Overview
Payroll Cycle
Employer Contributions
Employee Contributions
Minimum Wage
Hiring
Hiring Employees
Hiring Contractors
Hiring Expats
Background Checks
Employment Contracts
Onboarding
Employee Benefits
Social Security
Healthcare and Insurance
Leave Policy
Public Holidays
Work Permit and Work Visa
Probation Period
Notice Period
Termination and Severance
Personal Income Tax
Explore the benefits of an Employer of Record (EOR) in Peru, where you can gain valuable information and assistance in hiring and managing employees in the country. Discover essential details on employment contracts, payroll cycles, employer and employee contributions, minimum wage requirements, hiring procedures for employees, contractors, and expats, background checks, onboarding processes, employee benefits, social security regulations, healthcare and insurance coverage, leave policies, public holidays, work permits, probation and notice periods, termination and severance procedures, as well as personal income tax obligations. With our comprehensive resources and expertise, we provide the necessary support to ensure compliance with local employment laws and regulations, making your employment experience in Peru smooth and successful. Whether you are entering the Peruvian market or expanding your workforce, our EOR services are designed to meet your specific needs.
| Overview | |
| Continent | Americas |
| Country | Peru |
| Capital | Lima |
| Time zone | UTC−05:00 (PET) |
| Total Time zones | 1 |
| Working hours per week | 48 |
| Working week | Monday–Saturday |
| Typical hours worked | 8 |
| Personal Tax filing deadline | Between the last week of March and the first week of April, according to the last number of each taxpayer ID. |
| Financial Year | 1st January to 31st December |
| Date format | dd/mm/yyyy |
| Currency | Peruvian Sol (PEN) |
| VAT | the standard rate is 18% |
| Employers | % of Gross Salary |
| Health Insurance | 9% |
| Total Employment Cost | 9% |
| Employees | % of Gross Salary |
| Pension Fund | 13% |
| Total Employee Cost | 13% |
| Minimum Wage | |
| Minimum Wage | The minimum wage in Peru is 930 PEN per month. |
| Payroll | |
| Payroll Cycle | Monthly |
| 13th Salary | The 13th and 14th salaries are paid in July and December. |
| Income Tax | |
| Income Range - 1 Tax Unit (UIT) = 4,400 PEN | Tax Rate |
| Up to 5 UIT | 8 |
| 5 UIT to 20 UIT - 14% | 14% |
| 20 UIT to 35 UIT - 17% | 17% |
| 35 UIT to 45 UIT - 20% | 20% |
| More than 45 UIT - 30% | 30% |
Employment Contracts in Peru
Employment contracts in Peru can be categorized into two main types: indefinite and fixed-term. While indefinite contracts are not legally required to be in writing, it is advisable to have a written agreement in place. By default, employment relationships are considered permanent unless proven otherwise. On the other hand, fixed-term contracts are used in specific cases such as new activities or services, temporary or force majeure situations, seasonal services, or other legally permitted circumstances. Fixed-term contracts must be in writing and can be extended for a maximum of 5 years in certain cases.
Part-time employment contracts are also possible, either indefinite or fixed-term, for employees working less than 24 hours per week. Such contracts need to be registered with the Labor Ministry to ensure compliance.
Probationary periods in Peru typically have a maximum duration of 3 months, but they can be extended up to 6 months for "trusted personnel" or when additional training is required. In the case of "managerial personnel," the probationary period can be extended up to 1 year. After the probationary period, employees are protected against arbitrary dismissal, and termination can only occur with justified cause and following the proper procedures outlined in local law.
Employers in Peru must have certain policies in place, regardless of the number of employees. These policies include measures to prevent and address sexual harassment, ensure health and safety at work, and establish a fair structure for job roles and salaries to prevent gender-based salary discrimination. For companies with 20 or more employees, additional policies on health and safety regulations must be implemented. Companies with over 20 female employees of childbearing age must also have rules regarding breastfeeding facilities in the workplace. For larger companies with more than 100 employees, internal labor regulations must be approved by the Labor Administrative Authority.
It's important to note that part-time contracts and employment contracts with foreign citizens require registration or approval by the Labor Ministry to ensure compliance with legal requirements.
In Peru, employers have several options for hiring and employment arrangements, including different types of employment contracts and alternative arrangements such as independent contractors and staffing/outsourcing services. Here are the key hiring options available:
Employment/Hiring Options in Peru:
Independent Contractor:
- Independent contractors provide services independently and autonomously, without direction or control from the hiring company.
- They have the freedom to work for multiple clients and are compensated with fees or compensation for their services.
- Independent contractors are not entitled to employment benefits and are subject to civil law rather than employment law.
Staffing and Outsourcing Services:
Companies can engage workers through third-party staffing agencies, primarily for non-core business activities like janitorial and security services.
Outsourcing arrangements are permissible except when it involves the client's core business and permanent displacement of workers. Outsourced workers are employed by third-party companies that manage, instruct, and control them. The workers are subject to the policies and orders of the third-party company.
It's important to note that misclassifying workers as independent contractors or using improper staffing and outsourcing arrangements can lead to legal risks and potential penalties. Non-compliance may result in the invalidation of the arrangement and the incorporation of outsourced personnel onto the client's payroll, along with administrative penalties.
Employers should ensure compliance with relevant laws and regulations, including registration requirements with the Labor Ministry for staffing agencies.