While onboarding employees from Peru, the employer should be knowledgeable about the Employment laws, regulations, deductions, and benefits. This section has all the necessary information that employers can use.
Employee Contract
Public and Provincial Holidays
Leave Information
Basic
In Peru, the Employment contract is an important document as it mentions all the necessary details and terms of the employment. The employee must be provided with the contract along with providing all the terms and conditions, mentioning the benefits, deductions, and leaves.
Probation Period
The probation period in Peru is 3 months long.
13th Month Pay
In Peru, 13th and 14th-month pay are mandatory.
Employee Benefits
Employers in Peru may provide the following benefits to their employees:
- Employee Insurance.
- Health Insurance.
- Pensions. Allowances.
- 13th month pay.
- 14th month pay.
- Annual paid Leave.
The payroll cycle is monthly in Peru.
Peru’s minimum wage rate is 750 PEN per month ($294) for all workers.
Once the completion of the first hour of overtime, the employee receives 25% of the hourly salary. The overtime pay increases to 35% of the hourly salary for the following hours.
Employer Payroll Cost:
| Category |
Contributions |
| Health Insurance |
9% |
Employee Payroll Cost:
| Category |
Contributions |
| Health Insurance (Employee is associated with the National Pension System) |
13% |
| Health Insurance (Employee is associated with the Private Pension System) |
12.5% |
Employee Income Tax
| Tax Units* |
Annual Income |
Tax Rate |
| 0 to 5 |
0 to 23,000 PEN |
8% |
| 5 to 20 |
23,000 to 92,000 PEN |
14% |
| 20 to 35 |
92,000 to 1,61,000 PEN |
17% |
| 35 to 45 |
1,61,000 to 2,07,000 PEN |
20% |
| 45 and above |
2,07,000 PEN and above |
30% |
*One tax unit is equal to 4,600 Peruvian soles (PEN).
VAT
The standard rate of VAT in Peru is 18%, out of which 16% is the actual VAT and 2% is Municipal Promotion Tax.
The employer has to provide a valid reason for the termination of the employment contract. In case of major casualties, the employer has to send the determination notice letter six days prior to the employee and trade union. These six days are given to the employee for the purpose of defense. According to the Peru Constitution, all the employees are protected against termination after the completion of the Probation period.
The notice period is 30 days in Peru.
Severance pay
The severance pay is only provided to the employees when the individual has completed the trial period and is dismissed without notice. The severance pay is one and a half months’ salary each month for a year.
In order to work in Peru, the employer must issue a Labor certification approval from the Department of Labor. After that, the employer has to submit the Immigrant Petition for the Alien Worker to Immigration Services (USCIS) and U.S. Citizenship in order to recognize the individual’s preference of category in Visa.
- Employment First Preference (E1): Individuals who are the priority workers and people with extraordinary ability.
- Employment Second Preference(E2): Individuals holding advanced degrees and persons with exceptional ability.
- Employment Third Preference(E3): Individuals who are skilled workers, professionals, as well as Unskilled Workers.
- Employment Fourth Preference(E4): Individuals who are certain special immigrants.
- Employment Fifth Preference (E5): Individuals who are immigrant investors.