Peru
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Introduction
General Overview & Economic Facts
- Peru, officially known as the Republic of Peru, is a country located in the west of South America
- It spans an area of approximately 1,280,000 km2 (500,000 mi2) and has a population of approximately 34 million
- Peru is well established in terms of human development, with a ranking of 79 on the HDI (2019)
- It has an upper middle income level and is one of the continent’s most prosperous economies. Peru’s economy ranks 48th by nominal GDP (2019) and 43rd by PPP (2020)
Why Employ In Peru?
- The main exports are ores, ash, gems, precious metals, fruits and nuts
- 17.21% of the population is between the ages of 15 and 24 years, with 41.03% of the population being between the ages of 25 and 54. Peru has a fairly youthful population, making it a favourable country to employ young, energetic employees
Overview Of The Labour Law
- The main sources of employment law in Peru include the Constitution, the Law of Productivity and Labor Competitiveness, the Procedural Labor Law, the Law on Collective Labor Relations, the Law on Days of Work, Hours, and Overtime, sector-specific legislation and international law
- The labour regulations provides the minimum terms and conditions for employment including working hours, leave, notice periods and severance pay
- Peru’s labour laws provide protection for both employers and employees
Fun Country Facts
- Surfing originated in Peru
- You can swim with pink dolphins in Peru
- Two-thirds of Peru is covered in prime Amazon Rain Forest
Why Use Playroll Services For Peru?
- Employing in Peru requires companies to have their own legal entity in the country as well as managing payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in Peru
- With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
- We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing your team
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Compensation for Time of Service (CTS)
8.330%
Applicable to employees working at least 4 hours per day and 1 month of effective service with the company
Life Insurance
1.00%
Healthcare Fund
National Healthcare (EsSalud)
9.00%
Private Health System (EPS)
Variable
National Service for Training on Industrial Work (SENATI)
0.75%
Family Allowance
10.00%
Applicable to employees who have children 18-24 years old who attend educational institution. Calculated on a maximum salary of PEN 930.00 per month
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Pension
Public Pension Scheme (Sistema Nacional de Pensiones, SNP)
13.00%
Private Pension Scheme (Sistema Privado de Pensiones, SPP)
12.80%
Compensation for time worked (CTS)
8.33%
Holiday Allowance
8.33%
Income Tax
10.00%
Income tax is ‘Pay As Your Earn’. Income tax is calculated in tax units called Unidad Impositiva Tributaria (UIT). In 2022, one UIT is PEN 4600.00
Income bracket per annum
Domiciled employees
0.00 – 5.00
8.00%
5.00 – 20.00
14.00%
20.00 – 35.00
17.00%
35.00 – 45.00
20.00%
45.00 or more
30.00%
Employment Terms
General
Minimum Wage
- PEN 1025.00 per month
Working Hours
- Maximum of 8 hours per day and 48 hours per week
- Minimum meal interval of 45 minutes
- Typical working hours are 09h00 to 18h00, Monday to Friday
Overtime
- Any additional working hours over regular working time or hours over agreed hours are considered overtime
Notice Period
- Employer- 6 days’ notice
- Employee- 30 days’ notice
Severance Pay
- Indefinite period contracts- 1½ monthly salaries for each full year of service, with a maximum of 12 salaries
- Fixed term contracts- 1½ monthly salaries for each month that remains until the end of their contract, with a maximum of 12 salaries
- Severance pay is not usually paid for dismissal as a result of miscounduct
Probation Period
- Non-skilled employees- 3 months
- Skilled employees- 6 months
- Managerial employees- 12 months
Bonus
- Statutory bonus July- 1 month’s salary
- Statutory bonus December- 1 month’s salary
- Extraordinary bonus-
– Where the employer pays the employee’s social contributions to “EsSalud”- 9% of the statutory bonuses
– Where the employer pays social contributions of the employee to an “EPS” (Health Provider Entity)- 6.75% of the statutory bonuses
- Compensation for length of service- 1.166 monthly remunerations of an employee’s monthly salary. Employers typically pay half in May and half in November
Public Holidays
- January 1st – New Year’s Day
- April 14th – Maundy Thursday
- April 15th – Good Friday
- April 17th – Easter Sunday
- May 1st – Labour Day
- June 29th – Feast of St Peter and St Paul
- July 28th – Independence Day
- July 29th – Independence Day Holiday
- August 30th – Santa Rosa de Lima
- October 8th – Battle of Angamos
- November 1st – All Saints’ Day
- December 8th – Immaculate Conception
- December 9th – Battle of Ayacucho
- December 25th – Christmas Day
Leave
Paid Leave / Vacation Days
- Paid leave
- Paid by employer
- 30 calendar days
Sick Leave
- Paid leave
- Paid by employer
- 20 days
Maternity Leave
- Paid leave
- Paid by Social Security
- 49 days before birth, 49 days after birth
Paternity Leave
- Paid leave
- Paid by employer
- 10 days
Bereavement Leave
- Paid leave
- Paid by employer
- Duration is at the discretion of the employer
Adoption Leave
- Paid leave
- Paid by employer
- 30 days
Family Medical Leave
- Paid leave
- Paid by employer
- 7 calendar days