Peru Employer of record (EOR)
Europortage offers a comprehensive Peru Employer of Record (EOR) solution that simplifies hiring in Peru. Our EOR service allows you to hire employees in Peru without setting up a local entity. Instead, Europortage acts as the legal employer, managing all aspects of employment while ensuring full compliance with Peruvian labor laws.
With deep local expertise, our Employer of Record in Peru ensures compliance with payroll regulations, employment contracts, tax obligations, and statutory benefits. Partnering with Europortage lets you hire confidently while focusing on business growth.
Our Peru Employer of Record (EOR) Responsibilities:
✔️ Drafting locally compliant contracts
✔️Processing payroll accurately and on time
✔️ Providing an excellent employee experience
✔️Seamlessly handling global mobility
✔️ Paying your talent in local currency
Employment Agreements in Peru
In Peru, written employment contracts are mandatory for formal employees. These contracts must include:
- Job title and description
- Salary and benefits
- Working hours and overtime terms
- Termination clauses
- Probation period details (if applicable)
Peruvian labor law strongly favors employees, ensuring job stability and strict termination regulations. Employers must provide clear justifications for dismissals, making a well-drafted employment contract essential to mitigate risks and ensure compliance.
Most employment contracts in Peru are indefinite-term, as fixed-term contracts are allowed only under specific conditions. These include seasonal work, special projects, or temporary replacements. Additionally, employers must register contracts for foreign employees with the Peruvian Ministry of Labor to ensure compliance with local regulations.
Medical Examinations in Peru
Pre-employment medical exams are required in Peru, especially for positions involving occupational risks. Employers must conduct pre-employment, periodic, and exit medical examinations to ensure workplace safety. However, candidates have the right to refuse medical exams, and refusal cannot be used as a basis for employment denial or discrimination.
Probation Periods in Peru
In Peru, the standard probation period is three months. Some positions allow extensions up to six months for skilled employees or one year for managerial roles. This initial phase allows employers to assess an employee’s suitability for the role.
Taxes in Peru
In Peru, both employers and employees must contribute to social security and pension funds to ensure financial security and healthcare access for workers. Employers are responsible for deducting, calculating, and submitting these payments to the relevant government agencies. Failure to comply can result in penalties, interest charges, and legal repercussions. Understanding these tax obligations is essential for companies hiring in Peru.
Employer Obligations in Peru
Employers must contribute to several mandatory funds, which provide employees with pension savings, healthcare benefits, vocational training, and workplace safety protections.
Pension Fund (AFP or ONP)
Employers in Peru must register their employees under one of two pension systems: the Private Pension System (AFP) or the National Pension System (ONP). The AFP (Administradoras de Fondos de Pensiones) is a privately managed, individual capitalization system where employees contribute a percentage of their salary to a personal pension fund. The ONP (Oficina de Normalización Previsional) is a state-run, pay-as-you-go system where contributions fund the pensions of current retirees.
Health Insurance (EsSalud)
Employers in Peru must contribute 9% of an employee’s salary to EsSalud (Seguro Social de Salud), the national health insurance system. This contribution ensures employees and their dependents receive medical coverage, including preventive care, hospital services, maternity benefits, and specialized treatments.
EsSalud operates as a public healthcare provider and covers a wide range of medical expenses for workers. Employers must register employees with EsSalud from the first day of employment to guarantee coverage.
Senati & SENCICO
Employers in certain industries must contribute to vocational training funds like Senati (Servicio Nacional de Adiestramiento en Trabajo Industrial) and SENCICO (Servicio Nacional de Capacitación para la Industria de la Construcción). These funds help develop the workforce by financing technical education and professional training programs for employees.
Senati: Applicable to industrial and manufacturing sectors, this fund trains workers in technical fields to improve productivity and efficiency.
SENCICO: Mandatory for employers in the construction sector, this fund supports training programs for architects, engineers, and construction workers.
Workers’ Compensation (SCTR)
The SCTR (Seguro Complementario de Trabajo de Riesgo) is a mandatory insurance program designed for employees working in high-risk occupations. This coverage protects workers from occupational hazards, work-related illnesses, and accidents. It includes medical care, disability compensation, and survivor benefits in case of severe injury or death.
Employers in construction, mining, manufacturing, and other high-risk industries must provide SCTR insurance.
Employee Contributions in Peru
In Peru, employees are required to make specific contributions from their salaries to support social security and pension systems.
Pension Fund Contributions
Employees in Peru must contribute to a pension fund, choosing between the National Pension System (ONP) or the Private Pension System (AFP).
National Pension System (ONP): Employees who opt for the ONP contribute 13% of their gross monthly salary to this state-managed fund. The ONP operates on a pay-as-you-go basis, where current contributions fund the pensions of existing retirees. Upon reaching retirement age and meeting the required contribution period, employees receive a defined benefit pension.
Private Pension System (AFP): Employees choosing the AFP contribute approximately 12.5% of their gross monthly salary. This contribution is divided into:
- 10% allocated to the individual’s personal pension account.
- The remaining 2.5% covers insurance premiums and administrative fees charged by the AFP.
The AFP system is based on individual capitalization, meaning each employee’s contributions are invested, and the returns accumulate in their personal account. At retirement, the accumulated funds determine the pension benefits.
Income Tax Contributions
Peru employs a progressive income tax system, where tax rates increase with higher income levels. The tax unit, known as Unidad Impositiva Tributaria (UIT), serves as a reference for tax calculations. As of 2024, 1 UIT equals 4,600 PEN.
The income tax brackets are as follows:
- Up to 5 UIT (23,000 PEN): Taxed at 8%.
- From 5 UIT to 20 UIT (23,001 to 92,000 PEN): Taxed at 14%.
- From 20 UIT to 35 UIT (92,001 to 161,000 PEN): Taxed at 17%.
- From 35 UIT to 45 UIT (161,001 to 207,000 PEN): Taxed at 20%.
- Above 45 UIT (207,001 PEN and above): Taxed at 30%.
Benefits in Peru
Mandatory benefits in Peru
In Peru, employers are mandated to provide specific benefits to employees, ensuring their welfare and compliance with labor laws. Below is an overview of these mandatory benefits:
13th and 14th Month Salaries
Peruvian law requires employers to pay two additional bonuses annually, commonly referred to as the 13th and 14th-month salaries. The first bonus is disbursed in July, coinciding with Peru’s Independence Day celebrations, and the second in December, aligning with Christmas festivities. Each bonus is equivalent to one month’s salary. These bonuses are designed to provide employees with extra financial support during significant times of the year.
Profit Sharing
In companies with more than 20 employees, there is a mandatory profit-sharing scheme. Eligible employees receive a percentage of the company’s pre-tax profits, which varies between 5% to 10%, depending on the industry sector. This initiative aims to foster a sense of ownership and motivate employees by directly linking their efforts to the company’s financial success.
Common Additional Benefits In Peru
Many employers in Peru provide optional benefits to attract and retain top talent while enhancing employee satisfaction and productivity. Common perks include:
- Private health insurance – Faster access to medical specialists and advanced treatments.
- Life insurance – Financial security for employees’ families.
- Meal and transportation allowances – Reduced daily commuting and food expenses.
- Performance-based bonuses – Incentives for achieving company or individual goals.
- Flexible work arrangements – Remote work or hybrid schedules for better work-life balance.
- Private pension plans – Additional retirement savings beyond mandatory contributions.
While not legally required, these benefits help companies remain competitive, improve employee well-being, and increase retention.
How an EOR Helps You Administer Benefits in Peru
Managing employee benefits in Peru can be complex due to strict labor laws and mandatory contributions. An Employer of Record (EOR) simplifies this process by handling compliance, payroll deductions, and benefits administration on your behalf. From mandatory benefits like EsSalud and CTS to optional perks like private health insurance and bonuses, an EOR ensures employees receive accurate and timely benefits while reducing administrative burdens. This allows businesses to focus on growth while staying fully compliant with Peruvian labor regulations.
Payroll in Peru
Minimum wage
The minimum wage in Peru is PEN 1,130 per month as of 2025. The government reviews and adjusts it periodically based on economic conditions and inflation. Some industries or roles may have higher wage requirements due to collective bargaining agreements (CBAs). Employers must comply with minimum wage regulations to avoid penalties and legal risks.
Payroll cycle and frequency
Most companies in Peru pay salaries once a month, typically at the end of the month. However, some businesses prefer bi-weekly payments to align with employee preferences and industry standards. The payroll cycle must be clearly defined in employment contracts to avoid disputes. Late salary payments can lead to fines and employee dissatisfaction.
Bonus Payments
Peruvian labor law mandates two extra salary payments per year. The first (Gratificación de Fiestas Patrias) is paid in July for Independence Day celebrations. The second (Gratificación de Navidad) is paid in December for the holiday season. Both bonuses equal one full month’s salary and come tax-free from social security deductions. Employers who pay on time boost employee satisfaction and retention.
Payday
Salaries are usually paid on the last working day of the month. If employees receive bi-weekly payments, they get paid on the 15th and 30th. Businesses must ensure timely salary disbursement to maintain compliance and a positive workplace environment. Failure to pay on time can result in government fines and employee dissatisfaction.
Payment requirements
Employers must pay salaries through a Peruvian bank account. Cash payments are discouraged and legally restricted in most cases.
How an EOR helps you run payroll in Peru
A Peru Employer of Record (EOR) ensures payroll compliance by managing every aspect of salary payments, tax withholdings, and reporting. Payroll errors can lead to legal complications and financial penalties, making expert management essential. An EOR ensures that all calculations follow local labor laws, reducing administrative burdens. Businesses benefit from a streamlined payroll process that guarantees timely, accurate payments. By outsourcing payroll to an EOR, companies can focus on growth while maintaining full compliance with Peru’s payroll regulations.
Working time and overtime in Peru
Working hours
The standard workweek in Peru is 48 hours, with employees working 8 hours per day, 6 days a week. However, many companies adopt a 5-day workweek (Monday to Friday) with extended daily hours. Collective bargaining agreements (CBAs) or individual contracts may adjust working hours based on industry needs. Employees must receive at least one full rest day per week, typically on Sunday.
Overtime
Overtime is any work beyond the legal 48-hour workweek. Peruvian labor laws require employers to pay extra compensation for overtime hours. The first two overtime hours must be paid at 125% of the regular hourly rate. Any additional overtime beyond that must be paid at 135% or more. Employees cannot be forced to work overtime, and agreements must be voluntary and documented.
Night Shifts and Compensation
Employees working between 10:00 PM and 6:00 AM qualify for night shift compensation. Night workers earn at least 35% more than those working regular hours. This premium applies even if the total working hours do not exceed the 48-hour weekly limit. Employers must ensure fair compensation for night workers and comply with occupational health and safety regulations.
Time tracking obligations in Peru
Companies with more than 20 employees must implement a time tracking system. Employers must record work hours, breaks, and overtime accurately. Digital or biometric attendance systems are preferred for compliance and efficiency. Remote and external employees may be exempt from strict time tracking, but employers must still monitor working hours to prevent labor disputes.
Leave in Peru
Annual leave in Peru
Employees in Peru receive 30 calendar days of paid annual leave after completing one year of continuous service. They can take their vacation all at once or split it into up to three periods, with one lasting at least 14 consecutive days. Employers must schedule leave in agreement with the employee and ensure proper payroll adjustments. If an employee does not take their leave, they must receive financial compensation for unused days.
Regional and national holidays in Peru
Peru has 12 national holidays where employees are entitled to a paid day off. Some holidays are specific to regions or sectors, depending on industry agreements. Employees required to work on public holidays must receive double pay or an extra compensatory day off. Key national holidays include
- New Year’s Day (January 1),
- Independence Day (July 28-29)
- Christmas Day (December 25).
Employers must track local holidays to ensure compliance.
Sickness and disability leave
Employees are entitled to paid sick leave if they provide a medical certificate. The employer pays for the first 20 days of sick leave. If the illness extends beyond this period, EsSalud (public health insurance) covers compensation for up to 11 months and 10 days. Employees with long-term illnesses or disabilities may qualify for extended paid medical leave. Employers must handle sick leave payments accurately to avoid legal issues.
Paternity and maternity leave
- Maternity Leave: Female employees receive 98 days of paid maternity leave—49 days before birth and 49 days after birth. If complications arise or multiple births occur, an additional 30 days may be granted. During this period, EsSalud covers salary payments.
- Paternity Leave: Fathers receive 10 consecutive days of paid paternity leave, starting from the child’s birth. Certain cases, like premature births or multiple births, may qualify for longer paternity leave.
- Breastfeeding Breaks: Working mothers with infants under one year old are entitled to one hour of paid breastfeeding leave per day.
End of employment in Peru
GEnding an employment relationship in Peru requires careful adherence to labor laws. Employers must comply with regulations concerning notice periods, terminations, and severance pay to avoid disputes and legal penalties. The Peruvian labor market heavily favors employees, making it essential for businesses to handle terminations correctly.
Notice Period in Peru
Peruvian labor law requires a 30-day notice period for terminations without cause. However, contracts or collective bargaining agreements (CBAs) may extend this period. Employers can choose to pay employees in lieu of notice instead of requiring them to work during this period.
For dismissals with just cause, no notice is required. However, employers must provide clear evidence of misconduct, poor performance, or legal violations. Wrongful termination can lead to costly legal claims, making proper documentation essential.
Employees who resign must also provide a 30-day notice unless otherwise stated in their contract.
Severance
Severance pay depends on the type of termination:
✔️ Termination Without Cause: Employees are entitled to one and a half months of salary per year of service, capped at 12 months of pay. Employers must also release funds from the Compensation for Time of Services (CTS) account, which employees receive upon termination.
✔️ Termination With Just Cause: No severance is required if the employer provides valid legal justification for dismissal. However, failure to prove just cause can result in legal claims for compensation.
✔️ Mutual Agreement Termination: Employers and employees can negotiate severance terms, ensuring a fair and legally sound agreement.
Employers must process severance payments within 48 hours of termination to avoid penalties.
How to hire in Peru
Independent contractor
This solution might seem a good fit to reduce the cost of setting up an entity or hiring a full-time employee. Engaging a contractor can be a winning strategy in some cases and will depend of your business strategy and goals. For instance, it is a great solution when you need a talent for a short-term project.