60.1% of non-agricultural workers are informally employed
According to Paraguay's Instituto Nacional de Estadística (INE), around 1.66 million people working in non-agricultural activities were informally employed in 2025. That corresponds to 60.1% of the workers covered by the estimate.
The figure does not refer only to conventional employees. The statistics cover different forms of employment. Under the INE methodology, dependent workers are considered informal when, among other criteria, they do not contribute to a retirement or pension system. For self-employed workers, a key criterion is whether they are registered in the Registro Único de Contribuyentes (RUC) for their economic activity.
The figures come from the 2025 Encuesta Permanente de Hogares Continua (EPHC). Among those excluded from the estimate are Boquerón and Alto Paraguay, Indigenous communities and people living in collective dwellings.
What the “prosperity threshold” means here
The “prosperity threshold” referred to in the headline is not an official poverty line, prosperity measure, minimum wage or living-wage standard.
It is derived from Purdue University research into the relationship between income and subjective well-being. The researchers examined the income level beyond which additional earnings are statistically associated with relatively little further improvement in life satisfaction. This is known as an income-satiation point.
Remitly adapted these findings to individual countries in 2026, adjusting them for factors including purchasing power and inflation. For Paraguay, the resulting estimate was approximately US$18,600 per year.
In the international comparison, this was set against an average annual wage of approximately US$6,300 based on International Labour Organization (ILO) data. That represents around 33.7% of the estimated satiation level and placed Paraguay 49th among the 50 countries in that comparison.
This does not mean that a person earning less than US$18,600 is automatically poor, unhappy or not prosperous. The figure is a statistical reference derived from well-being research. It is not a subsistence threshold or a recommendation for how much income a household in Paraguay needs.
How does this compare with our Gs. 2.69 million median?
An earlier analysis of the 2025 EPHC using Paraguayan microdata found a median of about Gs. 2.69 million and an average of about Gs. 3.27 million per month among people reporting positive income from their main occupation.
The full calculation and methodology are explained in “What people in Paraguay earn: why the median tells a different story from the average”.
At first glance, those figures may appear difficult to reconcile with the US$6,300 annual wage used in the international comparison. They are not contradictory.
The statistics come from different data sources and use different definitions. The EPHC analysis is calculated directly from Paraguayan microdata and examines reported income from the main occupation. The average used by Remitly, by contrast, comes from an international wage dataset based on ILO data.
Median and average also answer different questions. Comparatively high incomes pull an average upward more strongly, while the median identifies the point at which roughly half of the represented population earns less and half earns more.
The US$6,300 figure should therefore not simply be converted into guaraníes and compared directly with the Gs. 2.69 million median as though both statistics measured exactly the same population and the same definition of income.
Low income and informal employment frequently occur together
The INE data show a clear relationship between income and informal employment.
Among salaried workers earning less than one minimum wage in 2025, 79.8% were informally employed. Among those earning at least three minimum wages, the rate was considerably lower at 26.2%.
This does not mean that every low-paid job is informal. It does show that workers at the lower end of the income distribution are much more likely to work without the characteristics used by INE to define formal employment.
There are also substantial differences between sectors. In 2025, INE recorded particularly high informality rates in construction and in commerce, restaurants and hotels.
More IPS contributors despite persistent informality
At the same time, there are signs of increasing formalization.
According to the latest figures available through the Labour Ministry's SIMEL labour-market information system, the general regime of the Instituto de Previsión Social (IPS) had 848,280 contributors in June 2026. That was 6.1% more than a year earlier.
This figure cannot simply be subtracted from the approximately 1.66 million informal workers. The two statistics measure different populations. The INE rate describes non-agricultural workers according to EPHC criteria, while the IPS figure counts contributors registered in a particular social-security system.
Both developments can therefore occur at the same time: the number of registered and insured workers can rise while a large part of the wider labour market remains informal.
Why formal employment matters beyond retirement
Informal employment should not be confused with unemployment. The people concerned are working and earning income, but their employment fails to meet at least one of the criteria used to define formal work.
This can have long-term consequences. Missing contributions make it harder to build entitlement to a contributory pension. Depending on the circumstances, access to benefits related to illness, disability or death can also be more limited.
The two central sets of figures in this article should therefore be interpreted separately: 60.1% describes the structure of Paraguay's non-agricultural labour market. The figures of US$6,300 and US$18,600, by contrast, come from an international comparison between an average wage and a modelled income level associated with subjective well-being.
Together they do not form a single measure of “prosperity”. Instead, they illustrate two different challenges: for many people in Paraguay, what matters is both how much their work pays and under what conditions that income is earned.