in a dependent relationship, realised or profited in Paraguayan territory, are subject to VAT at a rate of 10%.