Payroll and Benefits Guide - Peru

Peru
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Currency

Peruvian Sol
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Capital

Lima
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Employer Taxes

9.00%

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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Peru is located in South America and is bordered by Ecuador, Colombia, Brazil, Bolivia, and Chile.

Machu Picchu, a famous Inca citadel, is one of Peru’s most iconic landmarks and a UNESCO World Heritage site.

The official languages of Peru are Spanish, Quechua, and Aymara.

Peru is the world’s second-largest producer of silver and a significant producer of gold, copper, and zinc.

Peru is known for its colorful festivals, such as the vibrant Carnival in February and the lively Inti Raymi celebration in June.

The Andean condor, one of the world’s largest flying birds, can be found soaring in the Peruvian skies.

Peru

Contributions

Employee Payroll Tax

Contribution TypeRate
Pension Fund12.50% to 13.00%

Employer Payroll Tax

Contribution TypeRate
Family Allowance10% of minimum wage
Health Insurance9.00%
The Peru Working Compensation or Compensation for Length of Service(CTS).9.72%

Payroll

Payroll Cycle

The payroll cycles are monthly.

13th Salary

In Peru, employers are required to provide 13th-month and 14th-month payments, which are additional month’s salaries given twice a year, around Independence Day and Christmas.

Work Hours and Week

Full-time employment is 8 hours per day, 48 hours per week.

Overtime

The first two hours of overtime cannot be compensated with less than 25.00% of the total remuneration of the employee.

For every additional hour of overtime, the surcharge cannot be less than 35.00% per hour.

Peru

Leave

Paid Time Off

Employees are entitled to paid annual leave of 30 days.

Public Holidays

There are 13 holidays.

Sick Days

Employees receive 365 days of paid sick leave, with the employer covering the first 20 days at full salary and the remaining 245 days initially paid by the employer at 70-80% salary, later reimbursed by social security.

Maternity Leave

Female employees are entitled to 98 days of paid maternity leave; 49 days before the birth of the child and 49 days following the delivery. In the event of multiple or complicated births, the leave can be extended by 30 days.

Paternity Leave

The father/partner is entitled to 10 days of paid paternity leave after the child’s birth; the entitlement increases to 20 days of leave in the case of a complicated or premature birth.

Parental Leave

There are no provisions in the law regarding parental leave.

Termination

Termination Process

The termination process in Peru depends on the employment and collective agreements, contract type, and reason for termination, with a minimum six days’ written notice required. Written termination should be provided to both the employee and the trade union.

Employees dismissed without cause are typically entitled to severance pay of up to 12 months.

Notice Period

Employers must give 6 to 30 days’ notice depending on the reason for dismissal. If an employee is resigning, they must provide an employer with at least 30 days’ notice.

Severance Pay

In Peru, there is no statutory severance entitlement, but employees are entitled to a legal indemnity if they are unfairly dismissed, which amounts to 1.5 times their monthly remuneration for each year of service on an indefinite contract.

If the employment period is less than one year, employees are entitled to a proportional indemnity of 1.5 times their monthly remuneration for each remaining month on a fixed-term contract, not exceeding 12 monthly salaries.

Probation Period

Probation Period

In Peru, probation periods are outlined in the employment contract. Typically, the probational period lasts for three months.

The probationary period may be extended for skilled workers or employees in positions of trust to six months and one year for managerial roles.

Immigration

Foreign individuals seeking employment in Peru are required to undergo the TUPA (Texto Unico de Procedimientos Administrativos; Single Text of Administrative Procedures) process.

Different work visas/permits are available.

For a Work Visa, the below documents need to be completed:

  • Interpol clearance
  • Receipt for the paid application fee
  • Passport
  • Police clearance certificate, criminal record
  • SUNAT registration including RUC (Peruvian tax number) showing the employing company is active

For Work Permits

Work Visa (Residente Trabajador)

Temporary Work Visa (Residente Temporal)

Business Visa (Residente de Negocios)

VAT

The standard rate of VAT in Peru is 18.00%.