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Mercans CountryIntel ® Peru Payroll And HR Insights

Mercans offers complete payroll, PEO and HR services in Peru

A fast-growing economy with key interests in mining and energy, education and tourism, Peru has free trade agreements with a number of countries globally including Australia, the United States, Canada, the European Union and China. The country has an open investment regime and an abundance of natural resources which make it an attractive investment destination. Despite political uncertainty, it is a country that has one of the lowest country risks in the Latin American region.

Doing Business in Peru

Peru has boosted its most improved nation ranking to 65th place out of 141 countries and remains committed to continuing to develop human capital. Peru has four special economic zones enabling customs-free and tax-free treatment for companies working in foreign trade until 2042. It is seen as a preferred destination for foreign direct investment. Nevertheless, travel to Peru requires a high degree of caution overall due to the high risk of violent crime.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Peru is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking

Banking Hours: 9:00 am to 6:00 pm from Monday to Saturday with a two hour break.

Working Week

The standard working week is from Monday to Saturday from 8:00 am - 4:30 pm.

Labor Law

Labor law regulates the relationship between employers and employees and collective bargaining, arbitration and right to strike. There are specific laws regulating statutory benefits, minimum standards for wages, working conditions and occupational safety and health.

Main Industries

Mining, mineral and jewel, processing, steel, metal fabrication, petroleum, natural gas

GDP Growth

0.9%

Dates & Numbers

dd/mm/yyyy

Official State Name

Republic of Peru

Population

32.78 million

Capital

Lima

Major Languages

Spanish, Quechua, Aymara

Currency

Peruvian Sol (PEN)

Internet Domain

.pe

International Dialing Code

+51

Peru
Lima, PE
5:40 am, December 2, 2022
17°C
overcast clouds

Payroll

Employees are entitled to a number of statutory benefits in respect of their wages. The minimum wage is adjusted by the government periodically in accordance with the National Laboral Council.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 6 years

Reports

Employees receive paid annual leave of 30 days

Annual Leave

Employees receive paid sick leave of 20 days

Sick Leave

Employees are entitled to 98 days of paid maternity leave and 9 days of paid paternity leave as applicable

Maternity & Paternity Leave

Employers are required to provide 6 days notice to terminate an employee

Employee Termination

The 13th month and 14thmonth payments are mandatory

13thmonth salary

930 PEN per month

Minimum Wage

Overtime pay is calculated at 25% of the employee's ordinary rate of pay for the first 2 hours of overtime

Overtime

Employees paid monthly are entitled to 12 months’ severance pay but this is not required in cases of severance due to their conduct or capacity.

Severance Pay

Tax and Social Security

A legislative decree sets out that free initiative and investments are guaranteed in all areas of economic activity. Tax incentives are also embedded in Peruvian law. Social health insurance must be paid monthly to the social health insurance authority, EsSALUD.

Tax

Income tax is withheld from wages and paid by the employer on the employee’s behalf.

29.5%

Corporate Income Tax

30%

Personal Income Tax

18%

Sales Tax

18%

VAT

Social Security

Contributions must be made for social health insurance and pensions (which are withheld by the employer). Pension contributions are set at 13% towards the National Pension System and 10% towards the Private Pension System.

-

Social Security Rate

9%

Social Security Rate for Employers

13%

Social Security Rate for Employees

Employment Law

Employees are entitled to the same labor benefits whether they are hired for an indefinite term or a fixed term. Labor legislation is protective regarding the dismissal of employees and does not establish any limits on the number of hires for staff on fixed term contracts.

Employment Agreement

A fixed term contract must be written and also signed by the employee. Legal bonuses are paid twice a year, each bonus equivalent to one month’s pay.

Working condition

In addition to their salary, employees are entitled to certain statutory benefits such as compensation for length of service, profit-sharing, family allowance, life insurance and more.

Leaves

Annual leave taken must be agreed to between the employer and employee and such leave could be split into more than 1 period. Atypical work periods are permitted provided it does not occur more than 48 hours a week over a three week period. There are other types of leave permitted such as maternity and paternity leave.

Employment termination

Any termination of an employee can only be done for a just cause which include reasons related to an employee’s capability or their conduct. When dismissed without just cause, the employee may choose between reinstatement and compensation for unfair dismissal.

30 days

Minimum notice period for terminating an employee

12 days

Total number of public holidays

48

Working hours per week

3 days

Total number of days for Compassionate & Bereavement Leave

Immigration

The hire of foreign workers is governed by the Foreign Personnel Hiring Act which ensures that both locals and foreign workers have similar rights and benefits. In practice, there are some differences and limits for foreign workers. Foreign workers are required to register their contract with the Ministry of Labor and Employment Promotion (MTPE) which is needed in order to obtain a visa that permits them to work.

Residency permits

In general, foreign workers should be hired for a fixed term up to a maximum of three years. The Ministry of Labor must approve their employment contract. A work visa is required which permits a legal stay of up to 365 days which is renewable for the same period.

Work Permit Validity

3 years

Required Documents

A passport that is valid for at least six months after the employee is due to arrive in Peru

Copies of the front and back pages of the passport

Two copies of the employee’s completed visa application form

A signed cover letter explaining the purpose of the trip to Peru

An itinerary for the time to be spent in Peru

Evidence of financial support for the employee’s trip, such as a personal income tax return and recent bank statements

A no-objection letter from the employer if a job has already been lined up in Peru.

Compliant, reliable, error-free and touchless payroll in Peru

Build the best team and hire top talent compliantly in Peru. Get in touch with Peru payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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