As of July 1, 2025, Paraguay will implement its scheduled adjustment to the national minimum wage. This change follows the standard procedure, carried out annually in June by the National Minimum Wage Commission (CONASAM), based on inflation data and enacted through presidential decree.
New Minimum Wage for 2025
According to Decree No. 4122/2025, the new minimum wage effective July 1 is:
- 2,899,048 Paraguayan GuaranĂes per month
- 111,502 GuaranĂes per working day
This represents an increase of 3.6%, which directly reflects the official Consumer Price Index (CPI) reported by the Central Bank of Paraguay (BCP) for the period from May 2024 to May 2025.
This moderate adjustment is the result of a legally anchored, inflation-based wage system, required by Article 255 of Paraguay’s Labor Code and reviewed annually.
Background: Wages, Prices, and Labor Structure
The wage increase directly affects approximately 269,000 formally employed individuals, representing about 15.9% of the registered workforce. In addition, over 40% of formal salaries fall at or slightly above the minimum wage level.
A large portion of the population works in the informal sector, outside the scope of wage protection laws. Nonetheless, the official minimum wage serves as a benchmark across both public and private sectors, influencing various contractual and regulatory standards.
Adjustments Linked to the Minimum Wage
The revised minimum wage affects multiple areas, including:
- Social Security Contributions (IPS): Employer and employee contributions are calculated based on the updated gross wage.
- 13th Salary (Aguinaldo): Legally mandatory, equal to one month’s salary.
- Bank Deposit Guarantees: The state-insured deposit limit equals 75 minimum wages, increasing to approximately Gs. 217 million.
- Administrative Fees and Legal Requirements: Charges related to migration, legal proceedings, and registrations, when linked to wage multipliers, are also affected.
These adjustments are implemented automatically and annually, using the current minimum wage as the reference point.
Calculation Basis: Price Trends and Legal Framework
Paraguay’s minimum wage is calculated based on the Consumer Price Index (IPC), which tracks the price development of a representative basket of goods and services. The index is published monthly by the Central Bank of Paraguay (BCP) and serves as the sole reference for annual wage revisions.
The 3.6% increase in 2025 is considered moderate compared to regional inflation rates. The government adhered strictly to the Conasam’s recommendation, maintaining consistency with the legal framework.
Ongoing discussions include the possibility of replacing the CPI as the sole reference with a worker-focused cost-of-living basket (“canasta básica obrera”), to better reflect the real cost of living. A potential implementation of this model is under evaluation for 2026 or later.
Wage Composition and Net Income
The gross monthly minimum wage of 2,899,048 Gs is subject to deductions and contributions:
- Employee social security contribution: 9%
- Paid vacation: Based on length of service
- Annual bonus (Aguinaldo): One month’s wage, legally required
After the 9% deduction for social security, the net wage is approximately 2,638,000 Gs. Additional benefits may apply depending on sectoral agreements or individual employment contracts.
Inflation and Economic Outlook
Paraguay continues to show relatively low inflation in 2025. While many Latin American countries face double-digit inflation, Paraguay’s rate remains in the 3–4% range, thanks to conservative monetary policy, low public debt, and steady domestic growth.
The 2025 wage adjustment reflects this trend, offering a calibrated response to price developments without imposing excessive burdens on employers or state resources.
Key Figures at a Glance
| Category | Value as of July 1, 2025 |
| Monthly Minimum Wage | 2,899,048 Gs |
| Daily Minimum Wage | 111,502 Gs |
| CPI-based Adjustment 12 months | 3.6% |
| Directly Affected Workers | Approx. 269,000 (15.9%) |
| Deposit Insurance Limit (75 MW) | 217,428,600 Gs |
| Net Wage After 9% Deduction | 2,638,133 Gs |
Conclusion
The latest wage adjustment demonstrates Paraguay’s predictable and legally consistent wage policy. By linking the minimum wage to actual inflation rates, the country maintains a clear balance between purchasing power and economic feasibility.
At the same time, the discussion around a new calculation model shows that the system is under continuous development, with the goal of better addressing the realities of working households in the years ahead.