Payroll and Benefits Guide Peru
Last updated: May 16, 2023
Employer Payroll Contributions
10% of minimum wage
Family Allowance (only for workers with children)
Health Insurance (National Health System (EsSalud)/ Private Health System (Entidades Promotoras de Salud or EPS)
The Peru Working Compensation or Compensation for Length of Service (CTS).
Total Employment C
*The CTS in Peru is mandatory only for the private sector and has specific minimum eligibility, work a minimum daily average of 4 hours, and applies to an appropriate company size.
Employer Payroll Contributions
|9.00%||Total Employment Cost|
|9.00%||Health Insurance (National Health System (EsSalud)/ Private Health System (Entidades Promotoras de Salud or EPS)|
Employee Payroll Contributions
|12.50% to 13.00%||Total Employee Cost|
|12.50% to 13.00%||Pension Fund (13% for employees affiliated with the National Pension System or circa12.5% for employees affiliated with the Private Pension System)|
Employee Income Tax
|1 Tax Unit (UIT) = 4,600 PEN|
|8.00%||Up to 5 UIT|
|14.00%||From 5 UIT to 20 UIT|
|17.00%||From 20 UIT to 35 UIT|
|20.00%||From 35 UIT to 45 UIT|
|30.00%||More than 45 UIT|
The national minimum wage in Peru is 1,025 PEN per month.
MINIMUM WAGE (PER MONTH)
Employees are paid monthly.
13th-month and 14th-month payments are mandatory in Peru. The employer must pay an additional month’s salary twice a year, once at the end of July around Peru’s Independence Day and the other at the end of the year during Christmas.
Full-time employment is 8 hours per day, 48 hours per week.
All overtime hours in excess of 48 hours a week are paid at an overtime compensation rate. This rate is stipulated in the employment contract/collective agreements. 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. Exemptions might apply to managers, supervisors, on-call workers, and non-supervised workers.
Paid Time Off
Employees are entitled to paid annual leave of 30 days. At least 15 days must be used within the year and the remaining can cash out. 15 of the 30 days entitlement may be divided into two periods and the remainder is to be taken in at least one-day increments. Domestic workers are entitled to 15 days of paid annual leave.
An employee cannot take annual leave alongside any other leave entitlement such as maternity leave, and sick leave.
Public holidays that fall on the weekend are usually lost.
In Peru, employees are entitled to 365 days of paid sick leave. The employer compensates the first 20 days of sickness at 100% salary and the remaining 245 days are paid initially by the employer at 70-80% and then the social security reimburses this sum.
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.
The National Health System (EsSalud) or the Private Health System (Entidades Promotoras de Salud or EPS) compensates maternity leave. To qualify for maternity benefits, the employee must have completed three months of service during the six months before leave.
Mothers also receive 30 days of paid adoption leave following the adoption of a child until the age of 12 years old.
PAID MATERNITY LEAVE (DAYS)
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.
There are no provisions in the law regarding parental leave.
There are no provisions in the law regarding additional statutory leave.
The termination process varies according to how the employment agreement and collective agreement are in place and is based on the type of contract and reason for termination. Employees should receive at least six days’ written notice so that they can respond or prove their capability within the company. The employer must provide the written termination to both the employee and the trade union.
Employees dismissed without cause are typically entitled to severance pay of up to 12 months.
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.
There is no statutory severance entitlement, but an indemnity is payable in the event of unfair dismissal (ie, where the company does not have a prescribed legal ground to dismiss employees).
In the event of unfair dismissal, employees are entitled to receive a legal indemnity in the amount of: 1.5 times their monthly remuneration for each year of service if the employee is on an indefinite employment contract.
Periods of time less than 1 year must be paid proportionally 1.5 times their monthly remuneration for each month remaining until the end of the fixed-term contract, if applicable. In both cases, such indemnity may not exceed 12 monthly salaries.
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.
A foreigner wishing to work in Peru must complete the new TUPA (Texto Unico de Procedimientos Administrativos; Single Text of Administrative Procedures) process.
Applying for a Peruvian resident work visa requires the following:
- Interpol clearance – Ficha de canje internacional
- Receipt for the paid application fee
- Receipt for the paid application fee for changing to a resident visa
- Legally signed and by Labour Ministry approved work contract with a duration of at least 12 months
- Police clearance certificate, criminal record, and judicial matters check issued in the country of origin and if the applicant lived in another country before coming to Peru, in the land of residence covering the last five years *
- SUNAT registration including RUC (Peruvian tax number) showing the employing company is active
- Company registration of the employing company showing the legal representative
- Sworn statement of the legal representative of the company declaring that he oversees hiring personnel and why he needs to employ a foreigner
*For the past years, a sworn statement stating that the foreigner has a clean criminal record and no previous convictions was enough to satisfy Migraciones. However, the new Tupa and Supreme Decree now state that a police clearance certificate, criminal record, and judicial matters check issued in the country of origin and if the applicant lived in another country before coming to Peru, in the country of residence covering the last five years is required. “Antecedentes Policiales, Penales y Judiciales.”
Once this is complete, the foreigner will receive confirmation that your work visa is approved, payment has been made and the person is now registered in the foreigner database and issued the carné.
The Government of Peru passed legislation on remote work aiming at recognizing teleworking as a valid way of carrying out work. This legislation states that teleworkers and onsite employees must have the same rights
and that the employer and employee should agree on the provisions of teleworking in an employment agreement.
Such agreement must be stored in a digital medium and must include information on the teleworking period, frequency (total or partial), the work schedule, applicable digital platforms and technologies, communication and supervision, mechanisms, notice period for the employee to attend in person to employer’s premises and the teleworker domicile.
Unless agreed otherwise between the parties, employers should provide necessary work tools and bear the cost of electricity.
Employers have a duty to ensure the safety and health of their employees at work. Therefore, employers should inform teleworkers of all the risks that may arise from their work duties.
Teleworkers should allow their employer to visit their remote workplace. Teleworker may instead complete a self-examination of their workplace as authorized by the Peruvian Ministry of Labor.
Unless otherwise agreed between the parties, the teleworker must comply with a work schedule.
Employers must respect teleworkers’ right to digitally disconnect after work and their right to privacy of communications. However, teleworkers must be available to their employer during the working day and fully comply with their work obligations.
Prior notice in writing and agreement of the employer and the teleworker is needed if any of them wants to reverse the teleworking arrangement.
The standard rate of VAT in Peru is 18.00%.
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Public Holidays Calendar
|Sunday||Jan-1||New Year's Day|
|Thursday||Jun-29||St. Peter & St. Paul Day|
|Saturday||Jul-29||Independence Day Holiday|
|Wednesday||Aug-30||Santa Rosa De Lima|
|Sunday||Oct-8||Battle of Angamos|
|Wednesday||Nov-1||All saints’ Day|
|Friday||Dec-8||Feast of the Immaculate Conception|
|Saturday||Dec-9||Battle of Ayacucho|