Navigating employee benefits and entitlements in Peru requires a clear understanding of both statutory requirements and common market practices. The country's labor laws mandate several key benefits designed to protect workers and ensure a basic standard of living. Beyond these legal obligations, many employers offer additional benefits to attract and retain talent in a competitive market.
Understanding the nuances of Peruvian labor law and the expectations of the local workforce is crucial for successful employment operations. Compliance with mandatory benefits is non-negotiable, while offering competitive optional benefits can significantly impact employee satisfaction and recruitment efforts. This guide outlines the essential aspects of employee benefits in Peru for 2025.
Mandatory Benefits Required by Law
Peruvian labor law establishes several mandatory benefits that employers must provide to employees under standard employment contracts. These benefits are designed to cover various aspects of an employee's well-being and financial security. Compliance is strictly enforced, and failure to meet these obligations can result in significant penalties.
Key mandatory benefits include:
- National Holidays: Employees are entitled to paid leave on designated national holidays.
- Annual Leave: Employees are entitled to 30 calendar days of paid annual leave after completing one year of service.
- Severance Pay (CTS - Compensación por Tiempo de Servicios): This is a form of severance savings deposited by the employer twice a year (May and November) into a bank account chosen by the employee. It acts as a cushion for employees upon termination. The amount is calculated based on the employee's salary and length of service.
- Gratuities (Gratificaciones): Employees are entitled to two extra monthly salaries per year, paid in July (for National Holidays) and December (for Christmas). These are calculated based on the employee's basic salary plus a portion of other regular earnings.
- Profit Sharing (Participación en las Utilidades): Companies with more than 20 employees generating taxable income are generally required to share a percentage of their pre-tax profits with employees. The percentage varies by industry (e.g., 10% for fishing, telecommunications, and industrial companies; 8% for mining, retail, and restaurants; 5% for other activities).
- Family Allowance (Asignación Familiar): Employees with dependent children under 18 (or up to 24 if pursuing higher education) are entitled to a monthly allowance equivalent to 10% of the minimum vital wage (RMV - Remuneración Mínima Vital).
- Life Insurance (Seguro de Vida Ley): Employers must provide mandatory life insurance to employees after they have completed four years of service. However, many employers provide this benefit from the first day of employment.
- Health Insurance (EsSalud): Employers must register employees with the public health insurance system (EsSalud) and contribute a percentage of the employee's salary.
Costs for mandatory benefits are primarily borne by the employer, calculated as a percentage of the employee's salary or based on specific formulas (like CTS and Gratuities). The total cost of mandatory benefits can add a significant percentage on top of the gross salary.
| Mandatory Benefit | Basis of Calculation / Requirement | Employer Cost Implication |
|---|---|---|
| Annual Leave | 30 calendar days per year after 1 year of service | Equivalent to 1 month's salary per year |
| Severance Pay (CTS) | 1/12 of annual salary + 1/12 of gratuities, paid bi-annually | Approx. 9.72% of annual salary |
| Gratuities | 1 full monthly salary in July and 1 in December | Equivalent to 2 months' salary per year |
| Profit Sharing | Percentage of pre-tax profits (varies by industry) | Variable, depends on company profitability |
| Family Allowance | 10% of Minimum Vital Wage (RMV) per eligible employee | Fixed amount per eligible employee |
| Life Insurance | Mandatory after 4 years (often provided earlier) | Premium cost (varies based on insurer and coverage) |
| Health Insurance (EsSalud) | 9% of monthly salary | 9% of gross salary |
| National Holidays | Paid leave on designated public holidays | Equivalent to normal daily wage for holiday days |
Compliance involves accurate calculation, timely payment or deposit of funds (CTS, Gratuities), proper registration with relevant authorities (EsSalud, pension funds), and maintaining accurate records.
Common Optional Benefits Provided by Employers
While mandatory benefits form the foundation, many Peruvian employers offer additional benefits to enhance their compensation packages and attract skilled professionals. These optional benefits are often influenced by industry standards, company size, and the desire to create a competitive edge.
Common optional benefits include:
- Private Health Insurance (EPS - Entidad Prestadora de Salud): Many employers supplement the mandatory EsSalud coverage with private health insurance plans. These plans typically offer access to a wider network of clinics and specialists, shorter waiting times, and better facilities. Employers often cover a significant portion or all of the premium.
- Food Vouchers or Allowances: Providing allowances or vouchers specifically for food is a popular benefit, helping employees manage daily expenses.
- Transportation Allowances: Assistance with commuting costs is another common benefit, particularly in larger cities.
- Life Insurance (Additional Coverage): Beyond the mandatory life insurance, employers may offer additional coverage amounts or policies.
- Education or Training Support: Financial assistance for professional development, courses, or degrees.
- Performance Bonuses: Discretionary bonuses based on individual or company performance.
- Additional Paid Time Off: Offering more annual leave days than the statutory minimum.
- Company Car or Allowance: Often provided for roles requiring significant travel or for senior positions.
- Mobile Phone and Internet Allowances: Covering communication costs, especially for roles requiring constant connectivity.
Employee expectations regarding optional benefits vary. In competitive sectors and for higher-skilled roles, private health insurance and performance-based incentives are often highly valued. Smaller companies or those in less competitive industries might offer fewer optional benefits, focusing primarily on mandatory requirements. The cost of these benefits is entirely at the employer's discretion and can range from a small percentage to a significant addition to the total compensation package. Offering a well-rounded package of optional benefits is key to being a competitive employer in Peru.
Health Insurance Requirements and Practices
Health insurance in Peru involves a two-tiered system: the mandatory public system and optional private plans.
- Mandatory Public Health Insurance (EsSalud): All formal employees must be registered with EsSalud. Employers contribute 9% of the employee's monthly salary to EsSalud. This contribution is solely the employer's responsibility and is not deducted from the employee's salary. EsSalud provides access to public hospitals and clinics. While mandatory, the public system can sometimes face challenges with capacity and waiting times.
- Optional Private Health Insurance (EPS): To address potential limitations of EsSalud and offer better healthcare access, many employers contract with private health insurance providers (EPS). When an employer offers an EPS plan, a portion of the 9% EsSalud contribution (typically 2.25%) is redirected to the EPS, and the employer pays the remaining 6.75% to EsSalud. The employer then pays the full cost of the EPS premium, which varies based on the plan's coverage, the employee's age, and family members included. Employees often highly value EPS coverage due to the improved access and quality of care it provides.
Compliance requires timely registration of employees with EsSalud and, if applicable, with the chosen EPS provider, along with accurate and timely payment of contributions. The cost of health insurance for the employer includes the 9% EsSalud contribution (or 6.75% to EsSalud + EPS premium if a private plan is offered).
Retirement and Pension Plans
Peru has a mandatory pension system with two main options:
- National Pension System (SNP - Sistema Nacional de Pensiones): Administered by the state (ONP - Oficina de Normalización Previsional), this is a pay-as-you-go system. Employees contribute 13% of their monthly salary to the ONP. Employers are responsible for deducting this amount from the employee's salary and remitting it to the ONP.
- Private Pension System (SPP - Sistema Privado de Pensiones): Administered by private pension fund administrators (AFPs - Administradoras de Fondos de Pensiones). Employees contribute a percentage of their monthly salary to their chosen AFP. This percentage includes contributions to their individual retirement account, a commission for the AFP, and a premium for disability and survival insurance. The total contribution rate varies slightly between AFPs but is typically around 10% for the individual account plus commissions and insurance, totaling approximately 12-13% of the salary. Employers are responsible for deducting the total contribution from the employee's salary and remitting it to the employee's chosen AFP.
New employees must choose between the SNP and SPP. If they do not make a choice within a specific timeframe, they are typically assigned to an AFP. Employers must ensure employees are registered with either the ONP or an AFP and correctly deduct and remit contributions. The cost of the pension system is primarily borne by the employee through salary deductions, but the employer has the administrative responsibility for deduction and remittance.
Typical Benefit Packages by Industry or Company Size
Employee benefit packages in Peru can vary significantly depending on the industry, the size of the company, and its financial capacity.
- Large Companies: Generally offer more comprehensive benefit packages, often exceeding mandatory requirements. They are more likely to provide robust private health insurance (EPS) plans covering employees and their families, significant food or transportation allowances, performance bonuses, and potentially additional paid time off or other perks like gym memberships or wellness programs. These companies often face higher employee expectations and use benefits as a key tool for talent acquisition and retention.
- Small and Medium-sized Enterprises (SMEs): While fully compliant with mandatory benefits, SMEs may offer fewer optional benefits compared to larger corporations. Private health insurance might be offered, but perhaps with less comprehensive coverage or higher employee contributions. Optional allowances or bonuses may be less frequent or smaller in value. Benefit packages are often more standardized across roles within the company.
- Specific Industries: Certain industries may have specific benefit norms. For example, the mining or oil and gas sectors might offer remote work allowances, housing benefits, or specialized insurance due to the nature of the work. The technology sector might emphasize flexible work arrangements, training budgets, and modern perks. Retail or service industries might have benefits tied to sales performance or shift work.
Competitive benefit packages are those that meet or exceed industry standards and employee expectations for a given role and company size. Understanding what competitors offer is crucial for attracting and retaining talent. Employee expectations are shaped by market norms, the cost of living, and the perceived value of benefits like healthcare access and financial security (CTS, Gratuities, pension). Employers must balance the cost of benefits with the need to remain competitive and compliant.
