Answer
BPS is Uruguay’s social security system. Contributions relate not only to future pensions, but also to social insurance, medical coverage and rights, which depend on the status and form of activity.
For self-employed people, obligations to BPS may remain even when income tax is low or nonexistent. Therefore, the statement that “a self-employed person pays no taxes except into the pension fund” oversimplifies the situation: contributions, registration, bills, and accounting depend on the type of activity, turnover, and chosen form.
Before starting work, it is important to calculate not only the tax rate but also the total monthly cost: BPS contributions, accounting, banking, possible VAT, and administrative fees. This helps compare net income from self-employment with an employee’s salary without assuming that all revenue is take-home pay.