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Hire and pay employees in Peru quickly and compliantly

Complying with labor and employment laws in Peru

Peru’s labor system is shaped by constitutional protections and a host of statutory decrees. Known for protective rules that guarantee residents job security and mandatory benefits, the Andean nation’s laws aim to balance employee welfare with business dynamism—evident in areas like Lima’s finance sector or Arequipa’s industrial expansion.

Like anywhere in the world, Peru’s labor and employment laws can be complex, especially for foreign employers expanding their international footprint. If you’re looking to hire in Peru, simplify your compliance work by partnering with Rippling EOR, which can help you get expert HR support on local employment regulations so your business is always up to date on the latest laws in Peru and elsewhere.

Employment contracts in Peru

In Peru, employment contracts are governed by Legislative Decree No. 728 (TUO), known as the Law on Productivity and Labor Competitiveness. There’s no specific legal requirement that says employment contracts must be in writing, but it’s still a best practice since it helps avoid disputes between employers and employees down the line.

The law recognizes two main types of employment contracts:

  • Indefinite term contracts: Under local employment law, all employment contracts are presumed to be indefinite term or permanent unless proven otherwise.
  • Fixed-term contracts: Fixed-term contracts are allowed in certain cases, such as for temporary or seasonal work. Fixed-term contracts must be in writing and are limited by the law—in certain cases, employers may extend them for up to five years.

Part-time work is allowed in Peru and includes any employee who works fewer than 24 hours per week. Part-time contracts can be indefinite or fixed term but must be registered with the Labor Ministry.

While there aren’t specific requirements about what to include in an employment contract, consider adding these details so your new hire has all the information they might need about their new role:

  • Job description and workplace
  • Working hours, including breaks
  • Salary details, including payment methods, timing of salary payments, and details on 13th and 14th month payments
  • Contract term
  • Termination policies
  • Benefits, including severance, pension, and bonuses
  • Probation period, if applicable
  • Other relevant rights and obligations for both the employee and the employer

Labor unions in Peru

Union activity in Peru dates back to the early 20th century, particularly in mining regions like Cerro de Pasco. However, in recent decades, membership has dipped, especially compared to similar economies. While workers’ rights to unionize and strike are constitutionally protected in Peru, the country is home to many small businesses that don’t meet the minimum number of employees to allow them to unionize. Still, certain industries have robust unions—like construction, metalworking, or public sector roles.

Employees’ union-related rights are protected in Article 28 of the Political Constitution of the State. It guarantees three main rights:

  • Freedom of association
  • Collective bargaining as a means of peaceful resolution of labor conflicts
  • Striking, with certain exceptions and limitations

Joining a union is always free and voluntary. Under the law, employment can never be conditional based on an employee’s decision to join or not join a labor union in Peru.

Mitigating permanent establishment risk in Peru

A permanent establishment (PE) is a legal and tax concept that refers to a “fixed place of business,” such as an office, factory, or branch, where a business regularly conducts activities in a foreign country. If a business establishes PE in another country, intentionally or not, it generally means it has to pay corporate income tax on the revenue it earns in that jurisdiction.

Under Peru’s corporate tax laws, a foreign company may trigger PE if they:

  • Have any fixed place of business in Peru where their activities are totally or partially carried out
  • Have a person in Peru acting on behalf of the company who regularly concludes contracts
  • Offer services in Peru for more than 183 days in any 12-month period
  • Have a building site or construction project in Peru for more than 183 days in any 12-month period

Organizations hiring employees in Peru, doing business there, or expanding their operations into the country can take certain steps to ensure their business activities don’t meet any of the above criteria and otherwise mitigate their PE risk. Here are a few precautions to take:

  • Keep employees in supportive roles that don’t finalize contracts
  • Document that strategic decisions and signings occur outside of Peru
  • Engage with specialized tax counsel if you’re uncertain about your risk of inadvertently forming a PE in Peru

Probationary period in Peru

Peruvian law allows for a trial period in indefinite-term contracts—typically up to three months for most employees, extendable up to six months in some cases for managerial or highly skilled positions. During this time, if performance is lacking, the employer can terminate the employment agreement without standard severance pay, provided the reasons for termination are properly documented.

Some key points employers should know about probationary periods:

  • If there is a probationary period, it should be written into the employment contract from the outset.
  • If there’s an extended probation period, the employer must prove the role qualifies for it.
  • If the period lapses without termination, the employee gains full legal protection under Peruvian employment laws.

Local laws in Peru

Peru’s labor and employment laws include regulations around data protection, foreign investment, health and safety, and more. Understanding local regulations fosters a stable work environment, especially if you’re a foreign employer setting up a business in the country for the first time. Here are some key areas of Peruvian law that employers should know:

  • Data privacy in Peru: Peru’s Data Protection Law No. 29733 aligns with global standards, requiring consent before collecting personal data and secure storage to prevent leaks and unauthorized access.
  • Foreign investment regulations: Peru is generally open to investment from foreign businesses and individuals, but certain industries or regions may require additional licensing or partner requirements.
  • Occupational health and safety requirements: Mandated by Law No. 29783, employers have a responsibility to maintain safe workplaces, undergo risk assessments, and maintain compliance with inspection protocols.

Remember, ignoring local laws can hamper your expansion plans or tarnish your employer brand. By staying up-to-date on data privacy, safety standards, foreign investor guidelines, and other local regulations, you forge a positive, legally sound presence in Peru and wherever else your global business takes you.

Worker classification and misclassification in Peru: Contractors vs. employees

In Peru—like in many countries—the difference between an employee and a contractor is not just a formality. How you classify your Peruvian workers affects everything from social security to severance. And the local labor authority is vigilant in protecting workers who may be disguised as contractors when they should be classified as full-time employees.

To avoid misclassifying employees in Peru, know the main characteristics of contractors and employees to determine which type of worker will best fit your business needs. Learn more about them below.

Worker classification in Peru: Key differences between contractors and employees

Independent contractor

An individual or business that provides goods or services to another entity under the terms specified in a contract.

Full-time employee

An individual who is hired by a company to work on an ongoing basis and is entitled to certain benefits and protections. 

Employment agreement

Independent contractors in Peru work under arrangements subject to civil law (not employment law).

Full-time employees in Peru work under employment contracts subject to employment law.

Supervision and control

Independent contractors work autonomously and independently, with no requirement that they comply with working hours.

Full-time employees work under their employer’s direct supervision and control and may be told when, where, and how to complete their job duties.

Exclusivity

Independent contractors work non-exclusively and often have multiple clients at any given time.

Full-time employees typically work for just one employer.

Compensation

Contractors receive payment or a fee for their services rather than a salary or wage.

Full-time employees receive wages or salary payments at regular intervals—typically monthly.

Benefits

Independent contractors are not entitled to the same benefits and protections as employees under Peruvian employment law.

Full-time employees receive benefits and protections, such as annual leave and sick leave, under employment law.

Consequences of misclassification in Peru

Misclassification can happen if a business hires a contractor but they function more like a full-time employee. If authorities (like the National Superintendence of Labor Inspection, or SUNAFIL) find you have a “contractor” who truly operates as an employee, you might face:

  • Fines and administrative sanctions: Fines are calculated based on the severity of the infringement and how many employees were affected. Sanctions range from $390-70,000 USD per infringement, up to a total of $400,000.
  • Back payment of taxes: Employers who misclassify their employees are responsible for any tax withholding they failed to pay, plus interest and, potentially, fines and sanctions. Sanctions can be up to 50% of the income tax not withheld, plus interest.

Accurately classifying workers helps your business steer clear of legal pitfalls. If you’re dictating their work hours, controlling their work process, and offering fixed compensation, there’s a risk that they may actually be an employee under Peruvian law, regardless of how you’ve classified them. Transparency helps foster trust with your workforce, on top of avoiding fines, sanctions, and other potential legal issues.

Take our FREE misclassification analyzer quiz

Misclassification risk can come out of the blue. Ensure you’re classifying workers correctly through a series of questions. 

Learn More

Wages and payroll in Peru

Navigating wages in Peru means understanding the country’s minimum wage (which is updated regularly), monthly or bi-weekly pay frequencies, and unique perks like mandated 13th and 14th month salaries. A well-managed payroll system doesn’t just make sure your Peruvian workforce gets paid accurately and on time—it also fosters loyalty and helps you recruit top talent in Peru’s more competitive hiring landscapes like Lima and Trujillo.

Minimum wage in Peru

As of January 1, 2025, Peru’s minimum living wage (RMV) is PEN 1,130 per month. The National Labor Council sets the minimum wage and regularly reviews it to ensure it aligns with inflation, the cost of living, and other factors.

Employers also should note that Peru’s minimum wage may differ depending on industry, work hours, and other factors:

  • The RMV for night work is the RMV plus 35%, so employees who work night shifts (10 p.m. to 6 a.m.) are entitled to at least PEN 1,525.50 per month.
  • The RMV for the mining sector is the RMV plus 25%, so employees in the mining industry are entitled to at least PEN 1,412.50 per month.

Payroll frequency in Peru

In Peru, employers most frequently pay their staff monthly. However, the law doesn’t explicitly require this, so other payroll frequencies—like bi-weekly or weekly—are allowed. Employment law does require that employers pay their staff on time according to the agreed-upon frequency—generally within five days of the end of each pay period.

13th and 14th month pay in Peru

Employers need to know about one distinctive Peru payroll feature: Employees are entitled to two mandatory bonuses each year under Law No. 27735.

13th month pay (or 14th month pay) is an additional salary payment often given to employees as a vacation or holiday bonus. In some parts of the world, 13th month salary payments are mandatory, and in Peru, the law requires employers to pay out 13th and 14th month pay:

  • Gratificación de Julio, or July bonus, which is timed around the Fiestas Patrias, a national holiday in late July
  • Gratificación de Diciembre, or December bonus, which is timed around Christmas

If an employee has completed a full six months of work in the half year before the bonus is paid out, they should receive one month’s salary. If they’ve worked fewer months, employers should prorate their bonus. It’s important for employers to note that they also pay an additional 9% to ESSALUD (Peru’s public health insurance scheme) or 6.75% to private health insurers in place of typical insurance contributions for that extra month.

For many Peruvians, these bonuses help them pay for Fiestas Patrias celebrations, holiday gifts, or a short vacation. Failing to provide them in full or on time not only risks noncompliance but can breed serious malcontent among your workforce.

Run payroll compliantly in Peru

Implementing an accurate and efficient Peruvian payroll system means not only paying salaries but also addressing compulsory social contributions, pension (SNP or private AFP system), health insurance (ESSALUD), and withholding income tax if employees exceed certain income thresholds. You’ll need to:

  1. Register employees with SUNAT and Social Security.
  2. Calculate employees’ gross wages and make sure they meet or exceed the RMV.
  3. Deduct:
    • Income tax if above the annual tax-free threshold
    • Pension (SNP or private AFP)
    • Health insurance (ESSALUD or private health insurer plan)
  4. Pay employee wages accurately and on time according to the agreed-upon payroll frequency.
  5. Provide mandatory 13th month pay in July and 14th month pay in December.

By working with an EOR, you can get all the help you need to handle deductions, adhere to local wage laws, and make accurate, on-time payments. Rippling EOR makes hiring and paying employees across the globe quicker and easier than ever.

Employer and employee taxes in Peru

When hiring in Peru, employers become responsible for different types of taxes—income tax, social contributions, and more. Understanding these obligations keeps you clear of scrutiny from the Superintendencia Nacional de Aduanas y de Administración Tributaria (SUNAT), protecting your brand in a market that appreciates fairness and timely compliance.

Here are the key things to understand about employer and employee taxes in Peru.

Employer taxes in Peru

Tax

Tax Rate

Health insurance—national health system (ESSALUD) or private health insurance (Entidades Promotoras de Salud or EPS)

9-9.75%

Peru Working Compensation or Compensation for Length of Service (CTS)

9.72%

Mandatory Life Insurance

Variable

Family allowance (only for employees with children)

10% of the minimum wage

Employee taxes in Peru

Tax

Tax Rate

Pension

- 13% for employees affiliated with the National Pension System

- 12.5%  for employees affiliated with the Private Pension System

In addition to payroll taxes, employers are responsible for withholding and remitting personal income tax from their employees’ paychecks on their behalf. Peru has a progressive personal income tax, meaning the higher an employee’s income, the more tax they pay. Tax rates are based on Tax Units (UITs). One UIT is equivalent to PEN 5,150 in income.

Annual Income

Income Tax Rate

Less than five UIT

No income tax

Up to five UIT

8%

Five to 20 UIT

14%

20-35 UIT

17%

35-45 UIT

20%

45+ UIT

30%

Penalties for not paying taxes in Peru

Peru’s SUNAT is vigilant about tax compliance. Failing to pay or file on time can yield stiff consequences, from financial sanctions to reputational damage—especially if you plan further expansions in Peru or need local certifications.

Some common noncompliance risks include:

  • Late filings: Missing monthly employee income tax deadlines can trigger interest and fines. While these are variable and depend on many factors, they’re most often a percentage of the unpaid sum.
  • Underreporting: SUNAT may conduct an audit that discovers unreported wages or benefits. When this happens, the employer owes back taxes plus penalty interest, which can rapidly accumulate.
  • Unpaid ESSALUD: Employers who don’t pay their 9% contributions to Peru’s national health insurance scheme leave their employees unprotected, potentially spurring labor authority involvement and fines from SUNAFIL.

Staying timely, precise, and compliant with Peru’s tax regimen is crucial. By promptly paying your tax obligations, cooperating with authorities, and keeping thorough financial records, you’ll keep a positive standing with local authorities as your business expands. You can also help mitigate tax compliance concerns by letting an EOR handle payroll taxes on your behalf, making sure all your local taxes are paid correctly and on time. This allows you to focus on growing your business in Peru and beyond.

Employee benefits in Peru

When expanding your global team in any competitive hiring landscape, one of the best ways to attract and retain top talent is by offering employee benefits. Peruvian labor regulations require employers to offer certain mandatory benefits and protections, including several that aren’t standard in many other countries. And to stand out, optional perks are also encouraged—they can be the difference between a basic job and an appealing career for locals.

Here’s an overview of statutory and optional benefits in Peru.

Mandatory benefits in Peru

Mandatory benefits (also called statutory benefits) are those that employers are legally required to provide to eligible employees. In Peru, mandatory benefits are covered in the Consolidated Text of Legislative Decree No. 728 and other employment regulations, which state that certain entitlements are non-negotiable:

  • Social Security/health insurance: Employers are obligated to cover employee healthcare in Peru. They can choose whether to contribute to the National Health System through Social Security or private health insurance. Only employers pay into the system; there’s no obligation for employees to contribute.
  • Compensation of years of service (CTS): Compensación por Tiempo de Servicios (or CTS) is similar to unemployment insurance. The law requires employers to set aside a secured sum calculated based on the number of complete months of service to be given to the employee if they lose their job. Employers must deposit CTS contributions twice yearly.
  • 13th and 14th month salary: Also known as gratificaciones or bonuses, Peruvian employees are entitled to two extra salary payments each year: one in July (Fiestas Patrias) and one in December (Christmas). They typically equal one month’s salary each but can be prorated for employees who haven’t worked the full six months prior to the payment.
  • Profit sharing: Companies with at least 20 employees must share their profits with employees who contribute to activities that generate income. Profit-sharing payouts range from 5-10%, depending on the industry.
  • Family allowance: Employers are required to pay family allowance to employees with children under 18 years of age or older children (up to age 24) who are pursuing higher education. As of January 2025, family allowance is 10% of the minimum wage.

Employees in Peru are also guaranteed pensions, but employers aren’t required to contribute to the pension fund—only employees are. However, employers withhold and remit employees’ pension contributions from their paychecks on their behalf.

Optional benefits in Peru

Meeting mandatory benefits is step one; going beyond them can set your brand apart. Many employers—in Peru and elsewhere—offer perks and fringe benefits, especially in competitive industries where they want to attract and retain the best employees they can.

Here are some common optional benefits you might consider when hiring in Peru:

  • Private medical insurance for employees and their families
  • Life insurance for employees and their families
  • Workplace accident insurance
  • Meal vouchers, food allowance, or catered lunches
  • Transportation allowance (especially in large cities)
  • Housing allowance
  • Education allowance

In a culture that values loyalty, offering extra benefits—beyond what’s required by law—can foster stronger retention, build positive word-of-mouth, and position your business as an employer of choice.

Working hours, overtime, and leave in Peru

When you hire a global workforce, it’s essential to understand the different rules and regulations around working hours, overtime, and leave—especially since they can all vary significantly from one jurisdiction to the next. This is particularly true across international borders, and Peru is no exception. The country has its own legislation dedicated to setting working hours, making overtime rules, and granting different types of statutory leave to eligible employees. As an employer in Peru, you’ll need to follow all of these rules to stay in compliance and to treat your workforce fairly.

Standard working hours in Peru

Under Legislative Decree 854 and the TUO del Decreto Legislativo 728, standard working hours in Peru are eight hours per day, with a maximum of six working days or 48 hours allowed per week. However, to align with standard working hours in many other countries around the world, many Peruvian businesses opt for a five-day workweek, typically Monday through Friday, as long as their industry allows.

Overtime laws in Peru

When employees exceed the daily or weekly norm, overtime pay is required. For the first two hours of overtime per day, employers must pay employees at least 25% more than their usual wage. For any subsequent overtime, they must be paid at least 35% more than their usual wage. The exact amount of overtime pay can be negotiated between the employee and their employer, but it cannot be less than the minimum.

Some employees are not eligible for overtime pay, including those under trust and management (for example, directors and CFOs).

Rest period and break laws in Peru

Employees in Peru have rights to breaks and rest days, which help ensure they aren’t overly fatigued or burnt out—which is especially vital in physically demanding roles. 

Employees are entitled to a paid lunch break lasting at least 45 minutes during every eight-hour shift.

Employees are also legally entitled to at least 24 continuous hours off per week, commonly on Saturday or Sunday. Businesses with rotating schedules should take extra care to ensure all their employees get 24 consecutive hours off.

Leave laws in Peru

Beyond daily and weekly rest, employees in Peru are entitled to various leaves, from annual vacation to maternity and paternity leave. It’s crucial for employers to observe these laws; failure to do so can harm your business’s reputation and result in legal trouble.

Here are the types of leave employees are entitled to under Peruvian law:

  • Annual leave: Employees are entitled to 30 days of paid time off each year in the form of annual leave. If they have unused leave at termination, employers must pay it out.
  • Sick leave: Employees are entitled to sick leave, the first 20 days of which are fully paid by the employer. If they require additional sick leave after that, Social Security pays it partially.
  • Maternity leave: Peru’s National Healthcare System covers 98 days of paid maternity leave for female employees who give birth—49 days before the birth and 49 days after. In cases of multiple births or if there are complications, the employee can request an additional 30 days of maternity leave. 
  • Paternity leave: Male employees are entitled to 10 days of paternity leave. In cases of multiple births, paternity leave can be extended to 20 days.
  • Adoption leave: Female employees who adopt a child under 12 years of age are entitled to 30 days of paid adoption leave.
  • Public holidays: Peru observes 12 public holidays, which are paid days off for eligible employees:
    • New Year’s Day
    • Maundy Thursday
    • Good Friday
    • Labor Day
    • Saint Peter and Saint Paul Day
    • Independence Day
    • Santa Rosa de Lima
    • Battle of Angamos
    • All Saints’ Day
    • Feast of the Immaculate Conception
    • Battle of Ayacucho
    • Christmas Day

Work permits in Peru

In the Land of the Incas, foreign workers seeking local employment generally need work authorization beforehand—in other words, the right work permit. Not having the right work visa can result in legal trouble, ranging from fines to deportation. And if you want to employ a foreign worker, you may need to sponsor their visa or participate in the application process in other ways. Here’s what employers need to know.

Who needs a work visa in Peru?

Generally, any non-Peruvian national who intends to work or earn income in Peru needs a work visa or a specific foreign worker permit in order to do so legally. Peru’s immigration laws have been in flux in recent years, but the recently passed Alien Act repealed and replaced prior regulations and outlines conditions for different visa categories, from professional roles to technical specialists.

One of the most important provisions is that, similar to many other countries, a tourist visa can’t be used for lawful work. If a foreign worker is offered a job at a Peruvian business, a dedicated work visa is a must; failure to secure a proper visa with work authorization can trigger fines or deportation by Migraciones.

How long does it take to get a work visa in Peru?

The timeline for processing a work visa can vary, but plan on one to three months in total to apply for and receive a work visa, depending on factors like:

  • How long it takes to gather and prepare the necessary documents. For any type of work visa in Peru, the applicant will need legalized diplomas, police records, or labor contracts in Spanish. Some may also need to be apostilled.
  • Steps required to approve the visa. Depending on which type of visa the applicant is seeking, their employer may need to register the job with local authorities and get relevant endorsements before the foreign national applies for a visa at a Peruvian consulate or local Migraciones office.
  • Potential delays. If there's a backlog—especially around the holiday season or if the applicant’s documents lack correct notarizations—it can slow down processing times.

If you want your foreign employee ready to start work by a certain date, begin the visa application process well in advance, particularly if the role is highly specialized or the candidate is from a country requiring extra scrutiny.

Types of work visas in Peru

Peru offers several visa options tailored to the foreigner’s role and length of stay. Some of the most common pathways include:

  • Business visa: For business travelers. Allows the visa holder to carry out commercial transactions, investment-related activities, and other activities that earn remuneration. This visa is good for up to 183 days per year and is not renewable.
  • Designated worker visa: For foreign workers. Allows the visa holder to work for a Peruvian company or person. The visa is valid for one year and is renewable.
  • Worker visa: For foreign employees and independent contractors. Migraciones still has not defined the exact criteria for applying for this visa.
  • Investor visa: For foreign investors. Allows the visa holder to reside in Peru with a minimum investment of PEN 500,000.

Termination and redundancy in Peru

As you prepare to hire your first employee in Peru, termination procedures are likely far from your mind. But this is the best time to learn how to end employment in the jurisdiction, since running afoul of the rules can have serious consequences. When parting ways with an employee, whether it’s for organizational changes or performance issues, Peru’s labor laws demand compliance with the TUO del Decreto Legislativo 728—prioritizing job security and fair process. Observing these rules is essential in a society that prizes stable employment.

Here’s what employers need to know about termination and redundancy rules in Peru.

Does at-will employment exist in Peru?

At-will employment is a legal principle—most common in the US—that allows either employers or employees to end an employment relationship at any time, for any reason (or even without reason), as long as they don’t break any laws, such as firing an employee for a reason that amounts to discrimination.

At-will employment does not exist in Peru. Employers must cite just cause from a specific list in the law. The list is separated into two categories and includes:

  • Reasons related to capability:
    • The employee has lost physical or mental faculties or become suddenly incompetent in a manner detrimental to their job performance
    • The employee performs poorly compared to the average performance of other personnel
    • The employee unjustifiably refuses to undergo a medical examination related to the performance of duties
    • The employee has been convicted by a court of an intentional crime
    • The employee has a disability that makes them incapable of doing the job
  • Reasons related to major faults or misconduct:
    • Failure to comply with duties
  • Decline in performance
  • Misappropriation or attempted misappropriation of the employer’s goods or services
  • Disclosure of confidential information or provision of false information that may be detrimental to the employer
  • Unfair competition
  • Attendance at work under the influence of alcohol or drugs
  • Committing violence, severe indiscipline, or intentional damage to the employer’s goods
  • Unjustified absences of more than three consecutive days or five non-consecutive days

Sudden, unjust dismissals typically lead to lawsuits in Peru. If the employer is in the wrong, the employee will be reinstated—potentially with other penalties, such as back pay.

Notice periods in Peru

Peru doesn’t prescribe a universal notice period for all dismissals and terminations. Terminating an employee during their probation period doesn’t typically require any notice period. Terminating an employee for reasons related to major faults or misconduct requires six calendar days of notice. Terminating an employee for lack of capabilities requires 30 calendar days of notice. 

Companies often give a courtesy notice of 15-30 days for economic or structural layoffs, allowing staff to seek new roles—though legally, the emphasis is on paying the correct indemnities rather than a mandated number of days.

Severance pay in Peru

Depending on the type of dismissal, employees may receive Compensación por Tiempo de Servicios (CTS) or other severance pay. If the termination is lawful (the employer has just cause for ending the employment relationship), the severance might be lower or nonexistent. If it’s a unilateral dismissal without just cause, employers pay a “forced severance” or “indemnización.”

  • CTS: Accumulates throughout employment. Each deposit occurs in May and November, with about one monthly salary per year of service.
  • Indemnización por Despido Injustificado: Typically 1.5 monthly salaries per year of service if the employer lacks just cause for the termination.

How to terminate employees compliantly in Peru

Terminating an employee in Peru demands a careful approach, ensuring you meet legal standards—missing steps can lead to lawsuits or forced reinstatement.

When terminating employees due to lack of capability, send a prior written notice of dismissal to the employee. State the reason for dismissal and grant 30 calendar days for the employee to reply. At the end of this period, if the employee cannot sufficiently defend their employment, you can proceed with the termination. For terminations due to major faults or misconduct, follow the same steps but with a six calendar-day notice instead of 30.

When managing a global team, keeping track of termination regulations can be a challenge. Employers have to contend with just-cause rules, varying notice and probation periods, and inconsistent severance laws across different jurisdictions. Instead, consider partnering with an EOR solution, which can take care of compliance on your company’s behalf, ensuring you stay on the right side of the law from onboarding to offboarding.

FAQs about hiring in Peru

Yes. You can engage an employer of record (EOR) service that acts as the local “employer” while you manage daily tasks. The EOR handles payroll, social security, and compliance with Peruvian labor laws. This is especially handy if you’re testing the Peruvian market for the first time.

An EOR like Rippling can help you quickly tap into Peru's talent pool, grow your global workforce, and reduce both compliance risks and administrative workload.

What is the difference between an independent contractor and an employee in Peru?

In Peru, independent contractors are engaged via a civil or commercial contract. They generally handle their own taxes and insurance and have greater autonomy over when and how they work. Employees are hired under Legislative Decree No. 728, which states that they must receive benefits like CTS, gratificaciones, and social security coverage. The employer directs their schedule and tasks.

How much does it cost to hire an employee in Peru?

Aside from monthly salary, factor in employment costs like health insurance and CTS deposits.

Employer taxes in Peru:

Tax

Tax Rate

Health insurance—national health system (ESSALUD) or private health insurance (Entidades Promotoras de Salud or EPS)

9-9.75%

Peru Working Compensation or Compensation for Length of Service (CTS)

9.72%

Mandatory Life Insurance

Variable

Family allowance (only for employees with children)

10% of the minimum wage

What are the requirements for work permits in Peru?

Foreigners employed by Peruvian companies need a valid work visa. There are multiple types for different categories of workers and roles. Processing can take several months, so start the application process early if you plan to sponsor a work visa for a foreign employee.

What is always required when an employer terminates an employee in Peru?

Under Peruvian law, employers need just cause to terminate employment and must follow specific procedures, like giving notice and allowing the employee time to respond. Noncompliance can lead to reinstatement or indemnities per the labor law.

How does a US company pay a foreign employee in Peru?

There are generally three ways a US company can pay a foreign employee in Peru:

  1. Form a local entity and open a local bank account to run payroll under Peruvian law (with all withholdings).
  2. Partner with an EOR that specializes in global employment and manages salary, insurance, and taxes on your behalf.
  3. Use a global payroll service that can integrate payroll for multiple countries.

Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.

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