Establish your presence globally with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Peru.
Overview
A sight for sore eyes, Peru offers a visual feast within the country. Vinicunca, also known as Montana de Sieta Colores or the Mountain of Seven Colors, is a mountain not tainted brown or green like the familiar mountains we pass but a vibrant array of rainbow colors across its expanse. The colors were only revealed in 2013 when the snow-covered mountains came uncovered due to the rise in temperatures, revealing the multicolored land beneath. Researchers say the colors were the result of the melting snow mixing with the various minerals below, resulting in the strikingly colored stripes.
The country has much more to offer than its surreal beauty, including a fast-growing economy and a rapidly growing talent pool.
Do your organization’s expansion plans require you to hire employees in Peru? Do you lack a physical entity in the country – a key requisite to hire local talent? Neeyamo assists organizations worldwide with onboarding and managing employees in Peru - processing payroll accounting and payroll software, managing local compliance requirements, benefits, and more.
Facts And Stats
Capital
Lima
Currency
Nuevo sol (PEN)
Official Language
Spanish
Fiscal Year
1 January - 31 December
Date Format
DD/MM/YYYY
Country Calling Code
+51
Other Languages
Quechua, Aymara
Time Zone
UTC (-05:00)
Global Payroll
Overview
Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity. The solution to this is using payroll management services like Neeyamo – International payroll providers.
Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll. Neeyamos Global Payroll Solutions eases the process for companies looking to outsource payroll services and aids them in maneuvering the tricky payroll system in Peru. Neeyamos payroll software provides the perfect solution for all your global payroll needs – for employees working in primary geographies, the long-tail region, remote or internationally located.
Payroll Taxes
Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.
Employee Taxes
Employees make the following tax contributions:
- Pension fund - 12.50% to 13.00%
- Total employee cost - 12.50% to 13.00%
The income tax slab in Peru is as follows:
| Upto 5 UIT | 8.00% |
| From 5 UIT to 20 UIT | 14.00% |
| From 20 UIT to 35 UIT | 17.00% |
| From 35 UIT to 45 UIT | 20.00% |
| More than 45 UIT | 30.00% |
Where 1 Tax Unit (UIT) = 4,600 PEN
Employer Taxes
The employer payroll contributions in Peru are as follows:
- 9.00% - Health Insurance
- 9.00% - Total Employment Cost
Payroll Cycle
Overview
Undoubtedly, payroll is a critical process for any organization. Pay cycle in Peru refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.
Frequency
In Peru, employees are paid monthly.
13th Month Cycle
In Peru, 13th- and 14th-month payments are required. Twice a year, around Christmas and at the end of the year around Independence Day in Peru, the employer is required to pay one additional month's wage.
Global Work
Overview
EOR: Meaning
An Employer of Record (EOR) service provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a local registered entity and a local bank account prior to making a job offer to an international hire.
An EOR service provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, book-keeping payroll services, and employee benefits, ensuring compliance with local tax laws and regulations.
This allows organizations to focus on collaborating with the employees in Peru for operational tasks, with the knowledge that they have a cost-effective solution to support their global business payroll & HR requirements as they continue their global expansion.
A company that provides EOR for Peru would be the best fit for companies looking to expand their global workforce. Neeyamos International payroll services has your go-to solution with our Global Payroll Technology stack, providing both managed payroll services with an automated payroll system as well as EOR services under one umbrella.
HR Mandates and Practices
Minimum Wage
The minimum wage in Peru is 1,025 PEN
Overtime
The employment contract and collective agreements govern any work that is performed in excess of the required number of hours per week and must be compensated as overtime. There are limits on the number of hours an employee may work when requested to work overtime or on a holiday.
All overtime hours that exceed 48 hours per week are compensated at a rate that is outlined in the employment contract and collective bargaining agreements.
For the first two hours of overtime, no less than 25% of the employee's total compensation may be paid.
For each consecutive hour of overtime, no less than 35% may be paid each hour.
Data Retention Policy
No specific provisions related to data retention applicable to data controllers exist in the Law and the Regulation.
The Regulation provides that data processors can keep for up to two years, the personal data provided by data controllers in a processing agreement framework.
Regulation of the Teleworking law
The Teleworking Law Regulation (Law 31572) was approved by Supreme Decree 002- 2023-TR on February 26, 2023.
Hiring and Onboarding Requirements
Hiring
Preference and discrimination:
Public entities are obliged to hire people with disabilities at a proportion of not less than 5 percent of their total staff, and private employers with more than 50 workers, at a proportion of not less than 3 percent.
Instead of at-will employment, contract work is the norm in Peru. In most cases, a firm cannot just terminate a worker whenever it wishes. Instead, contracts between employers and workers specify the duration of employment and the conditions under which any side may end the relationship.
Employment contracts are required in Peru - verbal or written. Written agreements are often preferred so that all parties are clear on their expectations. The majority of contracts have an indefinite length. Another option is a fixed-term contract, which can last up to five years. The agreement must be in writing, and the business must register it with the labor ministry.
Onboarding
Following are the documents that are required while onboarding an employee in Peru:
- Employee Personal Details
- Visa
Probation
In Peru, probation periods are outlined in the employment contract. Typically, the probational period lasts for three months.
The probationary period may be extended for skilled workers or employees in positions of trust to six months and one year for managerial roles.
Leave
Public Holiday
There are 13 public holidays in Peru:
- Jan 1: New Year's Day
- Apr 14: Maundy Thursday
- Apr 15: Good Friday
- May 1: Labour Day
- Jun 7: Flag Day
- Jun 29: Saint Peter and Saint Paul
- Jul 28: Independence Day
- Jul 29: Independence Day Holiday
- Aug. 30: Santa Rosa de Lima
- Oct 8: Battle of Angamos
- Nov 1: All Saints' Day
- Dec 8: Immaculate Conception Day
- Dec 9: Battle of Ayacucho
- Dec. 25: Christmas Day
Sick Leave
Employees in Peru are granted 365 days of paid sick leave. The first 20 days of an illness are paid for by the employer, and Social Security is responsible for covering the following 245 days.
Maternity Leave
Employees who are pregnant are entitled to 98 days of paid maternity leave, which includes 49 days before and 49 days after the birth of the child. The leave might be extended by 30 days in case of numerous or problematic deliveries.
Maternity leave is compensated by the Entities Promotoras de Salud (EPS) or the National Health System (EsSalud). The employee must have served three months of the required six months of employment in order to be eligible for maternity benefits.
Following the adoption of a child, mothers are also entitled to 30 days of paid adoption leave, up until the age of 12.
Paternity Leave
Following the birth of the child, the father or partner is entitled to 10 days of paid paternity leave.
In the event of a complex or early birth, the right increases to 20 days of leave.
Other Leave
Annual Leave:
Employees are entitled to paid yearly vacation of 30 days, which may be divided into two periods for 15 of those days. The remaining days must be taken in blocks of at least one day, except for public holidays. There is a right to 15 days of paid yearly leave for domestic employees.
Employees are not permitted to use their yearly leave in addition to any other type of leave, including maternity and sick leave.
Termination
Notice Period
An employee should receive at least six days of written notice to termination so that they can respond or prove their capability within the company. If an employee is resigning, they must provide an employer with at least 30 days’ notice.
Severance Pay
Severance pay is not usually granted in the case of separation due to their conduct of capacity; however, if an employee is dismissed without cause, severance pay of up to twelve months is often given.
Visa
Overview
The new TUPA (Texto Unico de Procedimientos Administrativos; Single Text of Administrative Procedures) procedure must be followed by a foreigner who wants to work in Peru.
The following are required to apply for a work visa in Peru:
- Interpol clearance - International Cancellation List
- Receipt for the money paid as an application fee
- Receipt showing the amount of the application cost paid to switch to a resident visa
- Passport
- Work contract that has been legally signed and authorized by the labor ministry, with a minimum period of 12 months.
- Police clearance certificate, criminal record check, and judicial matters check issued in the applicant's country of origin and if they had previously resided in another country before coming to Peru, in the country where they had spent the previous five years.
- SUNAT registration with RUC (Peruvian tax number) proving the employing company is active.
- Company registration of the employer's company showing the legal representative.
- Sworn declaration from the company's legal representative stating that he oversees employing personnel and explaining the necessity to hire a foreign national.
Employee Background Checks
Legal and Background Checks
The Constitutional Court has stated that requesting background checks on applicants and not hiring because of applicants’ backgrounds could qualify as discrimination.
Knowing too much about candidates' backgrounds may result in prejudice either directly or indirectly. Peruvian law forbids companies from conducting background checks on prospective employees in order to keep discriminatory practices out of the employment process.
Last updated on September 5, 2023
If you have any queries or suggestions, reach out to us at irene.jones@neeyamo.com