Hire in Peru

Peru PEO &

Employer of Record

Hire & manage teams remotely in Peru without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.

Business Language

Spanish

Salary Currency

Peruvian Sol (PEN)

Payroll tax

9%

Payroll Cycle

Monthly

Time zone

UTC -5

Capital city

Lima

Hire Employees in Peru

NNRoad provides employer of record (EOR)professional employment organization (PEO) services to ensure that your business in Peru complies with local labor laws and regulations. We process monthly payroll and act as the Employer of Record, taking on all local employer liabilities.

Hiring with NNRoad

Pay as you go

No set-up or overhead costs to global expansion.

One P.O.C.

One point of contact for all your EOR employees.

Compliance

Ensured compliant contracts and operations.

Fast Hiring

Start working with your remote employees in a week.

Foreigner Visas

NNRoad assists with overseas foreign hires visa needs.

Platform

Access your payroll reports on our portal.

Employer of Record in Peru

Employer of Record (EOR) services are for companies who do not have a legal entity in Peru, but who want to hire localy. Employment and full liability are outsourced to NNRoad.

01.

Candidate Selection

You interviews & select the candidates you want to hire in Peru.

02.

Employee Onboarding

We sign a local labor contract with your employees based in Peru.

03.

Compliance & Payroll

We manage monthly payroll, mandatory benefits & all HR compliance in Peru.

04.

Payroll Reporting

See all payroll reports on our platform & focus on your business in Peru.

Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.

Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).

On-boarding and off-boarding employees following labor law practice.

Complete payroll solution and benefit administration

Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.

Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.

Payment management (Invoicing customers/clients and vendor payments).

Work VISA application assistance, if needed.

Local individual income tax reporting.

Payroll & PEO in Peru

Professional Employment Organization (PEO) services are for companies who have a legal entity in Peru, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.

01.

Compliance & Payroll

We manage monthly payroll, mandatory benefits & all HR compliance in Peru.

02.

Payroll Reporting

See all payroll reports on our platform & focus on your business in Peru.

Registering the necessary company and personnel information for payroll calculation in the payroll software and system

Monthly Payroll Processing

Year-End Adjustment and Annual Declaration

Taxes & Payroll in Peru

Employee Income Taxes:

Individual income tax rates in Peru are based on progressive tax brackets.

In Peru, the income tax system for employees is based on a combination of both the employee and the employer participating in the tax declaration process. The system primarily involves withholding taxes by the employer on behalf of the employees. Domiciled individuals are subject to income tax on their worldwide income, whereas non-domiciled individuals are taxed only on their Peruvian-source income. The tax rates are progressive, ranging from 8% to 30% based on income brackets defined in tax units (Unidad Impositiva Tributaria – UIT). For 2024, the tax brackets are as follows: 8% for income up to 5 UITs, 14% for income between 5 and 20 UITs, 17% for income between 20 and 35 UITs, 20% for income between 35 and 45 UITs, and 30% for income above 45 UITs (Source)

Tax Brackets

8%: 25,750 PEN
14%: 25,750 to 103,000 PEN
17%: 103,000 to 180,250 PEN
20%: 180,250 to 231,750 PEN
30%: >231,750 PEN

Sample Calculation

Tax on a 200,000 Peruvian Sol annual income:

(25,750 – 0) * 0.08 = 2,060
(103,000 – 25,750) * 0.14 = 10,815
(180,250 – 103,000) * 0.17 = 13,137.50
(200,000 – 180,250) * 0.20 = 3,950

0 + 2,060 + 10,815 + 13,137.50 + 3,950 = 29,962.50 Peruvian Sol in taxes

Employer Costs in Peru

Employer Contribution

Employers in Peru are required to make several contributions on behalf of their employees:

Family Allowance: 10% of the minimum wage for workers with children.
Health Insurance (EsSalud/EPS): 9.72%.
Peru Working Compensation or Compensation for Length of Service (CTS): Ranges from 18.72% to 28.72%, applicable only in the private sector for employees who meet certain criteria.

Employee Contribution

12.5% to 13% depending on the pension system they are affiliated with (National Pension System or Private Pension System)​

Social Security

Employers contribute 9% of the employee’s compensation towards social security, which covers health insurance through the National Health System (EsSalud) or a Private Health System (EPS)​.

Benefits & Insurance in Peru

Pension Fund

As per Peruvian labor laws, employees have the option to participate in either the National Pension Scheme or a Private Pension Plan. Under these provisions, an employee is entitled to contribute 13% of their salary towards their pension fund.

Healthcare Insurance

In Peru, employers are mandated to offer health benefits to their employees. As outlined in Peru’s employment laws, there exists a public health insurance service called ESSALUD, which extends coverage to all employees and their families. Employers are required to allocate 9% of their employees’ salary towards contributing to this public health service.

Working Hours in Peru

Working Hours Per Week

In Peru, full-time employment is defined as 8 hours per day or 48 hours per week​.

Overtime

Overtime compensation in Peru is mandated for any hours worked beyond the standard 48-hour workweek. The initial two hours of overtime are compensated at a rate not less than 25% above the standard pay, and any additional hours are compensated at a rate not less than 35%

Termination Laws in Peru

Terminating an employee from service in Peru requires valid grounds, as stipulated by employment laws. Employers cannot dismiss employees arbitrarily; instead, terminations must adhere to the terms outlined in the employment contract. Sufficient reasons for termination are necessary to mitigate risks for employers, as unjustified dismissals may result in legal repercussions. Therefore, employers must ensure that any termination aligns with legal requirements and contractual agreements to minimize potential liabilities.

Severance

If it is found that an employee was terminated without sufficient cause, the employer has to provide severance pay to the employee. The severance pay is equal to the salary of the employee for 12 months. Hence, an employee must not be terminated without any valid reason.

Notice Period

In Peru, employers are required to provide employees with a statutory notice period of 6 days to respond to any termination action. This notice must be provided in writing and clearly state the cause of dismissal. By adhering to these regulations, employers ensure that employees have adequate time to address the situation and respond accordingly, promoting transparency and fairness in the termination process.

Employment Contract in Peru

Employment Contract

Labor contracts in Peru must outline terms including job description, salary, working hours, and other employment conditions. Specific details on probation periods, if applicable, should also be included.

Probation Period

In Peru, the probationary period specified in an employment contract typically ranges from three months to one year. However, in many organizations, the standard probationary period lasts for the initial three months of employment. During this probationary period, an employee is considered temporary, and the employer reserves the right to terminate the employment without the need for a specific reason.

Types of Leaves in Peru

Annual Leave

Mandatory annual leave in Peru is typically 30 calendar days per year.

Sick Leave

In Peru, employees may be entitled to up to 365 days (a full year) of partially paid sick leave. During the initial period from the 1st to the 20th day of illness, sick leave is paid by the employer. Following this initial period, sick leave benefits are covered by government health insurance for up to 365 days. If an employee remains ill even after the full year of sick leave, they have the option to apply for a pension due to permanent or temporary disability, rendering them unable to work. This comprehensive system aims to support employees during periods of illness and ensure access to necessary financial assistance and healthcare services.

Maternity Leave

Female employees are entitled to a maternity leave of 98 days, which includes both prenatal and postnatal leave. Furthermore, there is an additional 49 days of postnatal leave available to both parents to ensure adequate time for parental care following childbirth.

Paternity Leave

Male employees are entitled to 49 days of paternal leave to support their partners during childbirth and early childcare responsibilities.

Public Holidays in Peru

Public Holidays

January 1st: New Year’s Day
March/April (Date Varies): Holy Thursday
March/April (Date Varies): Good Friday
May 1st: Labour Day
June 24th: St. John the Baptist Day
July 28th & 29th: Independence Day
August 30th: Santa Rosa de Lima Day
October 8th: Battle of Angamos
November 1st: All Saints’ Day
December 8th: Immaculate Conception
December 24th & 25th: Christmas
December 31st: New Year’s Eve

Resources

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