Social Security (IPS) in Paraguay
Social security in Paraguay is administered by the IPS (Instituto de Previsión Social), the main public social security institution. It provides healthcare coverage, retirement pensions, disability benefits, and maternity/paternity leave to contributing workers and their dependents.
How It Works in Paraguay
The IPS system requires mandatory contributions from both employees and employers. Employees contribute 9% of their gross salary, and employers contribute 16.5%, for a total of 25.5%. Self-employed individuals can make voluntary contributions. The system provides public healthcare services through IPS hospitals and clinics, retirement pensions after 25 years of contributions (minimum 60 years old), disability pensions, and maternity benefits. Private sector employees are mandatorily enrolled. Independent professionals and business owners can opt into the system voluntarily.
Global Comparison
Paraguay's total social security contribution rate of 25.5% is moderate by Latin American standards but lower than European rates. France charges about 45%, Germany about 40%, and Brazil about 31%. The US combined Social Security and Medicare rate is 15.3%. Paraguay's system provides more comprehensive coverage (including healthcare) compared to the US system but less than most European programs.
Frequently Asked Questions
Do expats with permanent residency need to contribute to IPS?
If you are employed by a Paraguayan company, IPS contributions are mandatory regardless of nationality. If you are self-employed or living off foreign income, IPS contributions are voluntary. Many expats who are self-employed or retired choose private health insurance instead of contributing to IPS, as the private healthcare system in Paraguay is generally preferred.
What healthcare benefits does IPS provide?
IPS provides comprehensive healthcare coverage at IPS hospitals and clinics including consultations, hospitalization, surgery, medications, laboratory tests, maternity care, and dental care. Coverage extends to the contributor and their dependents (spouse and children under 18). The quality of care varies by facility, and many contributors supplement IPS with private health insurance.
Can I receive a pension from IPS if I leave Paraguay?
Yes. Once you have vested your pension right (minimum 25 years of contributions and age 60), you can receive your IPS pension payments even if you relocate outside Paraguay. Paraguay has social security agreements with some countries that allow contribution periods to be combined. Pension payments can be deposited to a Paraguayan bank account and transferred internationally.
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Last reviewed: February 2026