Payroll & Employment Guide Peru

Employment contracts in Peru must be in written form and comply with local labour regulations. They should clearly define job roles, compensation, benefits, probation period, and termination terms. Both indefinite and fixed-term contracts are recognised.

Notice periods: Typically 30 days, but varies depending on the reason for termination.

Termination of employment: Must follow due process, including valid justification for dismissal, advance notice, and compensation if required.

Peruvian labour law mandates a wide range of employee benefits. Offering both the required and additional perks helps businesses stay competitive.

Mandatory benefits: Social security (health insurance, pensions, and workplace accident insurance), bonuses, Compensation for Length of Service (CTS), severance pay, etc
Common perks: Family allowances, transportation allowances, meal allowances, shift differentials, private health insurance, professional development, flexible work arrangements.

Leave policies: Annual leave, sick leave, maternity leave, paternity leave, and public holidays.

Peru’s tax system includes both employer and employee obligations. Employers are responsible for withholding income tax and contributing to healthcare and pensions.

• Income tax: Individuals are taxed progressively, with rates ranging from 8% to 30% based on income brackets.

*Note: Fifth category income tax withholdings depend on the updated UIT (Tax Unit) value.

• Corporate income tax: Standard rate is 29.5% on net profits.
• Value Added Tax (VAT): 18%
• Social security contributions: Employers and employees contribute to health insurance, pensions, and accident insurance.

Employers in Peru must pay employees monthly according to the employment contract. All mandatory contributions, declarations, and tax payments must also be made on time.

Salary payment deadline: Typically monthly, per contract agreement.

Taxes and contributions payment deadline: Monthly remittance of income tax, health insurance (EsSalud), and pension contributions.

Payroll declarations deadline: Monthly submission detailing salaries, taxes, and contributions.

Payroll currency: Peruvian Sol (PEN)

Other payroll-related information: Seguro Vida Ley costs can vary based on salary (approximately 1% of the employee’s annual salary).

Peruvian employment law is governed by the country’s Labour Code. It outlines the legal framework for employment, including contract types, working hours, benefits, and employer obligations.

Minimum wage: PEN 1,130 per month

Probation period: Up to 3 months

Using EOR services in Peru allows you to legally employ individuals in the country without opening legal entities there. The EOR takes over all the legal responsibilities as an official employer, including:

• Legal employment and contracts
• Payroll processing
• Tax withholding
• Benefits administration
• Onboarding/offboarding employees

Using PEO services in Peru provides HR and administrative support, while you remain the legal employer. PEO services are ideal for employers who already have legal entities in Peru but need support to manage their workforce operations, including:

• HR support and workforce administration
• Payroll and benefits management
• Compliance and local labour law guidance
• Employment contracts assistance

Native Teams provides a payroll calculator adjusted per Peru’s labour laws. Estimate gross-to-net salaries, tax withholdings, and employer costs in Peru with our localised calculator. Designed to meet all payroll and compliance requirements.

Here is a list of public holidays in Peru: