Payroll compliance in Peru
Article 2 minute read

Payroll compliance in Peru

Peru ranks third for the complexity of its business environment, according to TMF Group’s 2022 Global Business Complexity Index, making it one of the most difficult countries to do business in. This is partly explained by the fact that Peru has at least ten different laws and regulations governing employment, although the country is expected to combine these into a single labour law at some point.

  • Labour law in Peru is mainly contained in the Labour Productivity and Competitiveness Statute of 1997, which regulates the main aspects of the employment relationship, including terms and conditions of employment, employee benefits and termination of employment.
  • Employees in Peru are entitled to a share in the profits of a company when it has more than 20 employees, with different rates mandated for different industry sectors.
  • Foreign employees must not exceed 20% of the total personnel of Peruvian companies, and the total remuneration received by foreign employees must not exceed 30% of total payroll.
  • Every year, employees must receive two statutory bonuses equal to one month’s salary: the first in July and the second in December. At the time, employers must pay two extra compensations equal to 9% of statutory bonuses (6.75% for workers affiliated to a healthcare service provider).
  • Employers contribute an additional month’s salary per year into Peru's Compensation for Time of Service (CTS) scheme – a social benefit aimed at protecting employees from loss of work – half in May and half in November. In mid-2022, the Peruvian government passed legislation to enable employees to withdraw 100% of the funds they had built up in the CTS to help people cover additional costs caused by the pandemic.

If you’re doing business in Peru and are looking to learn more about Peru’s labour laws, incorporation procedures, tax implications and compliance requirements, request a copy of our full country profile, Doing business in Peru.


Insights and updates delivered to your inbox.

Sign up now