Peru Payroll Information

Updated on: 2025/08/04 14:35 (UTC)

Overview

Peru, which officially is known as the Republic of Peru, is located in northwest South America. The countries that border Peru are Ecuador to the northwest, Colombia to the north, Brazil to the east, Bolivia to the southeast, and Chile to the south. The Pacific Ocean borders Peru to its west.

The first-order administrative divisions of Peru are known as regions or alternatively as departments, and while each department contains at least one second-order administrative division known as a province, Lima Province, which contains Peru’s capital city of Lima, is independent of any of the regions and is a distinct and separate entity from Lima Region. The 25 regions of Peru are Amazonas, Ancash, Apurímac, Arequipa, Ayacucho, Cajamarca, Callao, Cusco, Huancavelica, Huánuco, Ica, Junín, La Libertad, Lambayeque, Lima, Loreto, Madre de Dios, Moquegua, Pasco, Piura, Puno, San Martín, Tacna, Tumbes, and Ucayali. Peru’s Amazonas Region is distinct and separate from Brazil’s Amazonas State and from Venezuela’s Amazonas State.

The primary written and spoken language used in Peru is the Spanish language, which also is Peru’s official language. The English language is not commonly used in Peru. Among the indigenous languages used in Peru are Quechua, which is spoken by more than 10% of the population, and Aymara, both of which are official languages of the country. The writing system for the Spanish language is an alphabetic writing system with Latin script that includes the 26 letters of the English alphabet plus four additional letters: ch, ll, ñ, and rr, with the first, second, and fourth of these additional letters having the status of digraphs formed from two other letters. With regard to accent marks (diacritics) used in Spanish, the third of these additional letters is the combination of the letter n and a tilde, the acute diacritic is commonly used over vowels, and the diaeresis is used in rare situations. In Spanish, the country of Peru’s name is rendered as Perú. The directionality that is used for written Spanish text, as is used for English writing, is progression along horizontal lines from left to right, with successive horizontal lines read from top to bottom.

Peru’s currency is the Peruvian sol. Even though the Peruvian sol is the currency of Peru, some components of Peru’s tax system are denoted in a unit other than the Peruvian sol, the tax levy unit (unidad impositiva tributaria, abbreviated as UIT), also known as the tributary tax unit. The value of one UIT in equivalent Peruvian soles is subject to annual adjustment.

Employers in Peru are required to withhold contributions for income taxes and social taxes from an employee’s pay at the time of payment in addition to making their own contributions to social taxes. Employers also must uphold compensation and benefits provisions in the labor law.

Foreign workers in Peru generally are subject to the same tax and labor laws as Peruvian nationals.

Peruvian citizens working in the United States must comply with the appropriate visa requirements, labor, and tax laws.

News articles regarding payroll in Peru are available in

CURRENCY DETAILS

The currency of Peru is the Peruvian sol (S/.), also known as the Peruvian new sol, the Peruvian sun, the Peruvian new sun, and the Peruvian solid. The internationally recognized three-letter currency code for the Peruvian sol is PEN, which also is one of the currency’s commonly used currency symbols and is derived from Peru’s internationally recognized two-letter country code of PE, and N as an abbreviation of new. The currency code PEN differentiates the current Peruvian sol from its two predecessors with related names, the original Peruvian sol and the Peruvian Inti that honored the Incan sun deity Inti, with sol the Spanish word for sun. The original Peruvian sol and Peruvian Inti, while no longer in use, still are differentiated from the current Peruvian sol with the respective three-letter currency codes of PES and PEI. The plural form of Peruvian sol is Peruvian soles.

When an amount of Peruvian soles is written using the currency symbol S/. or one of its variants (S/, S, and S.), the symbol precedes the numerical value with a space or no space between the numerical value and symbol.

When an amount of Peruvian soles is written using the currency symbol PEN or its variant PEN., the symbol either precedes or follows the numerical value with a space between the numerical value and symbol.

One hundredth ( ¹ ⁄ ₁₀₀ ) of a Peruvian sol is referred to as a céntimo, with the plural form of céntimos.

When amounts of Peruvian soles are written in Spanish, the comma that in English separates the thousands place from the hundreds place usually is rendered, which is an exception to the general rule in Spanish that a dot (.) is used to separate the thousands place from the hundreds place, although a dot or space sometimes is used in Peruvian dialects of Spanish to separate the thousands place from the hundreds place. When amounts of Peruvian soles are written in Spanish, the dot that in English separates the ones place from the tenths place usually is rendered, which is an exception to the general rule in Spanish that a comma is used to separate the ones place from the tenths place, although a comma sometimes is used in Peruvian dialects of Spanish to separate the ones place from the tenths place.

TAXES

The national government of Peru enacts laws regarding income taxes and social taxes. Employers also are responsible for withholding amounts for social taxes in addition to contributing to their employees’ benefits.

The tax year is the calendar year from Jan. 1 through Dec. 31.

Coronavirus (Covid-19) Guidance: Deadlines for tax returns and deposits made to SUNAT for February, March, April, May, and June 2020 were extended to June, July, and August 2020 according to a schedule (Spanish) published by SUNAT. The extension for February 2020 applies to employers that earned up to 2,300 UIT in net corporate income in 2019, and the extensions for all other months apply to employers that earned up to 5,000 UIT in net corporate income in 2019.

Employers do not have to withhold pension contributions for employees enrolled in private pension plans from wages paid in April 2020.

Deadlines for tax returns and deposits made to SUNAT for January 2021 were extended to the deadlines for February 2021 for employers that earned up to 2,300 UIT in net corporate income in 2020 and that on Jan. 27, 2021, had a tax domicile in specific regions or provinces considered to have a very high alert level related to the pandemic. The affected regions are Ancash; Ica; Junín; Lambayeque; Piura; Tacna; and the provinces of Barranca, Cajatambo, Canta, Cañete, Huaral, Huarochirí, Huaura, Oyón, and Yauyos in the region of Lima.

Income Taxes

Peru’s income tax law is administered by the National Superintendency of Customs and Tax Administration (La Superintendencia Nacional de Aduanas y de Administración Tributaria, abbreviated as SUNAT).

In the context of income taxation, employment income also is known as fifth-category income (renta de quinta categoria).

Coverage: Residents and nonresidents are subject to taxes on salary payments. Residents are subject to tax on their worldwide income, while nonresidents only are subject to tax on their Peruvian-source income. Individuals are considered residents if they have established a habitual abode in Peru or live in Peru for more than 183 days in any 12 month period.

Employees: An employee is defined as an individual who provides services and is paid remuneration for the services that are under the direction of an employer.

Rates and Thresholds: Income tax rates are levied on a progressive scale for residents, with rates ranging from 8% to 30%.

Each of Peru’s personal income tax brackets contains a range of income based on the tax levy unit (unidad impositiva tributaria, abbreviated as UIT). The equivalent worth of one tax levy unit in Peruvian soles is subject to annual adjustment, with the valuations available from SUNAT.

Effective for 2021, one tax unit is valued at S /. 4,400. Effective for 2020, one tax unit was valued at S/. 4,300.

Effective for 2021, Peru’s personal income tax rates for residents and minimum and maximum amounts of income for each tax bracket are as follows:

Range of Annual Income in Tax Levy Units (UIT)	Range of Annual Income Based on Peruvian Sol Equivalence	Income Tax Rate
Up to 5 UIT	Up to S/. 22,000	8%
More than 5 UIT and up to 20 UIT	More than S/. 22,000 and up to S/. 88,000	14%
More than 20 UIT and up to 35 UIT	More than S/. 88,000 and up to S/. 154,000	17%
More than 35 UIT and up to 45 UIT	More than S/. 154,000 and up to S/. 198,000	20%
More than 45 UIT	More than S/. 198,000	30%

Nonresidents are assessed a flat personal income tax rate of 30%.

Effective for 2020, Peru’s personal income tax rates for residents and minimum and maximum amounts of income for each tax bracket were as follows:

Range of Annual Income in Tax Levy Units (UIT)	Range of Annual Income Based on Peruvian Sol Equivalence	Income Tax Rate
Up to 5 UIT	Up to S/. 21,500	8%
More than 5 UIT and up to 20 UIT	More than S/. 21,500 and up to S/. 86,000	14%
More than 20 UIT and up to 35 UIT	More than S/. 86,000 and up to S/. 150,500	17%
More than 35 UIT and up to 45 UIT	More than S/. 150,500 and up to S/. 193,500	20%
More than 45 UIT	More than S/. 193,500	30%

Registration: New employees must be registered by employers with the Ministry of Labor within 24 hours of beginning work. Registration of employees may be completed online using SUNAT’s online registration process, T-Registro, which also is known as the Labor Information Registry (Registro de Información Laboral).

All businesses in Peru must obtain a taxpayer registration number (Registro Único de Contribuyentes, abbreviated as RUC). The last digit of the number decides which dates employers must submit taxes.

Taxable Amounts: Peru residents are taxed on their worldwide income, including salaries, commissions, emoluments, bonuses, and generally any remuneration for personal services.

If the income is sourced in Peru, the payor must withhold on the payments to a nonresident. Generally, individuals are taxed in full on the fair market value of benefits received. Termination and severance pay, as well as company owned cars, maternity benefits, and housing provided to employees, do not create taxable income.

An annual deduction of 7 UIT may be subtracted from employees’ taxable income, as annual income of up to 7 UIT is exempt from income tax withholding.

Effective for 2021, 7 UIT is equivalent to S/. 30,800. Effective for 2020, 7 UIT was equivalent to S/. 30,100.

Withholding Methods: Calculations for performing tax withholding from employment income are detailed in SUNAT’s guide for withholding.

Employees who start work for an employer and have previously worked for a different employer in the same year are required to submit to the new employer an Income and Withholding Report (Reporte de Rentas y Retenciones), with which the employer may credit wages paid and tax withheld by previous employers in that year toward the employee’s income tax liability.

Returns and Remittance: Employers are required to use the Monthly Payment Form (Planilla Mensual de Pagos, abbreviated as PLAME) to report data to SUNAT regarding income tax withheld from employment income. This electronic return (planilla electrónica) is used for reporting income taxes and social taxes other than industry-specific social taxes. Employers must download the software for creating electronic PLAME files, PDT Planilla Electrónica PLAME, which is available from SUNAT, to create electronic PLAME files for submission to SUNAT.

Electronic PLAME files may be submitted to SUNAT via a SUNAT Online Operations (SUNAT Operaciones en Línea) electronic filing portal, My Declarations and Payments (Mis Declaraciones y Pagos), which is accessible by clicking the link by that name at the top of the SUNAT homepage. Payments of withheld income tax also may be submitted through the My Declarations and Payments portal.

The due dates for submitting remittances of withheld income tax and monthly returns detailing those amounts to SUNAT vary among employers based on the last digit of their taxpayer registration number (Registro Único de Contribuyentes, abbreviated as RUC).

In general, with regard to paying withheld income taxes due for a month and filing the PLAME for that month detailing payment of those taxes, the filing and payment due date for an employer whose RUC ends in the number:

• 0 is the 10th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required;
• 1 the 11th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required;
• 2 or 3 is the 12th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required;
• 4 or 5 is the 13th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required;
• 6 or 7 is the 14th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required; and
• 8 or 9 is the 15th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required.

The specific due dates for remitting income taxes withheld from payments in 2021 and filing reports detailing 2021 income tax withholding data were available from SUNAT’s Monthly Obligations Schedule - Year 2021 (Cronograma de Obligaciones Mensuales - Ejercicio 2021). The specific due dates for remitting income taxes withheld from payments in 2020 and filing reports detailing 2020 income tax withholding data are available from SUNAT’s Monthly Obligations Schedule - Year 2020 (Cronograma de Obligaciones Mensuales - Ejercicio 2020).

Regardless of the last digit of their RUC, employers that are notified by SUNAT that SUNAT considers them to be Good Taxpayers (Buenos Contribuyentes) based on their history of remitting taxes and reporting tax data may be eligible to remit income taxes withheld from payments of employment income during a month and file the PLAME detailing income tax withholding data for that month by the 16th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required. SUNAT maintains a List of Good Taxpayers (Relación de Buenos Contribuyentes).

Recordkeeping: Employers are required to keep payroll records for each employee for at least five years after termination.

Penalties: If an employer does not withhold taxes or submits withheld taxes late, they incur a fine of 50% of the amount due. Fines can be significantly reduced if employers submit the correct amount before the tax authority officially notifies the employer of the offense.

Social Taxes

Peru’s social taxes mainly consist of a public pension system, a private pension system, and the Social Health Insurance program, which translates to Seguro Social de Salud in Spanish and is more commonly known in Spanish as EsSalud. Public social security options are supervised by the Comptroller General of Peru and administered by SUNAT.

When employees enter the workforce, they must choose between being covered by the public pension system known as the National Pension System (Sistema Nacional de Pensiones, abbreviated as SNP) and being covered by the Private Pension System (Sistema Privado de Pensiones, abbreviated as SPP). The National Pension System is administered by the Pension Normalization Office (Oficina de Normalización Previsional, abbreviated as ONP). Each private pension is administered by one of Peru’s pension fund administrators (administradoras de fondos de pensiones, abbreviated as AFPs).

Members of the National Pension System may switch to the Private Pension System but may not switch back to the public option except under certain circumstances. The pension programs are funded by contributions from employees, and employers and the government generally do not make pension contributions.

The cost of the public health insurance program, EsSalud, is entirely covered by employers. Employees can choose to opt out of the EsSalud program and receive health care from one of Peru’s private health care providers (entidades prestadoras de salud, abbreviated as EPS) if 51% of the employer’s employees agree to the change.

Employees are entitled to work-injury benefits funded through employer contributions, which depend on the employer’s assessed degree of risk and the reported accident rate. Benefits include necessary medical, surgical, and hospital care and appliances until full recovery or certification of permanent disability.

Employees who work for the same employer for at least four years are entitled to a life insurance policy provided by the employer that must be registered with the labor authority.

Coverage: All dependent employees in Peru are covered by EsSalud.

All employees must opt into either a public or private pension plan.

Rates and Thresholds: Some social taxes are assessed on employees, and others are assessed on employers.

Pensions: Employees enrolled in the public pension system are assessed on a monthly basis a pension contribution rate of 13% of their wages. There is no cap on the amount of wages subject to public pension system contributions, but if an employee during a month is paid less than the monthly minimum wage, the employee would be assessed a public pension system contribution for the month as if the employee were paid the monthly minimum wage.

Employees enrolled in the private pension system are required to be assessed by their pension fund administrator on a monthly basis a pension contribution rate of 10% of their wages; plus a percentage of their wages for disability, survivor, and burial expenses insurance; plus a percentage of their wages for paying a commission to the pension fund administrator for its services and of which some may be invested by the pension fund administrator on behalf of employees. The contribution rate for disability, survivor, and burial expenses insurance, and the contribution rate for providing a commission to the pension fund administrator, are subject to variation among Peru’s four private pension fund administrators, which are Habitat, Integra, Prima, and Profuturo. Other private pension fund administrators may join the market, and Peru previously had more than four private pension fund administrators. However, since Oct. 1, 2013, each private pension fund administrator has assessed a disability, survivor, and burial expenses insurance contribution rate equal to the disability, survivor, and burial expenses insurance contribution rates assessed by the others.

Effective starting Jan. 1, 2021, the disability, survivor, and burial expenses insurance contribution rate is 1.74%. Effective for 2020, the disability, survivor, and burial expenses insurance contribution rate was 1.35%.

The comparative contribution rates among Peru’s four private pension fund administrators for private pension fund administrator commissions are available from a rates comparison page of the Superintendency of Banking, Insurance, and Pension Fund Administrators (Superintendencia de Banca, Seguros, y AFP).

Each private pension fund administrator has two separate types of commissions, and between the two, the commission for which an employee must pay assessments is largely based on the way the employee joined the fund. A commission on flow (comisión sobre flujo) is a monthly assessment based on wages paid to an employee, and this type of commission is available only to those who joined a private pension fund by Jan. 31, 2013, and have not chosen to switch to another commission model since then. A mixed commission (comisión mixta) consists of a commission on flow component with a monthly assessment, plus an annual assessment on the balance of an employee’s private pension fund account. Starting Feb. 1, 2023, the commission on flow component of the mixed commission is to be eliminated, and the mixed commission is to be replaced by a type that is solely an annual commission on balance (comisión anual sobre saldo) of an employee’s private pension fund account.

There is no minimum monthly amount of wages upon which private pension fund contribution rates must be assessed, and there also is no maximum monthly amount of assessable wages for the pension contribution rate of 10% and the commission rate, but there is a maximum monthly amount of assessable wages for the disability, survivor, and burial expenses insurance contribution rate. This amount also is known as the maximum insured remuneration (remuneración máxima asegurable). The amount is subject to adjustment on the first day of each quarter.

Effective from July 1 to Sept. 30, 2021, the maximum monthly amount of assessable wages for the disability, survivor, and burial expenses insurance contribution rate is S/. 10,111.55. Effective from April 1 to June 30, 2021, the maximum monthly amount of assessable wages for the disability, survivor, and burial expenses insurance contribution rate was S/. 10,043.52. Effective from Jan. 1 to March 31, 2021, the maximum monthly amount of assessable wages for the disability, survivor, and burial expenses insurance contribution rate was S/. 9,898.68. Effective from Oct. 1 to Dec. 31, 2020, the maximum monthly amount of assessable wages for the disability, survivor, and burial expenses insurance contribution rate was S/. 9,840.89. Effective from July 1 to Sept. 30, 2020, the maximum monthly amount of assessable wages for the disability, survivor, and burial expenses insurance contribution rate was S/. 9,792.61. Effective from April 1 to June 30, 2020, the maximum monthly amount of assessable wages for the disability, survivor, and burial expenses insurance contribution rate was S/. 9,788.95. Effective from Jan. 1 to March 31, 2020, the maximum monthly amount of assessable wages for the disability, survivor, and burial expenses insurance contribution rate was S/. 9,707.03. Effective from Oct. 1 to Dec. 31, 2019, the maximum monthly amount of assessable wages for the disability, survivor, and burial expenses insurance contribution rate was S/. 9,665.33.

Employees may choose to provide voluntary contributions to private pension funds in addition to the required contributions if they fulfill the voluntary contribution eligibility conditions of their pension fund administrator, but employees may not provide voluntary contributions to the public pension system.

Health insurance: Employers generally are required to contribute 9% of an employee’s wages to EsSalud. Employers of employees who receive coverage under a private health care provider are required to remit 2.25% of the employees’ wages to the private health care provider and to remit 6.75% of the employees’ wages to EsSalud, with the contribution to the private health care provider functioning as a discount of 25% of the contribution for EsSalud, as the reduced EsSalud rate of 6.75% is 75% of the standard EsSalud contribution rate of 9%.

Occupational injury and disability insurance: Employers are required to contribute 0.63% to 1.84% of covered payroll, with the contribution rate depending on the level of risk.

Life insurance: Under Peru’s Life Insurance Law (Seguro Vida Ley), formally known as Legislative Decree No. 688 (Decreto Legislativo No. 688), employers must provide life insurance to employees who have worked for them for at least four years, regardless of whether the four years were consecutive. The life insurance contribution rates payable by employers range from 0.53% to 1.46% based on employees’ monthly wages, with the rates depending on the type of labor in which employees are involved.

Industry-specific social taxes: Some employers are required to pay other contributions based on the activities their employees perform. The additional contributions include:

• Contribution to the National Industrial Vocational Training Service (Servicio Nacional de Adiestramiento en Trabajo Industrial, abbreviated as SENATI): Employers with employees engaged in industrial activities that are classified as part of Category D of the International Standard Industrial Classification of Economic Activities, and employers with employees who perform installation, repair, or maintenance work, are assessed by SENATI a contribution equal to 0.75% of wages they paid to their workers. Employers with any of the aforementioned types of employees but that in the previous year on average had fewer than 21 workers are not required to pay a contribution to SENATI. SENATI is an industrial education program.
• Contribution to the Administrative Committee of the Fund for the Construction of Housing and Recreational Centers (Comité Nacional de Administración del Fondo para la Construcción de Viviendas y Centros Recreacionales, abbreviated as CONAFOVICER): This fund, which is applicable to workers in the construction industry, provides social security, housing, and recreational benefits to workers in the construction industry. Employees are required to contribute 2% of their salaries to the fund via deductions from their pay.
• Contribution to the Supplementary Mining, Metallurgical and Steel Retirement Fund (Fondo Complementario de Jubilación Minera, Metalúrgica y Siderúrgica, abbreviated as FCJMMS): For this fund, mining, metallurgical, and steel companies are required to contribute 0.5% of their annual gross earnings, as well as withhold and remit 0.5% of the gross monthly remuneration of their workers.
• Contribution to the Special Fishing Regime (Régimen Especial Pesquero, abbreviated as REP): Employers with large fishing vessels are required to inform their fishermen employees within five days of the start of their employment that these employees may join the Special Fishing Regime for pensions instead of the standard public National Pension System or a private pension fund. Such employees within 10 days of the start of their employment need to indicate whether they want to join the Special Fishing Regime or another pension system. For each employee in the Special Fishing Regime, the employer on a monthly basis must withhold and remit 8% of the employee’s wages for the regime, and the employer also must make a contribution to the regime equal to 5% of the employee’s wages.

Registration: New employees must be registered by employers with the Ministry of Labor within 24 hours of beginning work. Registration of employees and any information related to the employment of an employee can be filed online using SUNAT’s online registration process, T-Registro.

Employers are required to provide new hires with an Informative Bulletin (Boletín Informativo) available from the ONP that is with regard to differences between public and private pension options. Employees have 10 days to inform their employer of whether they would like to participate in the public or private pension system.

Taxable Amounts: Contributions are calculated based on all salary and wages.

Withholding Methods: Employers are required to withhold social taxes from employees’ wages on a monthly basis using the Monthly Payment Worksheet (Planilla Mensual de Pagos, abbreviated as PLAME), which may be downloaded from SUNAT. PLAME facilitates Peru’s pay-as-you-earn (PAYE) system.

Returns and Remittance: As with reporting data regarding income tax withholding, employers are required to use the Monthly Payment Form (Planilla Mensual de Pagos, abbreviated as PLAME) to report data to SUNAT regarding social taxes other than industry-specific social taxes. Employers must download the software for creating electronic PLAME files, PDT Planilla Electrónica PLAME, which is available from SUNAT, to create electronic PLAME files for submission to SUNAT.

Electronic PLAME files may be submitted to SUNAT via a SUNAT Online Operations (SUNAT Operaciones en Línea) electronic filing portal, My Declarations and Payments (Mis Declaraciones y Pagos), which is accessible by clicking the link by that name at the top of the SUNAT homepage. Payments of social taxes other than industry-specific social taxes also may be submitted through the My Declarations and Payments portal.

The due dates for submitting remittances of social taxes other than industry-specific social taxes and monthly returns detailing those amounts to SUNAT vary among employers based on the last digit of their taxpayer registration number (Registro Único de Contribuyentes, abbreviated as RUC).

In general, with regard to paying social taxes due for a month and filing the PLAME for that month detailing payment of those taxes, the filing and payment due date for an employer whose RUC ends in the number:

• 0 is the 10th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required;
• 1 the 11th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required;
• 2 or 3 is the 12th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required;
• 4 or 5 is the 13th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required;
• 6 or 7 is the 14th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required; and
• 8 or 9 is the 15th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required.

The specific due dates for remitting social taxes due from payments in 2021 and filing reports detailing 2021 social tax data were available from SUNAT’s Monthly Obligations Schedule - Year 2021 (Cronograma de Obligaciones Mensuales - Ejercicio 2021). The specific due dates for remitting social taxes due from payments in 2020 and filing reports detailing 2020 social tax data are available from SUNAT’s Monthly Obligations Schedule - Year 2020 (Cronograma de Obligaciones Mensuales - Ejercicio 2020).

Regardless of the last digit of their RUC, employers that are notified by SUNAT that SUNAT considers them to be Good Taxpayers (Buenos Contribuyentes) based on their history of remitting taxes and reporting tax data may be eligible to remit social taxes due based on payments of employment income during a month and file the PLAME detailing social tax data for that month by the 16th day of the following month when excluding Saturdays, Sundays, and public holidays for which paid leave is required. SUNAT maintains a List of Good Taxpayers (Relación de Buenos Contribuyentes).

Contributions to SENATI for a month generally are due by the 12th business day of the next month, with business days generally defined as days other than Saturdays, Sundays, and public holidays for which paid leave is required. The specific due dates for remitting SENATI contributions due based on payments in the current year are available from SENATI’s Contributions (Contribuciones) information page. A Contribution Affidavit (Declaración Jurada de la Contribución) must be filed each June 30 that details SENATI contributions for the previous year and first half of the year when the form is due.

Contributions to CONAFOVICER for a month are due by the 15th day of the next month. Methods for electronically paying the contributions, including applicable numerical codes to accompany the payments, are available from CONAFOVICER’s website.

Recordkeeping: Employers are required to keep payroll records for each employee for at least five years after termination.

Penalties: Failure to submit correct EsSalud contributions or withhold public pension contributions can result in fines up to S/. 720 and no less than 5% of one UIT.

Other Taxes

Peru’s national government does not assess any taxes on employment income other than those covered in the Income Taxes and Social Taxes sections of this primer.

State/Jurisdiction Taxes

Taxes on employment income are not assessed by any of Peru’s regions or local jurisdictions.

COMPENSATION AND BENEFITS

Employer-employee relations are governed by the 1933 Peruvian Constitution, the Law on Labor Competitiveness and Productivity (LLCP), the Law on Training and Labor Promotion (LTLP), collective bargaining agreements, and case law.

These regulations cover minimum wage, overtime, hours of work, holidays, leave, wage payment, termination pay, bonuses, and retirement plans. Workers’ compensation is covered under social taxes.

Coronavirus (Covid-19) Guidance: Employers unable to offer remote work because of their economic condition may suspend business if a ratio based on the wages of all employees reported for tax purposes divided by the employer’s income in the month before the suspension starts increases by specified percentages compared to the same ratio calculated for the same month of 2019. For employers not affected by Covid-19 restrictions, the ratio must increase by 12% for micro or small employers or 26% for medium or large employers. For employers partially or entirely closed by Covid-19 restrictions, the ratio must increase by 8% for micro or small employers or 12% for medium or large employers. These percentages are effective for suspensions starting April 2, 2021, or later.

A wage subsidy program, Let’s Recover Formal Employment (Recuperemos el empleo formal), provides subsidies to employers for employees who earn up to S/. 2,400 per month and were hired or returned from suspension or unpaid leave from November 2020 to April 2021. To qualify, an employer’s income must have decreased by at least 20% in April and May 2020 compared to the same months of 2019, but compared to October 2020 the employer must have also increased both the total number of employees and the number of employees who earn up to S/. 2,400 per month. For employers with more than 100 employees, the total wages paid to employees who earn more than S/. 2,400 per month must be at least 80% of the same figure from October 2020.

The subsidy is provided for up to six months per employee and ranges from 35% to 55% for the first three months of subsidies, and 17.5% to 27.5% for the next three months, of eligible employees’ wages. The percentage depends on, using data from October 2020, whether the employee was age 18 to 24 or at least age 25 and the type of employment contract. Subsidies are provided for the months covered by the program until September 2021.

Vaccine leave: Effective starting Aug. 8, 2021, employees may take up to four hours of paid leave to receive a Covid-19 vaccine by giving at least 48 hours’ notice.

Minimum Wage

Effective since April 1, 2018, for employers in general and effective since May 1, 2018, for qualifying small employers, Peru’s monthly minimum wage is S/. 930. Effective from May 1, 2016, to March 31, 2018, for employers in general and to April 30, 2018, for qualifying small employers, Peru’s monthly minimum wage was S/. 850.

There is no established schedule for raising the minimum wage.

In Peru, the minimum wage also is known as the minimum vital remuneration (remuneración mínima vital, abbreviated as RMV).

Overtime

Employees working beyond the normal workday of eight hours must be paid an overtime premium of 25% for the first two overtime hours worked during the workday and 35% for additional overtime hours worked during the workday. Employees working on public holidays must be compensated at a 100% premium.

Employers are required to provide daily refreshment breaks of at least 45 minutes. If the employer and the employee agree, overtime work may be compensated by an equal amount of time off.

Employees performing night work, defined as any work performed between 10 p.m. and 6 a.m., must be paid no less than the minimum monthly wage plus 35%.

Overtime work is voluntary for both the employer and the employee, except when prescribed by law. When an employee works overtime and the employer does not pay appropriate compensation, the employment contract is considered to have been breached, and the employer can be required to pay both the overtime and a 100% penalty.

Hours of Work

The constitution limits normal hours of work to eight a day, 48 a week; a weekly day of rest is mandated, typically being Sunday.

Atypical workdays may be established, provided they do not in combination exceed 48 hours over a workweek.

Holidays

Peru’s national public holidays (feriados) for which paid leave is required are:

• Jan. 1: New Year’s Day (Año Nuevo)
• Holy Thursday (Jueves Santo), known internationally as Maundy Thursday: the Thursday immediately before Easter Sunday.
• Good Friday (Viernes Santo): the Friday immediately before Easter Sunday.
• Easter Sunday (Domingo de Resurrección)
• May 1: Labor Day (Día del Trabajo), which internationally is the most common date for Labor Day, celebrating workers around the world.
• June 29: Day of Saint Peter and Saint Paul (Día de San Pedro y San Pablo)
• July 28: Independence Day of Peru (Día de la Independencia del Perú), celebrating Peru’s declaration of independence from Spain on July 28, 1821.
• July 29: Feast of Independence of Peru (Fiesta de la Independencia del Perú), an additional day of celebration for Peru’s independence.
• Aug. 30: Festivity of Saint Rosa of Lima (Festividad de Santa Rosa de Lima), celebrating the life and work of Saint Rose of Lima.
• Oct. 8: Celebration of the Battle of Angamos (Celebración del Combate de Angamos): recognizing the anniversary of the War of the Pacific’s Battle of Angamos, which occurred on Oct. 8, 1879.
• Nov. 1: All Saints’ Day (Día de Todos los Santos): celebrating the life and work of all saints.
• Dec. 8: Immaculate Conception Day (Día de la Inmaculada Concepción), known internationally as the Feast of the Immaculate Conception: recognizing the Immaculate Conception in Christian theology.
• Dec. 25: Christmas (Navidad)

The president of Peru annually issues a decree identifying at least one nonworking day adjacent to a national public holiday for which paid leave is required to be granted to public-sector workers and for which private employers are encouraged, but not required, to provide paid leave. The nonworking days are not treated as public holidays for the purpose of determining tax-related due dates.

The three nonworking days that typically are designated are July 30, which extends the celebration of Peruvian independence; Aug. 29, which extends the Festivity of Saint Rosa of Lima; and Oct. 31, which extends the celebration of All Saints’ Day, and these three days were designated as nonworking days for 2019. However, two nonworking days were designated for 2020, Oct. 9 and Dec. 31, and a third day scheduled for July 27 was initially designated but rescinded.

Regional, provincial, and district governments also designate public holidays, and these holidays vary as to whether paid leave is required for them.

Christian holidays in Peru with varying dates among Gregorian Calendar years: The dates of two of Peru’s national public holidays for which paid leave is required, Maundy Thursday and Good Friday, are based on the date of Easter Sunday, and Easter Sunday itself is a holiday for which paid leave is required in Peru. Each year, Easter Sunday is celebrated on the first Sunday after the first full moon is visible following the first day of Spring of that year. As Peru accords with the Western method for determining Christian holiday dates based on the Gregorian Calendar instead of the Eastern method for determining Christian holiday dates based on the Julian Calendar, the first day of Spring is considered to be the Vernal Equinox of March 21. The date of Easter Sunday varies among years because it is based on lunar cycles, which do not directly correlate to the Gregorian Calendar as it is a solar calendar, not one based on phases of the Moon.

Leave

After the first year of employment, every worker has the right to 30 calendar days of paid vacation per year and to receive the equivalent of their monthly salary as vacation pay.

Employees paid commissions receive their monthly salary plus the average of their commissions over the past six months. If the employee stops working before taking vacation leave, the company must pay the vacation pay proportionately.

Sick leave: Employees who have contributed to social security for at least three consecutive months or four months out of the six months before the incapacity began are entitled to paid sick leave. The Social Security Health Insurance Program, EsSalud, pays a monthly benefit equal to 100% of the worker’s average daily earnings in the last four months; this benefit is paid after a 20 day waiting period for up to 18 months. The employer pays the employee’s full salary during the waiting period.

Maternity leave: Female workers are entitled to maternity leave of 49 days before the due date and 49 days after childbirth. Maternity leave may be extended for 30 days in cases of multiple births or birth of children with disabilities. If the birth occurs later than the due date, the intervening days are treated as paid sick leave. After child birth, female workers are entitled to one hour daily of breastfeeding leave, until the child is at least one year of age.

The worker may choose to postpone prenatal leave and take all the leave after giving birth. During leave, women receive a maternity benefit equal to 100% of the average daily wage over the four months preceding the birth, subject to a maximum, which is paid by the Social Security Health Insurance Program (EsSalud).

Paternity leave: New fathers are entitled to paternity leave as follows:

• natural birth or caesarean section: 10 consecutive calendar days;
• premature or multiple births: 20 consecutive calendar days; and
• births for which the infant has a terminal congenital disease or severe disability, or for which the mother has serious health complications: 30 consecutive calendar days.

Employees can choose to begin paternity on any of the following days:

• the baby’s date of birth;
• the day the mother or baby are discharged from the hospital; and
• the third day before the expected date of birth, as accredited by a medical certificate.

The father is entitled to the mother’s leave entitlement if she dies during childbirth or maternity leave.

Employees may use their annual holiday leave immediately following the end of their paternity leave. However, employees who intend to extend their absence from work by using annual leave must notify their employer at least 15 calendar days before the probable date of birth.

Adoption leave: Adoption leave is available for employed parents. Employees can take a maximum of 30 days of consecutive adoption leave, provided that the adopted child is not more than 12 years old. The leave period commences from the day after the judicial decision of adoption is entered.

Caretaker Leave: Effective since June 28, 2019, employees are entitled to paid leave of 56 consecutive or alternating hours per year to provide care and support to disabled individuals who are under their care. Based on an agreement with the employer, the employee may request to use additional hours of caretaker leave beyond those that the employee accumulated and would be obligated to offset these additional hours with hours of overtime work.

Wage Payment

Employees must sign and receive a copy of a receipt when they receive their paychecks. There are no obligations for wages to be in a particular currency.

An employer may deduct union dues from employees’ pay if requested to do so by the union and authorized in writing by the employees.

Termination Pay

Employers must give workers written notice of not less than six calendar days prior to termination so that the worker can present a written defense to any charges brought against him or her or of 30 calendar days to prove his or her professional capacities and correct any error.

Employees dismissed for just cause are not entitled to tax-free severance pay.

Employees not dismissed for just cause are to be entitled to compensation as follows:

• under an indefinite term employment contract: 1.5 monthly salaries for each year of employment plus the pro rata portion for the incomplete year; and
• under a fixed-term contract, including foreign employees: 1.5 monthly salaries for each month pending the length of the contract.

In no case will the indemnity be higher than the equivalent of 12 monthly salaries.

Employees can receive tax-free compensation for time of service (CTS), one month’s wages as well as one sixth of a year’s salary for each year of service, in the event of retirement, resignation or death. Under CTS, the employer is obligated to deposit half of a month’s wages in an interest-accruing bank account chosen by the employee and in the name of the employee twice a year, within the first half of May and October, in order to provide for the compensation. Prior to the end of employment, employees can gain access to 70% of the deposited amount that exceed an amount equal to six months of wages.

Bonuses and Special Benefits

Employers are required to pay a bonus twice a year, in July and in December. Each bonus is equal to one month of salary. If the employee has received a commission, the average of commissions received during the last six months is added to the bonus. If the employee stops working before July or December, the company must pay the bonus proportionately.

Peruvian labor law requires employers with 21 or more employees to share a portion of annual profits. The specific amounts required to be shared vary among industries and include:

• fishing, telecommunication, or industrial companies: 10%;
• mining, business wholesale, or retail companies or restaurants: 8%; and
• businesses that perform other activities: 5%.

Family Allowance: Employers are required to pay an amount equal to 10% of the minimum wage to workers who have one or more dependent children under the age of 18, or children over 18 enrolled in vocational or university education.

Retirement Plans: When employees enter the workforce, they must choose between the public pension system (ONP) and the private pension system (SPP). ONP members may switch to the SPP but may not switch back except under certain circumstances. These programs are funded by contributions from employees.

Private pension plan administrators, Administradora de Fondos de Pensiones (AFP), are licensed and supervised by the government’s Superintended of Banks, Insurance and Pension Fund Administrators (SBS). There are currently four AFP options, Habitat, Integra, Prima, and Profuturo.

Peru’s state-run pension system is covered under social taxes.

Coverage: Participation in SPP is open to all citizens and voluntary. Both public and private sector workers make the choice of which of the four private pension plans to chose and are then covered until they cease making contributions.

Rate: Employee contribution rates can vary depending on wages and the AFP but generally average 14 to 15%. The complete amount can be viewed on the government’s SPP website, which is updated monthly.

Taxable Wages: Contributions are calculated based on all salary and wages.

Registration: Employees must inform employers of their choice in AFP within ten days of beginning employment. Excluding certain circumstances, employees generally are required to remain with an AFP for at least two years.

Returns and Remittance: Employers must withhold payments to the employee’s AFP and remit within five days of the end of the following month. The payments can be submitted physically via a Peruvian bank or financial institution or electronically.

Employers also must submit an annual report to SBS detailing all contribution and deduction amounts of each employees.

Recordkeeping: Employers are required to keep payroll records for each employee for at least five years after termination.

Penalties: An employer that does not submit contributions on behalf of employees must pay a penalty as well as penalty interest rates set by SBS.

Workers’ Compensation

Workers’ compensation is covered under social taxes.

Recordkeeping

Employers must retain records regarding compensation and benefits data.

FOREIGN WORKERS

Foreign workers are entitled to the same rights as Peruvian citizens and are generally covered by the same tax and workplace laws. Peruvian laws forbids the number of foreign workers in an organization to exceed 20% of the total number of employees or the wages of foreign workers to exceed 30% of an organization’s Peruvian payroll.

Visas: Foreign workers must obtain a work permit in order to work in Peru. Employment contracts with foreign personnel must be executed in writing and on a fixed term basis (a maximum of three years, renewable successively for equal periods), and must include the commitment to train a national worker in the same occupation.

Employers are required to have a written employment document with a foreign worker registered with the Ministry of Labour and Employment Promotion.

Individuals from Chile, Colombia, and Mexico are entitled to work visas in Peru under the Pacific Alliance agreement.

Taxes: Nonresidents are subject to a flat rate tax of 30% on their gross remuneration and salaries for services performed in Peru.

The submission of a residence certificate is required for claiming tax benefits granted under a tax treaty.

Wages/Payments: There are no particular requirements that employees be paid in a particular currency.

WORKING IN THE UNITED STATES

Foreign workers from Peru must meet general visa requirements and be certified to be employed in the U.S. General visa requirements for the U.S. are included in the separate

U.S. employers also must check the names of all new-hires and employees against the Specially Designated Nationals and Blocked Persons List, administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). Because OFAC prohibits financial transactions with individuals on the list, employers cannot employ them and may face fines for failing to comply.

Peruvian workers also are eligible to work in the U.S. under H-2B visas, which cover labor or services of a temporary or seasonal nature in occupations other than agriculture or registered nursing. The number of H-2B visas issued each year is limited by U.S. law.

For tax purposes, Peruvian citizens are subject to U.S. employment-based taxation on income earned in the U.S. unless they work under specific visa types that exempt earnings from taxes.

State and local taxation of Peruvian workers also can apply.

The U.S. labor laws apply to all workers employed and providing services in the country.

Work eligibility as an employee is contingent upon Department of Homeland Security and Labor Department approval and the employee receiving a U.S. Social Security number from the Social Security Administration.

Tax Residency: In general, employees working in the U.S. on a temporary basis are considered nonresidents for tax purposes unless they qualify for resident status. Employees can be granted permanent resident status through the so-called green card test or if they meet the substantial presence test under the U.S. tax code. More information on these requirements is in the

Permanent residents are subject to U.S. tax requirements the same as U.S. citizens and are taxed under the U.S. system on their worldwide earnings.

Income Taxes: Generally, nonresidents in the U.S. who are from Peru and are working in the U.S. are subject to U.S. taxes based on their U.S.-sourced income. Income is taxed differently based on whether it is categorized as wage income or nonwage income, which includes interest and dividends.

A Form W-4, Employee’s Withholding Certificate, must be filed by each employee with their employer. All nonresidents in the U.S. who are from Peru and are working in the U.S. must claim “single” in Step 1c, regardless of marital status; write “Nonresident Alien” or “NRA” in the space under Step 4c of the form; and may not claim “exempt” in the space under Step 4c.

Nonresident alien employees may adjust withholding using Step 2b or 2c of the Form W-4; certain employees also may be able to use Steps 3, 4a, or 4b. More information about Form W-4 requirements for nonresident alien employees is available in the

Although the versions of Form W-4 issued in 2020 or later significantly differ from the versions issued in 2019 or earlier, nonresident employees that filed a valid version of Form W-4 from 2019 or earlier with their employer do not need to file another Form W-4 with the employer unless they need to implement a change for their withholding. On Forms W-4 issued in 2019 or earlier, nonresident alien employees were required to check the “single” box on line 3, regardless of marital status; write “Nonresident Alien” or “NRA” above the dotted line on line 6; and were not permitted to claim “exempt” on line 7 of the form.

An additional amount is added to a nonresident alien employee’s wages for calculating federal income tax withholding, with the amount based on pay period frequency and the date of the employee’s most recently filed Form W-4. The table of additional amounts applicable to Forms W-4 from 2020 or later and the table applicable to Forms W-4 issued before 2020 are available in the

Nonwage income and self-employed foreign workers can be subject to income tax withholding at a flat rate of 30%.

Additionally, foreign workers may be taxed differently based on the specific type of visa they hold.

Tax Treaties: Peru and the U.S. do not have a tax treaty.

Social Taxes: Most foreign workers are subject to paying into the U.S. Social Security system. Foreign nationals who are exempt from paying income tax and who do not have the eligibility to receive a social security number may not be required to pay social taxes. Foreign workers contributing to Social Security for a certain time period may be eligible to receive benefits.

Generally, foreign workers in the U.S. that have specific visas as exchange visitors or students or who are temporarily in the U.S. for agricultural work are not subject to social taxes on income that is obtained from the purpose in which they originally entered the U.S.

Totalization Agreements: Peru and the U.S. have not entered into a social tax totalization agreement.

Wage Payment: Under certain visas for certain types of employment, employers are required to pay foreign workers the higher of either the prevailing wage or the actual wage that is paid to U.S. workers that have similar skills and qualifications.

There are no particular requirements that employees be paid in U.S. dollars.

TREATY ARRANGEMENTS

Peru has entered into multiple income tax treaties, but has not entered into an income tax treaty with the United States. Peru does not have a totalization agreement with the United States for social tax coverage purposes.

The countries with which Peru has a bilateral income tax treaty in effect are Brazil, Canada, Chile, Japan, Mexico, Portugal, South Korea, and Switzerland.

A multilateral income tax treaty, the Andean Community double taxation avoidance treaty, is in effect for Peru and three other countries: Bolivia, Colombia, and Ecuador. Although text of this treaty references applicability to Venezuela and the treaty took effect in 2005, the treaty is not in effect for Venezuela because the country separated from the Andean Community in 2006.

Peru has totalization agreements for social tax purposes with more than 20 countries. The countries with which Peru has agreements are Andorra, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, France, Greece, Guatemala, Honduras, Italy, Mexico, Nicaragua, Panama, Paraguay, Peru, Portugal, Spain, and Uruguay.

RESOURCES

All resources are in English unless otherwise noted.

General

U.S. State Department:

• U.S. Relations With Peru
• International Travel Information: Peru

U.S. Central Intelligence Agency:

• The World Factbook: Peru
• The World Factbook: Languages

U.S. Library of Congress:

• Guide to Law Online: Peru
• Global Legal Monitor: Peru

U.S. Department of Commerce: Export.gov: Peru - Business Travel

Embassy of Peru in Washington, D.C.

Currency Details

Unicode Consortium: Currency Symbols

United Nations: United Nations Terminology Database: Peru

Taxes

Comptroller General of Peru

Superintendent of Banks, Insurance and Pension Fund Administrators (Spanish)

Peruvian Tax Authority (Spanish)

Peruvian Income Tax regulations (Spanish)

Legislative Decree No. 688 (Spanish)

Supreme Decree No. 392-2020-EF (Spanish)

Ministry of Economics and Finance (Spanish)

EsSalud (Social Security Health Insurance) (Spanish)

Ministry of Labor and Employment Promotion (Spanish)

The Administrative Committee of the Fund for the Construction of Housing and Recreational Centers (Spanish)

The National Training Service for the Construction Industry (Spanish)

Peruvian Tax Authority Resolution No. 350-2017 (Spanish)

SUNAT Resolution No. 16-2021 (Spanish) and Supreme Decree No. 002-2021-PCM (Spanish)

Compensation and Benefits

Ministry of Labor and Employment Promotion (Spanish):

• Supreme Decree No. 009-2019-TR (Spanish)
• Let’s Recover Formal Employment (Spanish)
• Supreme Decree No. 007-2021-TR (Spanish)

Law No, 27,735, on bonuses for workers (Spanish)

Law No. 31,334, on Covid-19 vaccine leave (Spanish)

Foreign Workers

Legislative Decree 689, on hiring foreign workers (Spanish)

National Superintendence of Migration

Working in the United States

U.S. Internal Revenue Service:

• IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens
• IRS Publication 15, Circular E, Employer’s Tax Guide
• IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
• IRS Publication 519, U.S. Tax Guide for Aliens
• IRS Publication 901, U.S. Tax Treaties

U.S. Labor Department, Foreign Labor Certification

Hiring Foreign Workers

Treaty Arrangements

Double Tax Agreements (Spanish)