Employer of Record in Peru: how to hire compliantly without an entity.
Employ Latam is an employer of record in Peru. We become the legal employer for your hire, so you can employ full-time staff there without setting up an entity. Locally compliant contracts, monthly payroll, statutory benefits, taxes. Below: what the law actually requires, in plain English.
- Country
- Peru
- Local name
- Perú
- ISO code
- PE
- Region
- South America
- Phone code
- +51
- Employ Latam coverage
- Full EOR + contractor payments
Last updated July 2026
Overview
Peru is one of the larger labor markets in Employ Latam's network, with a well-documented statutory framework covering leave, gratifications, and termination. Hiring here means budgeting for more than base salary: two annual gratifications, a CTS savings deposit, and employer contributions all add to total cost. An EOR handles the registration, payroll filings, and statutory payments so you don't need a local entity to bring someone on.
The employment relationship in Peru is presumed from how work is actually performed, not from what a contract calls it. Personal, paid work carried out under another party's direction is treated as employment, regardless of whether the paperwork says "independent contractor." This matters when structuring a role: control over hours, tools, and supervision determines status more than the label on the agreement.
Fixed-term contracts require a genuine statutory reason and a written justification, with category-specific duration limits. Indefinite contracts can legally exist without a written agreement, but a clear written record protects both sides and is standard practice.
Country at a glance
| Category | Detail |
|---|---|
| Currency | Peruvian sol (PEN) |
| Working week | 48 hours, standard maximum |
| Standard workday | 8 hours |
| Probation period | 3 months (extendable up to 6 months for qualified/trusted roles, up to 1 year for management) |
| Notice period | No general statutory notice for dismissal; resignation normally requires 30 days' written notice from the employee |
| 13th-month salary | Two statutory gratifications per year (July and December), each equal to one monthly salary for a full qualifying semester |
| Payroll cycle | Monthly is standard; weekly and fortnightly are also legally recognized |
Beyond the two gratifications, employers fund CTS (a severance savings benefit deposited each May and November), statutory life insurance from day one of employment, and a family allowance for employees with qualifying children. Employer social contributions run at 9.63% (EsSalud health insurance, life insurance, and occupational accident insurance combined), while employees contribute 13% toward pension through ONP, or 10% plus fees if enrolled in a private AFP.
Termination without cause is not a simple notice-and-pay exit. Dismissal requires documented grounds, and for conduct issues, the employer must generally allow a response period before finalizing the decision. Where dismissal is arbitrary, compensation is calculated per year of service and capped, rather than paid as a flat severance figure. Getting the process wrong exposes the employer to reinstatement claims, which is one of the main reasons companies use an EOR rather than managing this directly.
Employment contracts and worker types
Peru's labor code favors indefinite employment as the default. Fixed-term contracts are legal, but they require a real statutory justification, a written agreement, and a defined duration tied to the actual reason for the term. Simply preferring a fixed-term arrangement, or using one repeatedly to avoid indefinite status, does not hold up: continuing work past expiry, or using a sham justification, converts the relationship to indefinite employment.
The same principle applies to worker classification. Peruvian law presumes that personal, paid work performed under another party's direction is employment, regardless of what the contract calls it. Labeling someone an independent contractor does not remove that presumption if the actual working relationship looks like employment (fixed schedule, direct supervision, integration into the team). Employ Latam evaluates the working relationship before recommending a contract type, so classification risk stays out of your hands.
Written terms are required for fixed-term and part-time contracts. Indefinite contracts can technically be verbal, but a written contract is standard practice and gives both sides a clear record of duties, pay, hours, benefits, and probation.
Contract types compared
| Contract type | Typical use | Max duration | Probation allowed |
|---|---|---|---|
| Indefinite | Core, ongoing roles | No fixed limit | Yes, 3 months ordinary; extendable in writing up to 6 months for qualified/trusted roles, up to 1 year for management |
| Fixed-term (start of new activity) | New business line or venture | Up to 3 years | Yes, same rules as indefinite |
| Fixed-term (successive, ordinary categories) | Project or objective-based work | Generally up to 5 years combined | Yes, same rules as indefinite |
| Part-time | Roles under the four-hour daily average | Follows the underlying contract type | Yes, same rules apply |
| Labor intermediation (temporary placement) | Occasional work or replacing an absent worker | Tied to the specific need; capped at 20% of client's workforce | Governed by the intermediation provider, not the client |
Part-time work has its own eligibility rules. Benefits requiring at least four hours of average daily work (calculated by dividing weekly hours across five or six working days) may not apply below that threshold, though general-regime gratifications can still be owed. CTS and the ordinary 30-day annual leave have separate qualifying rules; Peru's labor authority (Sunafil) recognizes a reduced six-day annual leave entitlement for workers below the four-hour threshold.
Labor intermediation (bringing in workers through a third-party provider for temporary, complementary, or specialized work) is tightly regulated under Law 27626. It does not give a client company a general right to direct permanent core staff through another employer, and the provider must hold current RENEEIL registration. This is a narrow tool, not a substitute for standard employment.
Foreign worker contracts carry additional structure: they're normally capped at a renewable three-year term, must include a national-staff training clause, and require separate immigration approval before the employee starts work. Contract approval and immigration permission are two distinct steps.
Hiring a contractor in Peru
Many teams start with a contractor in Peru before they hire an employee. We draft the contractor agreement, collect the contractor's local tax ID, pay them in local currency or USD, and withhold tax where Peru requires it. You approve invoices and pay one USD invoice.
Contractor or employee
Before you start, we review the role and tell you whether it looks more like a contractor or an employee. How Peru law draws the line is covered above.
When to convert
A contractor who works only for you, keeps set hours and uses your tools is effectively an employee under most Latin American labor law. We can move them onto an employment contract with us: same person, same pay.
Contractor payments from $29 per contractor per month.
Payroll, taxes, and the 13th-month salary
Peru runs payroll on a monthly cycle, though weekly and fortnightly pay is also legally recognized. Employers must register workers in the electronic payroll system, calculate deductions, and declare and pay contributions through PLAME, the standard SUNAT payroll-reporting mechanism. Employees receive a payslip no later than the third working day after payment. Under an Employ Latam contract, we run this cycle for you: statutory contributions handled, payroll runs in local currency, and you get a clean monthly cost breakdown.
Peru's compensation structure goes beyond the base monthly salary. Employees are legally entitled to two full gratification payments each year, one in July and one in December, each equal to one month's computable remuneration for a full qualifying semester (accrued at one-sixth per complete month for shorter periods). Alongside each gratification, employers add an extraordinary bonus, normally 9% of the gratification (or 6.75% where the employee is covered by an EPS). These gratifications and the extraordinary bonus are exempt from pension and health contributions under Law 30334, though income tax can still apply.
On top of that, employers fund CTS (Compensación por Tiempo de Servicios), a severance-savings benefit deposited in two installments each year, in the first 15 days of May and November. For a full qualifying year, CTS commonly totals about seven-sixths of one monthly salary. A temporary law (32322) currently lets workers withdraw up to 100% of accumulated CTS through end of 2026, but this doesn't change the employer's obligation to keep depositing it.
Employer and employee contributions
| Contribution | Employer rate | Employee rate |
|---|---|---|
| Health insurance (EsSalud) | 9% | None |
| Pension (ONP, public system) | None | 13% |
| Pension (AFP, private system) | None | 10% + insurance/commission |
| Life insurance (Seguro Vida Ley) | 0.53% | None |
| Occupational accident insurance (SCTR, where applicable) | 1% | None |
| Income tax withholding | None | Progressive, up to 30% |
Employees are enrolled in either the public pension system (ONP, 13% employee-funded) or a private AFP (10% plus insurance and commission), never both. Resident employees pay progressive income tax: 8% on the first 5 UIT of annual taxable income, rising to 30% above 45 UIT, after a standard 7 UIT deduction. Non-domiciled employees are generally taxed at a flat 30% withholding on gross salary. The 2026 UIT is PEN 5,500.
Peru's corporate tax rate is 29.5% on business profit, a separate matter from payroll costs and not a charge on individual salaries. VAT (IGV plus municipal tax) is 18%, relevant to vendor invoices, not payroll.
Other salary-linked items to budget: a statutory family allowance (10% of minimum wage, about PEN 113/month) for employees with qualifying children, and profit sharing for qualifying employers with more than 20 workers, generally 5% to 10% of annual profit depending on sector.
Mandatory benefits, vacation, and parental leave
Peru's employment framework layers several mandatory benefits on top of base salary. When budgeting a hire, plan for more than just the monthly wage: gratifications, CTS, and social contributions add materially to total cost.
Statutory gratifications. Employees in the ordinary regime receive two extra monthly payments per year, one in July and one in December, each equal to a full month's computable remuneration for a complete qualifying semester. Shorter periods accrue proportionally. Employers also add an extraordinary bonus, normally 9% of the gratification (6.75% if the employee is covered by an EPS). These gratifications are exempt from pension and health contributions under Law 30334.
CTS (severance savings). Eligible employees working an average of at least four hours daily receive CTS, a savings benefit funded entirely by the employer. Deposits go into the employee's account in the first 15 days of May and November. For a full qualifying year, this typically totals about seven-sixths of one monthly salary.
Family allowance. Employees with one or more qualifying children under 18 (or children in qualifying higher education, up to six further years) receive a family allowance equal to 10% of the minimum wage, currently PEN 113 per month. This is one flat allowance, not a per-child payment.
Life insurance and SCTR. Employers must arrange Seguro Vida Ley from the start of employment, covering natural death, accidental death, and total permanent disability. Employees in high-risk activities also require SCTR, which includes health and pension coverage; this does not apply as a blanket rate to every office role.
Leave entitlements
| Leave type | Entitlement | Paid by |
|---|---|---|
| Annual leave | 30 calendar days after a full qualifying year of service (260 days worked for a six-day week, 210 for a five-day week) | Employer |
| Sick leave | Employer covers the first 20 certified incapacity days per calendar year; EsSalud subsidy can apply from day 21, for up to 11 months and 10 days | Employer (first 20 days), EsSalud subsidy thereafter |
| Maternity leave | 98 days total, generally 49 before and 49 after birth; add 30 days for multiple births or a child with a disability | EsSalud subsidy (subject to contribution and employment conditions); employer advances and claims reimbursement |
| Paternity leave | 10 consecutive calendar days ordinarily; extends to 20 days for premature or multiple births, and 30 days for specified serious conditions | Employer |
| Public holidays | 13 to 16 days per year (national statute lists 16 dates; 13 counted in current guidance) | Employer |
Additional leave types include five paid calendar days for bereavement (spouse, parent, child, or sibling), up to seven paid days for serious illness of a close relative, and 30 paid calendar days for qualifying adoption of a child aged 12 or under, with 15 days' advance notice required.
Leave dates are agreed between employer and worker; a written split can preserve part of the annual leave in blocks, and up to 15 days can be exchanged for pay by written agreement. Annual-leave pay is due before the break starts, and unused, qualifying leave must be settled on termination.
Severance, termination, and notice periods
Peru does not allow at-will termination. Dismissal requires a documented cause and, for most cases, a procedural defence step before the employer can end the relationship. There is no general 30-day notice buyout: notice periods in Peru are procedural, not a substitute for having grounds.
Termination for conduct. The employer must issue written allegations and give the employee at least six calendar days to respond, except in narrow cases of flagrant misconduct. Only after that process can a reasoned written dismissal, stating cause and effective date, be issued.
Termination for poor performance or capacity. Capacity-related dismissal ordinarily requires a 30 calendar day period for the employee to demonstrate capacity or correct the deficiency before dismissal can proceed.
Termination without cause. Arbitrary dismissal of an employee past probation triggers statutory compensation: 1.5 monthly ordinary remunerations per complete year of service, with proportional amounts for partial years, capped at 12 monthly remunerations. Fixed-term contracts ended early use a different formula: 1.5 monthly remunerations for each remaining month on the contract, also capped at 12.
Resignation. An employee normally gives 30 days' written notice. The employer can waive this on its own initiative, or grant a waiver requested by the employee; a requested waiver is treated as accepted if not rejected in writing within three days.
Settlement timing. Sunafil guidance calls for qualifying final benefits to be paid within 48 hours of termination: outstanding salary, pro-rated CTS, pro-rated gratification, unused leave, and any lawful dismissal compensation. The employer must also provide a work certificate and the cessation document the employee needs to access CTS funds.
Protected dismissals. Pregnancy, breastfeeding, union activity, protected complaints, and discriminatory grounds can make a dismissal invalid, including during probation. Check protected status before acting on any termination decision.
| Tenure | Notice period | Severance owed (without cause) |
|---|---|---|
| Less than 1 year | No statutory notice period; grounds and procedure still required | Proportional: 1.5 monthly remunerations x fraction of year worked |
| 1-3 years | No statutory notice period; grounds and procedure still required | 1.5 monthly remunerations per complete year |
| 3-5 years | No statutory notice period; grounds and procedure still required | 1.5 monthly remunerations per complete year |
| 5+ years | No statutory notice period; grounds and procedure still required | 1.5 monthly remunerations per complete year, capped at 12 monthly remunerations total |
Employ Latam prepares the locally compliant contract, tracks probation and notice requirements, and handles the settlement calculation and payout when a role ends in Peru. You manage the performance conversation and the decision; we manage the paperwork and the payroll side of the exit.
Recent regulatory changes
Peru's labor framework has been stable over the past two years. Legislative Decree 728, the Productivity and Labor Competitiveness Law, remains the backbone of employment regulation. No sweeping reforms have passed, but several targeted updates affect payroll costs, remote work obligations, and minimum wage floors. Employers hiring now should account for these specifics rather than relying on older guides.
Key changes: May 2024 to May 2026
| Date | Change | Impact on employers |
|---|---|---|
| January 2025 | Minimum wage raised to PEN 1,130/month | Sets the floor for all payroll calculations, including CTS and gratification deposits |
| August 2024 | Ministry of Labor tightened registration deadlines for fixed-term contracts | Contracts must be registered within 15 days of signing; late registration risks nullification of the fixed-term status |
| October 2024 | Remote work regulations clarified under Law 31572 | Employers must document equipment provision, connectivity costs, and right-to-disconnect terms in writing for any remote arrangement |
| March 2025 | EsSalud contribution rate confirmed at 9% of gross salary | No change to rate, but enforcement audits increased; late deposits now attract faster penalty notices |
| September 2025 | Micro and small enterprise (MYPE) regime thresholds reviewed | Annual revenue caps adjusted; companies near the boundary should verify whether reduced-benefit rules still apply to their headcount |
| January 2026 | Gig economy classification guidance issued by SUNAFIL | Platform workers performing exclusive, subordinate work may now be reclassified as employees; affects companies using contractor arrangements for ongoing roles |
A few practical points worth noting:
- The PEN 1,130 minimum wage feeds directly into gratification calculations (paid in July and December) and CTS deposits (made each May and November). A wage floor increase raises all three costs at once.
- The remote work documentation requirement is not optional. Audits by SUNAFIL (the labor inspectorate) have increased, and missing written agreements on equipment and connectivity is a common finding.
- The MYPE regime gives smaller businesses reduced severance and probation terms. If your Peruvian entity or EOR arrangement sits near the revenue threshold, confirm your classification before each payroll year.
- The gig reclassification guidance is the most significant development for companies using independent contractors for regular, directed work. If the relationship looks like employment, SUNAFIL is now more likely to treat it as one.
No changes to the core severance formula (1.5 months per year worked), pension contribution rates, or the standard 30-day vacation entitlement have been enacted in this period.
Frequently asked questions
- Do I need a local entity to hire employees in Peru?
- No. An employer of record can legally employ your hire in Peru without you setting up a local company. The EOR handles the employment contract, payroll, statutory contributions, and filings, while you manage the day-to-day work. This is typically faster and less costly than incorporating a Peruvian entity, especially for a first hire or a small team.
- Can I hire someone in Peru as an independent contractor instead of an employee?
- Only if the actual working relationship supports it. Peruvian law presumes personal, paid work performed under another party's direction is employment, no matter what the contract says. If the role involves set hours, direct supervision, or integration into your team's regular operations, it should be structured as employment to avoid misclassification risk.
- When are the 13th-month and 14th-month payments due in Peru?
- Peru actually has two statutory gratification payments, not one: one due in the first half of July and one in the first half of December, each normally equal to a full month's salary for employees who worked the complete preceding semester. Shorter service accrues proportionally, at one-sixth per complete month worked. Employers also add a small extraordinary bonus on top of each gratification, and both are exempt from pension and health contribution deductions.
- How many vacation days are employees in Peru entitled to?
- Employees in the ordinary regime receive 30 calendar days of paid annual leave after completing a full year of qualifying service, along with the required work record (260 days for a six-day week, or 210 for a five-day week). Leave dates are agreed with the employee, though the employer decides if no agreement is reached. Part of the leave can be split into blocks by written agreement, and up to 15 days can be exchanged for pay.
- How much severance is owed for terminating an employee without cause in Peru?
- An indefinite employee past probation is owed 1.5 monthly ordinary remunerations for each complete year of service, with proportional amounts for partial years, up to a cap of 12 monthly remunerations. Fixed-term contracts ended early use a similar 1.5-month-per-remaining-month formula, also capped at 12. This is separate from other amounts due at exit, such as unused leave and pro-rated CTS and gratification.
- What is the most important recent labor law change for employers hiring in Peru right now?
- The January 2026 SUNAFIL guidance on gig worker classification is the change with the broadest immediate risk. If you use contractors for ongoing, supervised work, those arrangements may now be treated as employment relationships, triggering back-payment of social contributions, CTS deposits, and gratifications. Review any contractor engagements before they become a compliance liability.
We handle the contract, payroll, taxes, and benefits in Peru so you can hire that person this month.
Statutory figures for Peru, each traced to a named source with its reference year. Sourced from OECD, the World Bank, the ILO, ISSA and national statutes.
Latest reference period: 2026
| Annual income | Marginal rate |
|---|---|
| 0 – 34,200 | 0% |
| 34,200 – 137,000 | 8% |
| 137,000 – 239,000 | 14% |
| 239,000 – 342,000 | 17% |
| 342,000 – 684,000 | 20% |
| 684,000+ | 30% |
Figures are statutory reference values maintained internally and refreshed against primary sources. They are a starting point for planning, not legal advice — we confirm the exact numbers for your role before you hire.
What changed in Peru
Checked against official sources on .
No rule changes recorded since we began logging them.
What a hire in Peru costs
Employers in Peru pay statutory contributions of 9% on top of gross salary. At the average monthly wage of PEN 2,008, that adds PEN 181 a month.
| Salary | Gross per month | Employer contributions | Total per month | Total per year |
|---|---|---|---|---|
| Minimum wage | PEN 1,130 | PEN 102 | PEN 1,232 | PEN 14,780 |
| Average monthly wage | PEN 2,008 | PEN 181 | PEN 2,189 | PEN 26,265 |
Employer contribution rate: Manual / editor, as of Jan 2026
Minimum wage: National government, as of Sept 2026
Average monthly wage: ILOSTAT, as of Jan 2025
Amounts in PEN. Totals per year are twelve monthly salaries plus contributions.
What the contributions pay for
- Health and long-term care9%
- Work injury0.63%
Components: ISSA Country Profiles, as of Jan 2024
From a different source from the headline rate, so they do not add up to it exactly. The worked example uses the headline rate.
On top of this: the 13th salary where the law requires one, paid leave, and notice and severance if the employment ends (all in the tables above), plus our employer of record fee, from $349 per employee per month. Every quote we send breaks each of these out for the actual role.
Found someone in Peru? Let's employ them.
We'll send a fully-loaded cost breakdown for the role within a few hours, then draft a locally compliant employment contract. Most Peru hires can start within 1 to 3 business days once docs are in.
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