Employer of Record Guide in Peru
Peru's growing tech sector and skilled workforce make it an attractive destination for global expansion, but navigating local employment laws requires careful attention to detail. Our comprehensive guide breaks down everything you need to know to hire compliantly and build your team in this dynamic South American market.
Capital City
Currency
Languages
Population size
Services available in this country:
Key stats and facts
From Lima's bustling business district to emerging tech hubs in Arequipa and Trujillo, Peru offers access to in-demand skills like software development and engineering at competitive rates. Understanding the local market dynamics—including a 14% federal tax rate and multilingual workforce—sets the foundation for successful expansion.
Major economic hubs
Skills in demand
Currency
Language
GDP per Capita
Standard Tax Rate
Your EOR guide in Peru
Getting payroll, benefits, and compliance right in Peru means understanding the nuances of mandatory bonuses, progressive tax brackets, and comprehensive leave policies. This detailed breakdown covers everything from minimum wage requirements to holiday pay rules, giving you the clarity needed to manage your Peruvian workforce confidently.
Minimum Wage
Peru's national minimum wage is PEN 1,130 per month, effective January 1, 2025. This applies to all private sector employees working full-time schedules.
| Category | Amount (PEN) | Effective Date |
|---|---|---|
| National Minimum Wage | 1,130/month | January 1, 2025 |
| Daily Equivalent | 37.67/day | January 1, 2025 |
| Hourly Equivalent | 4.71/hour | January 1, 2025 |
Note: The minimum wage is reviewed annually and adjusted based on economic conditions and inflation rates.
Payroll Cycle
- Monthly: Most common payment frequency in Peru
- Bi-weekly: Allowed but less common
- Weekly: Permitted for certain industries
Employers must pay salaries no later than the third working day of the following month for monthly cycles.
Individual Income Tax
Peru uses a progressive tax system for employment income:
| Annual Income (PEN) | Tax Rate |
|---|---|
| Up to 31,500 | 8% |
| 31,501 to 126,000 | 14% |
| 126,001 to 220,500 | 17% |
| 220,501 to 441,000 | 20% |
| Over 441,000 | 30% |
Tax Residency Criteria
Individuals are considered Peruvian tax residents if they:
- Reside in Peru for more than 183 days in a 12-month period, or
- Have their centre of vital interests in Peru
Tax residents pay income tax on worldwide income, while non-residents pay only on Peruvian-source income.
Employer Payroll Contributions
Employers in Peru must contribute to several mandatory social security programs:
| Contribution Type | Employer Rate | Employee Rate | Total |
|---|---|---|---|
| Health Insurance (EsSalud) | 9% | 0% | 9% |
| Work Risk Insurance (SCTR) | 0.53% - 1.84% | 0% | 0.53% - 1.84% |
| National Pension System (SPP) | 0% | 10% + commission | 10% + commission |
| Total Employer Cost | ~10% - 11% | ~10% | ~20% - 21% |
Note: Work Risk Insurance rates vary by industry risk level. Additional contributions may apply for specific sectors.
Working Hours
The standard work schedule in Peru is:
- 8 hours per day
- 48 hours per week (Monday through Saturday)
- 6 days per week (with Sunday as mandatory rest day)
Alternative schedules are permitted with employee agreement, such as:
- 10 hours per day, 4.8 days per week
- Flexible hours within daily and weekly limits
Overtime Pay
- Daily overtime: Hours worked beyond 8 hours per day are paid at 125% of regular hourly rate
- Weekly overtime: Hours beyond 48 per week are paid at 125% of regular rate
- Holiday/Sunday work: Paid at 200% of regular rate
- Maximum overtime: 20 hours per week, requiring employee consent
Bonus Payments
Peru mandates several annual bonus payments:
| Bonus Type | Amount | Payment Date |
|---|---|---|
| Gratificación (July) | 1 month's salary | July 15 |
| Gratificación (December) | 1 month's salary | December 15 |
| Vacation Bonus | 1 month's salary | Before vacation |
| CTS (Compensation for Time of Service) | 1 month's salary | May 15 & November 15 |
Full-Time vs. Part-Time
- Full-time: 48 hours per week or more
- Part-time: Less than 48 hours per week (minimum 4 hours per day)
Part-time employees receive proportional benefits based on hours worked.
Vacation Leave
- Entitlement: 30 calendar days per year after 12 months of continuous service
- Accrual: Earned monthly (2.5 days per month)
- Payment: Full salary plus vacation bonus (equal to vacation pay)
- Timing: Must be taken within one year of earning, with employer approval
Sick Leave
- Paid sick leave: Up to 20 days per year at full salary (employer pays first 20 days)
- Extended illness: Social security covers beyond 20 days at reduced rate
- Medical certificate: Required for absences over 3 consecutive days
- Chronic conditions: Special provisions for ongoing medical treatment
Maternity Leave
- Duration: 98 days (49 days before birth, 49 days after)
- Payment: Full salary paid by social security (EsSalud)
- Flexibility: Up to 49 days can be transferred to post-birth period
- Job protection: Position guaranteed upon return
Paternal Leave
- Duration: 10 consecutive calendar days
- Payment: Full salary paid by employer
- Timing: Must be taken within 30 days of birth
- Multiple births: Additional days for twins or more
Bereavement Leave
- Duration: 3 days for immediate family members
- Payment: Full salary paid by employer
- Qualifying events: Death of spouse, children, parents, or siblings
- Documentation: Death certificate required
Personal & Family Leave
- Family emergency: Up to 3 days per year (unpaid)
- Medical appointments: Reasonable time for medical care
- Civic duties: Time off for voting, jury duty, military service
- Study leave: Available for work-related education (negotiable)
Summary
| Leave Type | Duration | Paid? | Funding |
|---|---|---|---|
| Vacation | 30 days/year | Yes | Employer |
| Sick Leave | 20 days/year | Yes | Employer (then EsSalud) |
| Maternity | 98 days | Yes | Social Security |
| Paternity | 10 days | Yes | Employer |
| Bereavement | 3 days | Yes | Employer |
| Family Emergency | 3 days/year | No | — |
Termination Types
Termination With Just Cause:
- Requires serious misconduct or performance issues
- No compensation required
- Must follow due process and documentation requirements
Termination Without Cause:
- Requires compensation and proper notice
- Must comply with labour stability protections
- Subject to severance payment requirements
Notice Period Requirements
Peru does not require advance notice for termination, but compensation is required:
| Length of Employment | Compensation Required |
|---|---|
| Less than 3 months | None (probationary period) |
| 3 months - 1 year | 1.5 months' salary |
| 1 - 4 years | 1.5 months' salary |
| 4+ years | 1.5 months' salary per year (max 12 months) |
Severance Pay
Compensation for Arbitrary Dismissal (CAS):
- 1.5 months' salary per year of service
- Maximum of 12 months' salary
- Calculated on last month's total compensation
Additional payments may include:
- Accrued vacation time
- Proportional gratificaciones
- CTS deposits
Probationary Periods
- Standard period: 3 months for most positions
- Skilled positions: Up to 6 months
- Management roles: Up to 12 months
- During probation: Either party can terminate without cause or compensation
Final Pay Requirements
Employers must provide final payment within 48 hours of termination, including:
- Final salary through last day worked
- Accrued vacation pay and bonus
- Proportional gratificaciones
- Any severance compensation due
Legal Protections
Employees are protected from termination based on:
- Pregnancy or maternity leave
- Union membership or activities
- Filing labour complaints
- Discrimination based on protected characteristics
National Holidays (2025)
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Maundy Thursday | April 17 |
| Good Friday | April 18 |
| Labour Day | May 1 |
| Feast of Saints Peter and Paul | June 29 |
| Independence Day | July 28 |
| Independence Day (continued) | July 29 |
| Battle of Junín | August 6 |
| Feast of Santa Rosa de Lima | August 30 |
| Battle of Angamos | October 8 |
| All Saints' Day | November 1 |
| Immaculate Conception | December 8 |
| Christmas Day | December 25 |
Regional Holidays
Each region and municipality may declare additional local holidays. Common regional observances include:
- Lima: Saint Rose of Lima (August 30)
- Cusco: Inti Raymi (June 24)
- Arequipa: Anniversary of Arequipa (August 15)
Holiday Pay Rules
- Working on holidays: Employees receive triple pay (200% premium plus regular pay)
- Holiday falling on rest day: Compensatory day off or additional pay
- Eligibility: All employees entitled to holiday pay regardless of tenure
Required Documentation
Employment Contract Requirements:
- Job title and description
- Salary and benefits
- Working hours and location
- Probationary period terms
- Termination conditions
Employee Documentation:
- National ID (DNI) or foreign ID
- Tax identification number (RUC if applicable)
- Social security registration
- Bank account details for payroll
Work Authorization
Foreign nationals require:
- Valid work visa or residence permit
- Work authorization from immigration authorities
- Registered address in Peru
- Tax residency documentation
Legal Compliance
Mandatory registrations:
- Ministry of Labour (MTPE) employment registration
- Social security (EsSalud) enrollment
- Pension system registration (SPP or SNP)
- Work risk insurance (SCTR) coverage
Contractual Elements
Required contract clauses:
- Intellectual property assignment
- Confidentiality and non-disclosure terms
- Non-compete restrictions (if applicable)
- Dispute resolution procedures
Implementation Timeline
| Step | Timeline |
|---|---|
| Job offer accepted | Day 0 |
| Employment contract signed | Day 1-3 |
| Government registrations | Day 3-7 |
| Social security enrollment | Day 5-10 |
| Payroll system setup | Day 7-14 |
| First day of work | Day 10-14 |
Worker Classification
Peru strictly distinguishes between employees and independent contractors:
Employees (Trabajadores):
- Subject to labour law protections
- Entitled to benefits and social security
- Work under employer direction and control
Independent Contractors (Locadores):
- Governed by civil contract law
- Responsible for own taxes and benefits
- Maintain operational independence
Misclassification risks: Significant penalties and back-payment of benefits if contractors are reclassified as employees.
Unionization Rights
- Right to organize: Protected under Peruvian constitution
- Collective bargaining: Mandatory for employers with unionized workforce
- Strike rights: Legal with proper procedures and notice
- Union dues: Automatic deduction if authorized by employee
Cultural Considerations
Work-life balance expectations:
- Family time highly valued
- Extended lunch breaks common (1-2 hours)
- Punctuality important but relationships prioritized
- Formal communication preferred in business settings
Diversity and inclusion:
- Anti-discrimination laws protect against bias based on race, gender, religion, and sexual orientation
- Indigenous language rights recognized
- Gender equality initiatives increasingly important
Remote Work Framework
Legal provisions:
- Remote work (teletrabajo) legally recognized since 2013
- Enhanced regulations implemented during COVID-19
- Employer must provide necessary equipment and tools
- Same labour rights apply as in-office employees
Employer obligations:
- Ensure safe home working environment
- Provide technology and connectivity support
- Maintain regular communication and supervision
- Respect right to disconnect outside working hours
What We Handle
Borderless AI manages all aspects of compliant hiring in Peru:
- Employment contract creation and management
- Payroll processing and tax compliance
- Social security and benefits administration
- Government registrations and reporting
- Local labour law compliance monitoring
- Employee support in Spanish
Built-in benefits packages for Peru
When the world is your competition, it pays to incentivize new hires and existing alike. Borderless AI benefits packages typically inlucde:
Medical Insurance
Dental Insurance
Retirement Contribution
Life Insurance
Vision Insurance
Explore other countries
Unlock global hiring potential
Simplify your payroll and hiring processes today.
