Understanding Employment Norms in Peru: A Comprehensive Guide
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Hiring in Peru? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Peru.

Employment Norms in Peru

Peru or the Republic of Peru is a coastal country in the South American continent. The country is known for its ancient Andes civilization which has flourished over centuries. Peru, once colonized by Spain, is a flourishing economy in tourism, manufacturing, construction, etc. It holds an 'easy' rank in terms of the ease of business doing index.

General Information:

  • The Peruvian currency is the Peruvian Sol (PEN).
  • Lima is the capital of Peru.
  • Spanish, Aymara, and Quechua are the official languages of Peru. Documentation can be in Spanish or can be translated into other languages if required.
  • As of 2021, the GDP of Peru was reported to be 223.25 billion US dollars.
The labor laws in Peru are overseen and regulated by the ILO laws. It protects employees from any kind of discrimination or harassment and provides employee benefits.
Peru map

Table of Contents

  • Agreements
  • Onboarding Process
  • Visa
  • Minimum Wage
  • Payroll Cycle
  • Annual Bonus
  • Health Benefits
  • Working hours and overtime
  • Leaves
  • Social Security
  • Taxes for employers
  • Taxes for employees
  • Probation
  • Termination
  • Severance Pay
  • Employees or Contractors
  • Final Words


The language of the agreement must be in Spanish. The translation of the agreement into another language can be provided if asked. Peru has two types of employment agreements:
  • Indefinite or Open agreement: If an employment agreement isn't assigned otherwise, it is regarded as a permanent employment contract.
  • Definite or Fixed-term agreement: It must be in written format stating the terms and conditions of the employment. The fixed-term agreement in Peru must not exceed 5 years duration. It is considered an indefinite contract if the employee keeps working for more than 5 years.
Onboarding Process

Onboarding Process

Here is how hiring works in Peru.
  • The HR teams create a job description. They work together with the department that has an opening.
  • The description is then posted on the business's official website and other websites, such as LinkedIn.
  • Some businesses might even advertise employment openings in neighborhood publications. A few days to a week can pass before the advertisement is removed.
  • Applicants submit applications by demonstrating their eligibility. After several rounds of screenings and interviews, they are further narrowed down.
  • The final candidates on the shortlist then bargain terms and conditions with the company. The candidate is employed after reaching an understanding with the employer.


Peru has two types of Visas depending on your plan and desired length of stay:
  • Temporary visas: These visas are typically issued to people entering the country for short-term purposes like tourism or business. These visas are valid for up to 183 days as the annual maximum stay. For students, diplomats, religious visits, etc. the duration is of up to 90 days.
  • Residence visas: These visas can be obtained for 1 year or more. It is issued for things like employment, education, family reunions, etc. It can be extended for 1 more year.

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Minimum Wage

Minimum Wage

The minimum wage in Peru is legally fixed at 1025 PEN per month.
Payroll Cycle

Payroll Cycle

The payroll cycle in Peru is given monthly.
Annual Bonus

Annual Bonus

  • There is a legal provision for giving 13th and 14th salaries in Peru.
  • These payments are given every 6 months in July (National Holiday Bonus) and December (Christmas Bonus) respectively.
Health Benefits

Health Benefits

  • Health benefits in Peru include a pension scheme, health insurance, mandatory life insurance, etc.
  • These health benefits are provided by the employer with the contribution of employees.
Working hours and overtime

Working hours and overtime

  • Work hours: n employee must not work more than 48 hours per week and 8 hours per day. The standard working week in Peru is of 6 days starting from Monday.
  • Break: An employee is entitled to a break of 20-30 minutes between regular work hours.
  • Overtime: The employer has to pay 125% salary for the first two hours. After this time the employer has to pay 135% of the salary for the remaining hours.


Sick Leave

  • An employee is entitled to 20 days of paid sick leaves in Peru paid by the employer.
  • If sickness persists, the employee can get benefits from the social security agency ESSALUD for 1 year.

Maternity leaves

  • A pregnant employee is entitled to 98 days of paid maternity leave in Peru paid by the employer.
  • 49 days of leaves can be taken before childbirth and 49 days after the birth.

Paternity leaves

  • Male employees are entitled to 10 days of paid paternity leave in Peru paid by the employer.
  • It is granted after childbirth.

Annual Leaves

  • 30 days of paid annual leaves are granted to employees of which 15 days of leave must be taken annually.
  • It is paid by the employer.

Other Leaves

  • Hospitalization leaves: Up to 7 days of leave is granted if a first relative is sick or injured.
  • Adoption leaves: An employee gets up to 30 days of leave for the adoption of a child below 12 years.

Public Holidays (for the Calendar year 2023)

  • New Year's Day (1st January)
  • Maundy Thursday (April 6)
  • Good Friday (April 7)
  • Easter Sunday (April 9)
  • Labor Day (May 1)
  • Saint Peter and Saint Paul (June 29)
  • Independence Day (July 28-29)
  • Santa Rosa de Lima (August 30)
  • Battle of Angamos (October 8)
  • All Saints Day (November 1)
  • Immaculate Day (December 8)
  • Battle of Ayacucho (December 9)
  • Christmas Day (December 25)

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Social Security

Social Security

  • Social security in Peru covers a pension scheme, family allowance, Compensation for the Time of Service (CTS), and health insurance.
  • Both the employer's and the employee's contribution towards the social security fund is 13%.
Taxes for employers

Taxes for employers

The employer has to pay the following taxes in Peru:
  • Public Health Insurance - 9%
  • Worker Compensation Insurance - 4%
  • Family Allowance - 10%
  • CTS is an ordinary remuneration deposited in the employee's chosen financial institution.

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Taxes for employees

Taxes for employees

Employees are obliged to pay the following taxes in Peru:
  • Pension Fund - 13%
Income taxes in Peru:
  • Up to 5 UIT - 8%
  • Above 5 UIT to 20 UIT - 14%
  • Above 20 UIT to 35 UIT - 17%
  • Above 35 UIT to 45 UIT - 20%
  • 45 UIT and above - 30%
(1 UIT is equivalent to 4,400 PEN)


  • The probationary period in Peru can be up to 6 months or 1 year for management employees.
  • The duration of probation must be stated clearly in the employment agreement.

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Any of the following situations could lead to the employment relationship termination:
  • resignation
  • when the employee reaches retirement age
  • when the employment contract expires or is not renewed
  • when an employee can be fired for serious misconduct (such as theft, fraud, etc.)
  • The worker must be given 30 days' notice before being dismissed. An appropriate justification for the termination must be stated in the letter of termination.
Severance Pay

Severance Pay

  • An employee is entitled to severance pay in Peru upon invalid termination by the employer.
  • The employee gets 45 days of salary as severance pay for every year of service, up to a maximum of 12 months' base pay.
Employees or Contractors

Employees or Contractors

  • Misclassification of employees or contractors in Peru is a punishable offense.
  • If found guilty, the employer is responsible for paying the overhead surcharges.
  • The company is obligated to cover any related interests and penalties on behalf of a misclassified employee.
  • The company may also have to pay taxes retrospectively on the behalf of the misclassified employee.
Final Words

Final Words

The Republic of Peru is a scenic coastal country with stretched Andes mountains. The country offers ease of business with its flexible employment norms. The multi-faceted country is one of the flourishing economies in the South American continent. Peru can prove to be a decent choice for robust business outreach.

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