How an Employer of Record works in Peru

As South America’s fourth-most populous country, with steady economic growth and competitive labor costs, Peru is an attractive country for foreign companies.

Peru has a number of locally relevant employment steps before a hire can start, which can present challenges to foreign employers.

An Employer of Record smooths the process by acting as the local employer on your behalf. This means you don't need to set up an office in Peru or hire staff who speak the local language.

The EOR takes care of all HR, payroll, tax management, and legal compliance requirements, including communications with authorities, leaving you to handle the day-to-day management of your employee. EORs like Rivermate also offer work permit support.

Peru’s labor market at a glance

The hiring market
Unemployment:	4.4% (Lima Metropolitana, Q3 2026), 5.1% nationally (Q1 2026)
Greatest hiring activity:	Lima Metropolitana, Arequipa, La Libertad
Hiring timelines:	Local hire: 4-5 days Foreign hire: ~2 months for the work permit (they cannot start work without one). Plus ~1 week to open a bank account (it is advisable to do this before starting, to avoid payment delays).
In-demand sectors:	Services, commerce, construction
In-demand roles:	Sales and sales management, marketing, business development, product management, software engineering and IT, administration, accounting, engineers, geologists (Rivermate; labor ministry)
Skill shortages:	Sales and marketing, administration, front office, customer service, operations and logistics, manufacturing

The salary market
Currency:	Sol (PEN) €1 = PEN 3.83 US$ = PEN 3.46
Monthly minimum wage:	PEN 1,230 (from October 2026); planned increase to PEN 1,300 in H1 2027, subject to a further decree. Some sectors may have a higher minimum wage (e.g. mining).
Average monthly income from work:	National average: PEN 1,925.90 (April 2025 - March 2026) Lima Metropolitana average: PEN 2,302 (Q3 2026) (Note: These figures include informal work; professional formal salaries are typically higher)
Employer costs:	Budget ~37% on top of base salary for statutory costs such as public health (EsSalud), gratificaciones (2 extra salaries), the extraordinary bonus (9% of the gratificaciones), and Length of Service Fund (CTS). This excludes mandatory life insurance (Vida Ley) and variable allowances. See ‘What are the costs of hiring in Peru?’ below for a more detailed breakdown.
Personal income tax rates (total annual employment income, 2026)	Up to PEN 38,500 - tax-free PEN 38,500 - PEN 66,000 - 8% PEN 66,000 - 148,500 - 14% PEN 148,500 - 231,000 - 17% PEN 231,000 - 286,000 - 20% Over PEN 286,000 - 30% Non-domiciled employees: 30% flat on Peruvian-source pay (no tax-free amount or deductions)

What are the costs of hiring in Peru?

Aside from base salary, there are several employer costs and allowances that need to be factored into hiring budgets. These are outlined below.

Statutory contributions

Gratificaciones	Two statutory bonuses per year, each equal to one full month’s salary, paid by 15 July and 15 December. Payment is pro-rated for partly worked periods.
Extraordinary bonus	9% of each gratificación (or 6.75% with an EPS private health plan). Paid at the same time as each gratificación.
Public health insurance (EsSalud - Seguro Social de Salud)	9% of the monthly salary (not charged on gratificación). This is paid monthly.
Length of Service Fund (CTS - Compensación por Tiempo de Servicios)	~1 month’s salary plus 1/6 of a month’s salary per year. Paid in two halves to a bank account in the employee’s name by 15 May and 15 November each year. Applicable to all employees working 4+ hours per day.
Statutory life insurance (Vida Ley - Seguro de Vida Ley)	Mandatory from day 1. Premium is set by the insurer.
Occupational risk insurance (SCTR - Seguro Complementario de Trabajo de Riesgo)	Required for high-risk activities only (e.g. mining). Premium set by the insurer.
Profit sharing	For companies that make a profit and have more than 20 employees: 5-10% of pre-tax profit, depending on sector. Paid annually.
Pension	Pension contributions are not an employer cost in Peru. The company deducts it from the employee’s pay and pays it over to the provider.

Leave and allowances

Annual leave	Employees are entitled to 30 calendar days per year after one year of service. No extra cost to the employer, but untaken leave can lead to a compensation payment.
Family Allowance	Mandatory payment of PEN 123 monthly for employees with children under 18 (or older, if they’re in higher education)
Parental Leave	Maternity Leave Statutory leave of 98 calendar days (typically 49 before and 49 after the birth). Plus 30 days for multiple births or a child born with a disability. The employer pays a subsidy for maternity leave days (based on the employee’s average daily salary over the preceding 12 months). The employer then claims the subsidy back from EsSalud. Paternity Leave Fathers are entitled to a statutory 10 consecutive calendar days following the birth, 20 days for a premature/multiple birth, 30 days if the baby has a terminal congenital disease or severe disability, or if the mother suffers serious birth complications. The employer pays paternity leave at the employee’s normal salary. Adoption Leave Employees are entitled to 30 calendar days of paid leave when adopting a child aged 12 or under, with 15 days’ written notice.
Sick Leave	The employer pays normal salary for the first 20 days of sick leave per calendar year. From Day 21, the employer pays the employee an EsSalud subsidy (based on their average daily pay over the previous 12 months) and can then claim it back from EsSalud if the employee meets the eligibility conditions. The subsidy is limited to 11 months and 10 consecutive days per illness, with longer absences subject to medical assessment.
Telework compensation	Required when teleworkers use their own internet or equipment, unless otherwise agreed. Internet and electricity are only compensated when the employee works from home.
Other common allowances (optional)	Food vouchers, private health plans, work tools, travel expenses, per diems.

Worked example

An employee has a base salary of PEN 72,000 per annum (PEN 6,000 per month). The employer pays PEN 12,000 in gratificaciones (2 x PEN 6,000), a 9% extraordinary bonus on gratificaciones of PEN 1,080 (9% x PEN 12,000), EsSalud of PEN 6,480 (9% x PEN 72,000; not charged on gratificaciones), and CTS of PEN 7,000 (6,000 + 6,000/6). Total = PEN 98,560.

Excluded: Variables such as profit sharing, the family allowance, Vida Ley, SCTR and private health premiums and the EOR fee.

Calculate employment costs

Try our employment costs calculator below to quickly learn the statutory employer costs for your intended hire.

What does hiring in Peru really look like?

Market condition	Current reality
Hiring momentum	🟢 Strong
Talent availability	🟡 Moderate (broader in Lima, less in regions)
Specialist talent	🟡 Moderate (commercial / tech roles are more in demand)
Salary pressure	🟡 Moderate

Hiring momentum

According to ManpowerGroup’s Employment Outlook Survey (Q4 2026), Peru’s hiring outlook is second only to neighbour Brazil in Latin America. While the capital, Lima, has long been the country’s commercial hub, the hiring outlook in Arequipa and La Libertad is currently even stronger.

Economic growth is estimated at 2.9-3.1% in 2026, according to a central bank expectations survey.

Talent availability

Most available talent is concentrated in Lima, where nearly 30% of Peru’s population lives. However, remote work is common and widens the talent pool considerably for roles that allow it.

The Labor Ministry states that the most in-demand professional areas currently are IT and systems, geology, engineering, and accounting.

Yet in ManpowerGroup’s Talent Shortage Survey 2026, 63% of employers report difficulty in finding the talent they need. This is felt most in sales and marketing, administration, customer service, logistics and operations, and manufacturing and production roles.

Hiring from abroad to fill gaps also has limitations: foreign employees are capped at 20% of headcount and 30% of payroll (with some exceptions).

Informal employment

According to Peru’s National Statistics Institute (INEI), roughly 69.8% of employment in Peru is informal (i.e. not covered by social security or employment benefits).

Informality is common for various reasons: much of it happens in very small businesses, where nearly 90% of workers are informal, while the OECD also points to the way social security contributions are structured, red tape for smaller firms, and other barriers to hiring. These factors contribute to the high level of unregistered work.

This means that the available talent pool is more limited than it appears; however, passive candidates can be attracted by the advantages of a formal contract, along with the security of health insurance, a pension fund, and two extra salaries per year.

Work Permits

The main work permit for foreign employees hired through a local EOR is the Worker Residence permit (calidad migratoria de trabajador residente). This requires a written fixed-term contract (up to 3 years, renewable), registered with the Labor Ministry, and a commitment to train Peruvian staff. Timeline: ~2 months, plus a recommended 1 week to open a bank account before starting, to avoid payment delays.

Peru-specific problem that employers need to know

One of the most difficult situations for an employer in Peru is terminating an employment relationship once probation ends, because that’s when the employee’s protection against unjustified dismissal begins.

Probation is set at 3 months by law. It can be extended to 6 months for qualified or trust positions and up to 12 months for management roles. During the probation period, the employer can end the contract with no cause, notice, or severance.

After probation, the employer needs a proven just cause related to the employee’s conduct or capacity (poor performance isn’t enough without strong evidence).

To avoid costly mistakes, the legal dismissal procedure must be followed precisely:

1. The employer must act promptly once an issue is identified
2. Written charges are delivered to the employee, outlining the alleged misconduct or performance issue, as well as evidence
3. The employee has 6 calendar days to respond to conduct issues, or 30 days to demonstrate capability or correct a performance issue (not required in cases of flagrant serious misconduct)
4. The employee may be relieved of duties during this period, but must still be paid
5. A written letter is issued if the dismissal proceeds, stating the specific cause and employment termination date (the employer cannot rely on a different cause later)
6. The final settlement, including pro rata CTS, untaken annual leave, and gratificación, must be paid within 48 hours, alongside their work certificate and a letter to release the CTS funds
7. The dismissal can be ruled arbitrary if any steps are missed, costing the employer 1.5 monthly salaries per year of service (up to 12). A court can order reinstatement in cases involving a protected employee (e.g. a union representative or pregnant worker).

Rivermate can handle the entire employment journey for you, from onboarding through to offboarding. We ensure that Peru’s labor laws are fully complied with, giving you complete peace of mind.

Compliance risks that employers must be aware of

Contract type

Peru has two employment contract types: indefinite and fixed-term. The indefinite contract is the default option, while fixed-term contracts are only permitted for specific reasons, such as a short-term project (the reason must be included in the contract). Each fixed-term contract type has its own maximum duration (from 6 months to 5 years), and combined fixed-term contracts cannot exceed 5 years in total.

After the probation period, employees with an indefinite contract are protected from unjustified dismissal. Termination requires a specific cause with proof, and must follow a specific procedure to avoid serious legal and financial ramifications (see section above).

On the surface, a fixed-term contract may seem more flexible, but it can cost the company much more if it ends early. In such cases, the employer must pay 1.5 monthly salaries for each remaining month, up to 12 monthly salaries. To avoid these challenges, an indefinite contract is strongly recommended for most hires.

Informal employment

Despite informal arrangements being widespread in Peru, a foreign employer should never enter into an undocumented working relationship. Peruvian authorities look at how the relationship works in practice (not what the contract says). If it is later found to be employment, the company will be liable to back pay of gratificaciones, CTS, vacation pay, and EsSalud contributions.

In addition, the labor inspectorate can impose fines of PEN 8,635 - PEN 143,660 for serious breaches in 2026, depending on the company’s size and number of affected workers. In a nutshell: even if an informal arrangement appears more cost- and paperwork-effective, the risk is substantial.

Fixed payment deadlines

Certain employer payments are subject to strict payment deadlines; missing these can lead to fines and/or interest. These include:

Gratificaciones + extraordinary bonus 15 July, 15 December
CTS deposits 15 May, 15 November
Final settlement to employee within 48 hours of exit

Benefits of hiring employees in Peru through an EOR

Partnering with an EOR as your local legal employer in Peru can help you onboard your hire faster and avoid costly mistakes.

Rivermate offers a complete hiring solution for foreign companies. We take care of:

• employee onboarding
• contract management
• HR services
• payroll setup and payroll services
• calculations of employee benefits and allowances
• communications with authorities
• dismissals handling
• work permit support for foreign workers

Ready to hire in Peru?

Hiring in Peru involves more than finding the right candidate. From managing payroll, taxes and statutory benefits administration to ensuring full compliance with Peruvian Labor Law, Rivermate handles the complexities so you can hire with confidence.

Talk to a Peru Hiring Expert

Sources:
El Peruano: Minimum wage and linked amounts (Oct 2026)
El Peruano: Gratificaciones, extraordinary bonus and SUNAFIL fines
El Peruano: Final settlement on termination
El Peruano: Hiring foreign workers – limits and requirements
El Peruano: Adoption leave
El Peruano: Central bank GDP expectations survey
El Peruano: Worker without a contract is considered indefinite
El Peruano: Legal Limits and Requirements for Hiring Foreigners
El Peruano: ManpowerGroup Talent Shortage 2026
INEI: Labour market indicators at national level, Q1 2026
Andina: INEI Lima average income, Q3 2026
Andina: Peru’s population – 2025 census
Andina: Paternity leave
EsSalud: Maternity subsidy
Congress of Peru: Telework Law 31572
PwC Worldwide Tax Summaries: Peru personal income tax
PwC Worldwide Tax Summaries: Peru social security contributions
EY Perú: CTS 2026 – calculation and deadlines
Garrigues: Profit sharing for employees in Peru
Lima Chamber of Commerce: Lima employment and unemployment, Q3 2026
Lima Chamber of Commerce: Vida Ley life insurance from day one
Lima Chamber of Commerce: Pay for working on public holidays
Forbes Perú: ManpowerGroup Employment Outlook Survey, Q4 2026
Forbes Perú: OECD recommendations on informality
Gestión: Labour Ministry occupational demand survey 2026
Gestión: Informality by company size (INEI)
Buk: EsSalud sickness subsidy – payment and calculation
Canal N: Peru’s 16 public holidays in 2026
TuCambista: US dollar to sol exchange rate, 29 October 2026
Noticiero Contable: Employment Law DS 003-97-TR (full text)
El Peruano: Updated Legal Standards (Consolidated Text of the Law on Labor Productivity and Competitiveness)