Countries › Paraguay › Guide › 7. Labor and employment › Social security in Paraguay (IPS): 9 plus 16.5 percent contributions, health and sickness benefits and pensions after the 2024 reform

Social security in Paraguay (IPS): 9 plus 16.5 percent contributions, health and sickness benefits and pensions after the 2024 reform

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Last verified: 2026-10-28 · Status: Changing

Private sector employees must be registered with the Instituto de Previsión Social (IPS) from their first day, and contributions total 25.5 percent of salary: 9 percent withheld from the worker and 16.5 percent paid by the employer, filed and paid by the 10th of the following month. IPS provides medical care, sickness (50 percent), work accident (75 percent) and maternity (100 percent) subsidies, and pensions at 60 with 25 years of contributions, 55 with 30 years or 65 with 15 years. The 2024 reform (Ley 7446/2024) is phasing the pension salary base from the last 36 to the last 120 months by 2032 and reallocating funds, so check the current stage.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation in the planilla for Wednesday 28 October 2026. Conversions are for orientation only.

Key facts

Employer social security contribution (IPS), total	16.5 %DL 1860/1950 art. 17 b) (Ley 98/1992) 14% plus 2.5% (art. 17 bis, Ley 7446/2024), as of 2026-10-28 · in force
Employer IPS contribution under DL 1860/1950 art. 17 b)	14 %DL 1860/1950 art. 17 b) (Ley 98/1992), as of 2026-10-28 · in force
Additional employer contribution collected by IPS	2.5 %DL 1860/1950 art. 17 bis (Ley 7446/2024), as of 2026-10-28 · in force
Employee social security contribution (IPS)	9 %DL 1860/1950 art. 17 a) (Ley 98/1992), as of 2026-10-28 · in force
Total IPS contribution, worker plus employer	25.5 %DL 1860/1950 art. 17 and 17 bis, as of 2026-10-28 · in force
Monthly IPS payment window ends on day	10 day of monthMTESS guide section 3.6, as of 2026-10-28 · in force
Ordinary retirement age (IPS)	60 yearsDL 1860/1950 art. 60 a) (Ley 7446/2024), as of 2026-10-28 · in force
Contribution years for ordinary retirement	25 yearsDL 1860/1950 art. 60 a) (Ley 7446/2024), as of 2026-10-28 · in force
Early retirement age with 30 years of contributions	55 yearsDL 1860/1950 art. 60 b) (Ley 7446/2024), as of 2026-10-28 · in force
Salary averaging period for pensions when fully phased in	120 monthsLey 7446/2024 art. 2 and 6, as of 2026-10-28 · in force
IPS sickness subsidy, share of 4 month average pay	50 %MTESS guide section 4.6, as of 2026-10-28 · in force
IPS work accident subsidy, share of 4 month average pay	75 %MTESS guide section 4.8.6, as of 2026-10-28 · in force
Voluntary pension continuity contribution	12.5 %Ley 430/1973 art. 25 (Ley 7446/2024), as of 2026-10-28 · in force

The rule

1. Who must be covered. The Constitution requires a compulsory and comprehensive social security system for dependent workers and their families. IPS runs the compulsory insurance for private sector salaried workers (including domestic workers), covering non occupational illness and accident, maternity, work accidents and occupational disease, invalidity, old age and death. Bank and finance sector employees belong to the bank employees' pension fund instead. The employer must register each worker with IPS (alta) through the REI electronic system from the start of work; workers can check their status in the MI IPS app and report non registration to IPS or MTESS, whose inspectors can register the worker ex officio.
Cost to do it: No registration fee; contributions run from the first salary.
Example: A new hire starting on 1 November must be registered with IPS from that day, not after probation. / Same: contributions start with the first pay.Decreto Ley Nº 1860/1950 approved by Ley Nº 375/1956; MTESS social security guide, Constitution art. 95; MTESS guide sections 1.2, 2.3, 2.4.4 and 2.6, 1950-12-01 official text · verified 2026-10-28

2. Contribution rates. The worker contributes 9 percent of salary and the employer 14 percent under Decreto Ley 1860/1950 art. 17 as rewritten by Ley 98/1992; Ley 7446/2024 added art. 17 bis recognizing an additional 2.5 percent employer contribution that IPS collects for the Health Ministry and MTESS and that is being shifted into the IPS sickness and maternity fund at 0.5 percentage points a year over five years. The MTESS guide states the employer rate as 16.5 percent of total salary and the worker rate as 9 percent, withheld from pay. Under Ley 7446/2024 the sickness and maternity fund receives 12 percent of covered salaries (phased in from 10 percent at 0.5 points a year) and administration 1 percent; the guide shows 12 percent for pensions, 12 percent for health and 1 percent for administration.
Cost to do it: 25.5 percent of gross salary in total: 16.5 percent employer cost plus 9 percent withheld from the worker.
Example: On PYG 8,000,000: worker PYG 720,000, employer PYG 1,320,000, total paid to IPS PYG 2,040,000. / On US$1,363: worker US$123, employer US$225, total US$348.Decreto Ley Nº 1860/1950 art. 17 as amended by Ley Nº 98/1992; art. 17 bis and 24 added and amended by Ley Nº 7446/2024, DL 1860/1950 art. 17 a) and b) (Ley 98/1992 art. 2); art. 17 bis and 24 (Ley 7446/2024 art. 7, 8 and 9), 2024-12-30 official text · verified 2026-10-28 · changed: Ley 7446/2024 (promulgated and published 30 December 2024) added art. 17 bis, raised the sickness and maternity fund share to 12 percent in stages and cut administration to 1 percent.

3. Filing and payment. The employer declares each worker's monthly salary to IPS on a contribution payroll (planilla) and pays the worker and employer contributions monthly in arrears, from the 1st to the 10th of each month; payment after that date generates surcharges. Payment can be made at IPS offices in Asunción, through enabled banks, collection networks and home banking, after printing the statement from the REI system with the employer's access code. If an employer fails to register a worker, IPS still provides benefits for work accidents and claims the cost from the employer.
Cost to do it: No collection fee at IPS offices and listed home banking; card payments carry the issuer's commission.
Example: October salaries of PYG 8,000,000 must be declared and the PYG 2,040,000 paid between 1 and 10 November. / About US$348 due by 10 November.MTESS social security guide; Decreto Ley Nº 1860/1950 art. 48 and 49, MTESS guide sections 3.3, 3.6, 3.7 and 4.8.3, 1950-12-01 official text · verified 2026-10-28

4. Short term benefits. Insured workers and their registered dependants (spouse or dependent partner, children under 18 or disabled, dependent parents over 60) receive medical, surgical and dental care, medicines and hospitalization; full entitlement to all medical services requires 36 months of contributions. For incapacity over three days IPS pays a sickness subsidy of 50 percent of average contributory pay in the last four months, for up to 52 weeks. Work accidents and occupational diseases are covered from the first day of registration, with a subsidy of 75 percent of the four month average for up to 52 weeks, then a medical board may grant a temporary invalidity pension; employers must report accidents to IPS within 8 days. Maternity care needs no prior contributions, and the maternity cash subsidy of 100 percent of the last declared salary for 18 weeks (up to 24 in special cases) requires at least 4 months of contributions.
Cost to do it: Covered by contributions; the employer pays uncovered sick days of permanent workers up to 90 days (Código del Trabajo art. 173).
Example: A worker on PYG 8,000,000 off sick for 30 days receives about PYG 4,000,000 from IPS (50 percent of the average). / About US$682.MTESS social security guide; Decreto Ley Nº 1860/1950 art. 51; Ley Nº 5508/2015 art. 12, MTESS guide sections 4.4 to 4.9, 1950-12-01 official text · verified 2026-10-28

5. Pensions after Ley 7446/2024. Ordinary retirement requires age 60 and at least 25 years of contributions and pays 100 percent of the average of the last 120 months of declared salaries; early retirement requires age 55 and 30 years and pays 80 percent, rising 4 points per year of age up to 59; proportional retirement requires age 65 and 15 years and pays 60 percent for 15 years, proportional to the years contributed. Invalidity from common illness pays 50 percent of the 120 month average plus 1.5 points per year of contributions above three years, up to 100 percent. The reference period rises from 36 to 120 months at one month per month of the law's validity; the MTESS guide says it reaches 120 months in 2032, and older months are indexed to CPI. Survivors' pensions need 15 years of contributions (none for work accidents) and pay 60 percent of the pension, per the MTESS guide.
Cost to do it: Financed by contributions; no separate employer cost.
Example: A worker retiring at 57 with 30 years of contributions and a reference average of PYG 8,000,000 gets 88 percent, PYG 7,040,000 a month. / About US$1,200 a month.Decreto Ley Nº 1860/1950 art. 60 and 61 as amended by Ley Nº 7446/2024, Ley 7446/2024 art. 2, 3 and 6, 2024-12-30 official text · verified 2026-10-28 · changed: Ley 7446/2024 extended the pension salary base from 36 to 120 months, phased in at one month per month, and rewrote the invalidity formulas.

6. Leaving covered work and moving between countries. A worker who leaves salaried work before qualifying may continue contributing voluntarily to the pension fund at 12.5 percent of the average of the last 36 salaries (never below the minimum wage), without health cover. Contributions in different Paraguayan pension funds can be totalized from age 65 under Ley 3856/2009. Workers who contributed in other Mercosur states (Argentina, Brazil, Uruguay) or in countries of the Ibero American Multilateral Social Security Convention can claim a pension through IPS by totalizing periods. Part time workers contribute at the general rates on actual pay, and where pay per job is below the minimum wage the employer tops up the sickness and maternity fund portion to the minimum base.
Cost to do it: Voluntary continuity: 12.5 percent of the 36 month average, at least PYG 380,500 a month on the minimum wage.
Example: A departing worker with a 36 month average of PYG 8,000,000 may keep contributing PYG 1,000,000 a month. / About US$170 a month.Ley Nº 430/1973 art. 25 as amended by Ley Nº 7446/2024; Ley Nº 6339/2019 art. 10; MTESS social security guide, Ley 430/1973 art. 25 (Ley 7446/2024 art. 5); Ley 6339/2019 art. 10; MTESS guide sections 5.6 to 5.8, 2024-12-30 official text · verified 2026-10-28

Monthly salary (PYG)	Worker 9% (PYG)	Employer 16.5% (PYG)	Total to IPS (PYG)	Employer cost (USD)
3,044,000	273,960	502,260	776,220	604
5,000,000	450,000	825,000	1,275,000	993
8,000,000	720,000	1,320,000	2,040,000	1,588
15,000,000	1,350,000	2,475,000	3,825,000	2,978
30,000,000	2,700,000	4,950,000	7,650,000	5,956

IPS contributions on a monthly salary (DL 1860/1950 art. 17 and 17 bis; MTESS guide; USD at PYG 5,868.31, BCP 28 October 2026)

Pension	Age	Contribution years	Benefit, share of 120 month average
Ordinary	60	25	100 percent
Early	55 to 59	30	80 percent at 55, plus 4 points a year (96 percent at 59)
Proportional	65	15	60 percent at 15 years, proportional to years contributed
Invalidity, common illness	Any	3	50 percent plus 1.5 points per year above 3, up to 100 percent

IPS pension types after Ley 7446/2024 (DL 1860/1950 art. 60 and 61; MTESS guide section 5)

Worked example

A Brazilian agribusiness group's Paraguayan S.R.L. employs a farm manager at PYG 8,000,000 a month (US$1,363).
Each month it withholds 9 percent, PYG 720,000, adds its own 16.5 percent, PYG 1,320,000, and pays PYG 2,040,000 (US$348) to IPS between the 1st and the 10th of the next month. The manager's net pay before income tax is PYG 7,280,000.
The manager breaks an arm on the job and is off 40 days. IPS pays a work accident subsidy of 75 percent of the four month average, about PYG 8,000,000 for the period, because coverage applies from day one (MTESS guide section 4.8).
The manager previously worked in Argentina: under the Mercosur multilateral social security agreement, Argentine periods can be totalized for a future IPS pension (MTESS guide section 5.8).

Step by step

Obtain the employer's IPS registration and REI access code before the first payroll (MTESS guide section 3.7).
Register each worker with IPS (alta) from day one, and register dependants so they get medical coverage.
Declare salaries and pay contributions monthly between the 1st and the 10th; late payment brings surcharges.
Report work accidents to IPS within 8 days, and to MTESS occupational safety within 8 days when incapacity exceeds 3 days.
Process deregistration (baja) when the worker leaves, and tell departing workers about voluntary continuity.

Common traps

The employer rate is often quoted as 14 percent from Ley 98/1992; the actual total employer charge is 16.5 percent including the 2.5 percent in art. 17 bis.
An unregistered or late employer pays maternity subsidies itself and reimburses IPS for work accident care (Ley 5508/2015 art. 12; DL 1860/1950 art. 48 and 49).
Full medical entitlement takes 36 months of contributions, so new hires from abroad may want private cover in the first years.
Pension amounts depend on the reform phase in: the averaging period grows one month per month until 2032, so pension projections change each year.
Bank staff contribute to the bank employees' pension fund, not IPS.

Sources

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