Employing in Peru: a guide for international companies

Foreign companies usually arrive in Peru with a business plan, a budget and a hiring timeline. Peruvian employment law affects all three. The rules are protective, formal and calendar-driven: from the day the first employee starts, the company takes on registration duties, benefit accruals, record-keeping and termination restrictions that will shape the operation for years.

This guide is written for general managers, regional HR and finance leads, and in-house counsel responsible for a Peruvian entity or a planned market entry. It explains how the pieces of the system connect; where a topic deserves more depth, we point to the relevant guide or briefing.

Executive overview

Five features define employment in Peru for a foreign employer:

1. Employment is presumed indefinite. Fixed-term hiring is permitted only on specific statutory grounds.
2. There is no at-will termination. After probation, dismissal requires a just cause, a written procedure and proof; errors lead to severance or, in several scenarios, reinstatement.
3. Pay is more than salary. Statutory bonuses, a severance fund, paid leave, contributions, life insurance and, above 20 employees, profit sharing follow a fixed calendar.
4. Payroll is a regulated filing. Employees are registered electronically before they start and payroll is declared monthly.
5. Enforcement is active. SUNAFIL, Peru’s national labor inspection authority, can inspect without notice and fine per infringement and per affected worker.

The legal framework in brief

Constitutional foundations

The 1993 Constitution sets the baseline in articles 22 to 29: fair and sufficient pay with priority over other employer debts, a cap of eight hours a day or 48 a week, equal opportunity, the non-waivability of rights, “adequate protection against arbitrary dismissal”, union rights and a right to share in profits. Two principles matter every day. Non-waivability means an employee cannot validly give up statutory entitlements, even in a signed agreement. Protection against arbitrary dismissal (article 27) is the basis on which the Constitutional Court has built a line of case law allowing reinstatement, not just compensation, in certain dismissal scenarios.

The general private-sector regime

Most private employers are governed by the régimen laboral de la actividad privada — the general private-sector regime. Its core statute is the consolidated text of Legislative Decree 728, the Productivity and Labor Competitiveness Law (Supreme Decree 003-97-TR), with implementing regulations in Supreme Decree 001-96-TR. Around it sit separate statutes for each topic: working time (Supreme Decree 007-2002-TR), annual leave (Legislative Decree 713), the CTS severance fund (Supreme Decree 001-97-TR), statutory bonuses (Law 27735), profit sharing (Legislative Decree 892), social health insurance (Law 26790), occupational health and safety (Law 29783) and labor inspection (Law 28806).

The administrative authority is the MTPE (Ministerio de Trabajo y Promoción del Empleo, the Ministry of Labor and Employment Promotion), which registers certain contracts and approves filings. Enforcement sits with SUNAFIL.

A principle that runs through the whole system is the primacy of reality (primacía de la realidad): when the documents say one thing and the facts show another, the facts prevail. The labor inspectorate applies it expressly. A “consultant” who works fixed hours under a manager’s direction is an employee, whatever the contract says.

The MYPE caveat

Peru also has a special labor regime for micro and small enterprises (MYPE), currently governed by Supreme Decree 013-2013-PRODUCE, with reduced benefits and lower fines. Access depends on annual sales thresholds and requires registration in REMYPE, the MTPE’s registry of micro and small enterprises. A new MYPE law (Law 32353) was published in 2025 but only takes effect once its implementing regulations are issued, so its status should be confirmed before relying on either framework. This guide assumes the general regime; any plan to use the MYPE regime should be reviewed specifically.

Choosing how to engage people

The local employer

Peruvian payroll mechanics — electronic registration, monthly filings, social security contributions and withholdings — are built around a local employer. In practice, foreign groups employ through a Peruvian subsidiary or a registered branch. Which vehicle suits the business is a corporate and tax question to coordinate with those advisors before the first offer letter. From the employment side, what matters is that the employer entity exists, is registered and can file payroll from day one.

Outsourcing and staffing: useful, but limited

Groups sometimes expect to “start with contractors” or a local agency. Peruvian law allows two arrangements, each with strict limits:

• Outsourcing (tercerización, Law 29245 and Legislative Decree 1038): a contractor performs a specialized activity on its own account and risk, with its own resources, responsible for results and with exclusive control over its staff. If it merely supplies people who take the client’s instructions, the workers are treated as the client’s direct, indefinite employees. A 2022 regulation prohibiting outsourcing of the core business was declared null by the Supreme Court in a popular action (acción popular) proceeding; verify its status when structuring, but the autonomy requirements remain.
• Staffing or labor intermediation (intermediación laboral, Law 27626): a registered agency places its employees with a client. It is only allowed for temporary needs (occasional work or substitution), complementary activities unrelated to the core business such as cleaning or security, or highly specialized work. Workers placed for temporary services may not exceed 20% of the client’s workforce, and they are entitled to the client’s pay conditions.

Both routes carry joint liability for the client in defined circumstances, and neither substitutes for an employer entity when people will do the company’s permanent work under its direction. The outsourcing and staffing guide explains the tests.

Employment contracts

Indefinite employment is the default

Under article 4 of the Productivity and Labor Competitiveness Law, any personal, paid and subordinated service is presumed to be an indefinite-term employment contract. An indefinite contract can even be verbal, but a written one is strongly advisable. The basics of Peruvian employment contracts covers the elements, forms and drafting risks.

Fixed-term contracts need an objective cause

Fixed-term contracts (contratos sujetos a modalidad) are allowed only for the nine statutory types — for example, the start-up or increase of an activity (up to three years), market needs arising from temporary, non-cyclical demand (up to five years), occasional work, substitution of an absent employee, or a specific project or service. Each must be in writing, state its term and the objective cause that justifies it, and be filed with the labor authority within 15 calendar days. Taken together, successive fixed-term contracts may not exceed five years.

If the employee keeps working after the term expires, or the contract simulates a temporary need, it is treated as indefinite. Terminating a valid fixed-term contract early without cause gives rise to compensation of 1.5 monthly salaries for each month remaining, capped at 12. Our briefing on fixed-term employment contracts in Peru explains each type and the most common drafting mistakes.

Probation

The standard probationary period is three months. It can be extended in writing to a total of six months for qualified or trusted staff and up to one year for management personnel. During probation the employee is not yet protected against arbitrary dismissal — with an important recent exception: since Law 32431 (2025), a dismissal motivated by a cancer diagnosis is null even during probation.

Part-time, management and trusted roles

A part-time contract in Peru means an average of fewer than four hours a day. It must be written and registered, and it does not generate CTS, statutory annual leave or protection against arbitrary dismissal, although gratificaciones apply. Management (dirección) and trusted (confianza) positions are legal categories with their own procedure and consequences, including exclusion of management staff from maximum working hours. The employment contracts guide covers these categories in depth.

Payroll mechanics

Registration before day one

Peru’s electronic payroll (planilla electrónica, Supreme Decree 018-2007-TR) has two components:

• T-Registro, the employee registration database, where each new hire must be registered no later than the day he or she starts work.
• PLAME, the monthly payroll declaration, filed through SUNAT (the national tax administration), which reports pay, contributions and withholdings.

Late registration is a very serious infringement, counted per affected worker, so the local entity and its access to the filing platforms must be operational before the first start date.

Payslips and payment

The employer must deliver a payslip (boleta de pago) no later than the third business day after payment. Payslips and other employment documents may be delivered electronically with a digital or electronic signature. Since 2025, with the employee’s agreement, pay and benefits may also be paid into a digital wallet (Law 32413 and its regulations).

Statutory reference amounts are fixed in soles: the minimum wage (Remuneración Mínima Vital, RMV) is S/ 1,130 per month (Supreme Decree 006-2024-TR); an increase has been announced but still requires a supreme decree. The tax unit (Unidad Impositiva Tributaria, UIT), used to express fines and thresholds, is S/ 5,500 for 2026. The employer also withholds the employee’s income tax on employment income, which should be set up with tax advisors.

Who runs the payroll

The monthly calculation — gross-to-net, accruals, filings and payslips — is operational work, distinct from the legal decisions that feed it: what is paid, under which label and on what contract. In the Lynch group, Lynch Payroll executes the monthly payroll while Lynch Laboral advises on the decisions behind it. Whatever the model, someone must own the link between the legal design of pay and the numbers filed in PLAME.

Mandatory benefits

This is where budget surprises occur. The employee benefits guide covers calculation rules in detail.

Gratificaciones: the July and December bonuses

Gratificaciones are two statutory bonuses paid in the first half of July (national holidays) and December (Christmas). Each equals one full monthly salary if the employee worked the whole preceding semester, or one-sixth per full month worked. They are not subject to EsSalud or pension contributions; instead, the employer pays the employee an extraordinary bonus equal to 9% of the gratificación (6.75% if the employee is covered by a private health provider, EPS). They are subject to income tax. See gratificaciones, Peru’s July and December bonuses.

CTS: the severance fund

CTS (Compensación por Tiempo de Servicios) is a severance fund the employer deposits twice a year into a bank account chosen by the employee, within the first 15 calendar days of May and November. Each deposit equals one-twelfth of computable monthly pay (including one-sixth of the semester’s gratificación) per full month worked, for employees working at least four hours a day. A temporary law lets employees withdraw 100% of their CTS until 31 December 2026; employers must still deposit. Read CTS in Peru: the severance deposit explained.

Annual leave

Employees are entitled to 30 calendar days of paid annual leave for each full year of service, subject to a minimum attendance record. Leave can be split in defined blocks, advanced by written agreement, or partly reduced from 30 to 15 days against compensation. Leave not taken within the year following the year in which it was earned triggers the so-called triple pay: an additional indemnity of one monthly salary. See annual leave in Peru.

Family allowance

Employees with one or more minor children (or children up to 24 in higher education) receive a family allowance (asignación familiar) of 10% of the minimum wage — S/ 113 a month at the current RMV — unless a more favorable collective benefit applies.

Profit sharing

Companies generating business income with more than 20 employees must distribute a share of their annual pre-tax profit: 10% for fishing, telecommunications and industrial companies; 8% for mining, wholesale and retail trade, and restaurants; 5% for other activities. Half is distributed by days worked and half in proportion to pay, with an individual cap of 18 monthly salaries. It should be modeled once the business becomes profitable.

Life insurance and high-risk insurance

Vida Ley life insurance, paid by the employer, is mandatory from the first day of employment, and policies must be registered in the MTPE’s online registry. Companies carrying out high-risk activities listed in the regulations must also provide SCTR (Seguro Complementario de Trabajo de Riesgo), a supplementary occupational-risk insurance covering health and disability pensions.

Cost components at a glance

What to model per employee in the general regime. We deliberately avoid an all-in percentage: it depends on pay structure, headcount and activity.

Working time and overtime

Ordinary working time is capped at eight hours a day or 48 hours a week. Cumulative or atypical schedules — such as rotating rosters at remote sites — are allowed if the average over the cycle stays within the maximum. Management staff, employees not subject to immediate supervision and those providing intermittent waiting, watch or custody services are excluded from the cap.

Key rules:

• Meal break (refrigerio): at least 45 minutes, granted within the working day and, unless agreed otherwise, not counted as working time.
• Night work (10:00 p.m. to 6:00 a.m.): pay may not fall below the RMV plus 35%.
• Overtime is voluntary for both parties and paid at a premium of at least 25% for the first two hours and 35% thereafter; it can be offset with equivalent time off by agreement. Overtime imposed on an employee triggers an additional indemnity equal to 100% of the overtime value.
• Weekly rest: at least 24 consecutive hours, preferably on Sunday; work on a rest day or public holiday without substitute rest is paid with a 100% premium.
• Time records: employers must keep a permanent attendance record, including overtime, for employees not excluded from it.

Our briefing on maximum working hours in Peru explains the exemptions, and the working time guide covers schedules, overtime and control systems.

Leave

Beyond annual leave, specific statutes provide other leaves — for example, around maternity, paternity and family care. Their durations and conditions should be checked against current texts when drafting policies. Whatever the leave, record each absence and its legal basis in the attendance and payroll systems, and never treat a protected absence as grounds for adverse action.

Remote work is governed by the Telework Law (Law 31572), amended in 2024, and its regulations, amended in 2026. The arrangement is agreed in writing, the employer supplies equipment or compensates employee-provided resources, and employees have a right to at least 12 continuous hours of digital disconnection in each 24-hour period.

Termination

Just cause, procedure and proof

For employees working four or more hours a day, dismissal requires a just cause set out in the law and duly proven. Causes relate to capacity (for example, deficient performance measured against the employee’s capacity and average output) or to conduct, most commonly falta grave — serious misconduct listed in the statute, such as breach of good faith, appropriation of company property, violence or unjustified absences beyond statutory thresholds.

The procedure is formal. The employer must give the employee a written notice of charges and at least six calendar days to respond (30 days for capacity cases), then communicate the dismissal in writing, stating the precise cause and the termination date. The employer cannot later rely on a cause not stated in the letter, must act promptly once it knows the facts (the immediacy principle), and bears the burden of proving the cause in court.

Severance and reinstatement risk

A dismissal without a stated cause, or with a cause the employer cannot prove, is arbitrary. The statutory severance is 1.5 monthly salaries per full year of service, capped at 12 monthly salaries, with fractions prorated (probation is not counted).

Severance is not the only exposure. Constitutional Court case law allows reinstatement where a dismissal is made without cause (despido incausado) or on invented or fabricated grounds (despido fraudulento), and the statute itself orders reinstatement with back pay for null dismissals — those motivated by union activity, filing a complaint, discrimination, pregnancy (during pregnancy or up to 90 days after birth), HIV status, disability or, since 2025, a cancer diagnosis. An employee has 30 calendar days from the dismissal to bring a claim. Unfair dismissal is explained in detail in unfair dismissal in Peru: severance and reinstatement risk.

Other ways an employment relationship ends

An employee may resign with 30 days’ notice, which the employer may waive. The parties may also agree a mutual termination (mutuo disenso) in writing; when a role no longer fits, a genuinely voluntary, well-documented agreement is often the most predictable route. Collective dismissals follow a separate procedure before the labor authority. The termination guide walks through each route.

Social security and pensions

Health: EsSalud

EsSalud (Seguro Social de Salud) is the public health insurance system. It is funded by an employer contribution of 9% of the employee’s pay, with the minimum wage as the minimum monthly base. Employers may provide additional cover through a private health provider (EPS), which gives rise to a credit against the EsSalud contribution.

Pensions: ONP or AFP

Employees contribute to one of two systems, and the employer withholds and pays the contribution:

• the national pension system administered by the ONP, with an employee contribution of 13% of pensionable pay; or
• the private pension system administered by AFPs (private pension fund managers), with an employee contribution of 10% to the individual account plus an insurance premium and the AFP’s commission, which vary.

The pension system is in transition. Law 32123 (2024) creates an integrated multi-pillar system with progressive mandatory affiliation; its regulations (Supreme Decree 189-2025-EF) were amended in 2026 (Supreme Decree 061-2026-EF). Employers should expect to verify each new hire’s pension status at onboarding and to follow implementing rules as they are phased in, rather than relying on prior practice.

SUNAFIL and labor inspections

SUNAFIL enforces labor law under Law 28806 and its regulations (Supreme Decree 019-2006-TR). Inspections may start from a complaint, an internal decision, an order from another authority or the inspector’s own initiative. Inspectors may enter workplaces without notice, request documents, interview staff and summon the employer to appear with documentation.

Infringements are classified as minor, serious or very serious. Fines are calculated in UIT according to severity, the number of affected workers and the type of company; for a non-MYPE employer with one to ten affected workers, the 2026 fines are S/ 1,430 (minor), S/ 8,635 (serious) and S/ 14,465 (very serious) per infringement. Legal caps are 50, 100 and 200 UIT per infringement and 300 UIT for all infringements detected. Correcting an infringement before the inspector issues the infringement report reduces the proposed fine by 90%, and later correction still produces reductions. Obstructing an inspection — including failing to attend a summons — is itself an infringement.

Inspection readiness is a documentation exercise: registrations, contracts, payslips, time records, benefit deposits and safety records must be retrievable locally and quickly. The labor inspections guide explains each stage and how to respond.

Foreign employees

Legislative Decree 689 and its regulations (Supreme Decree 014-92-TR) govern the hiring of foreign nationals:

• Caps: foreign employees may not exceed 20% of the total workforce, and their pay may not exceed 30% of total payroll.
• Exemptions and equivalence: specialized professionals and technicians, among others, are exempt from the caps, and certain foreigners — such as those with a Peruvian spouse, parent, child or sibling, or an immigrant visa — are treated as nationals. Andean Community nationals receive special treatment whose scope should be confirmed case by case.
• Contract formalities: in writing, for a fixed term of up to three years, renewable, with a commitment to train local staff. It is filed through the MTPE’s online system and approved automatically, subject to later review.
• Immigration status: work may only start once the contract is approved and the employee holds a status that allows employment, such as worker resident (Residente Trabajador) under the Migration Law (Legislative Decree 1350).

The sequence matters: contract, approval, immigration status, then start date — and T-Registro registration no later than day one. For detail, see hiring foreign employees in Peru.

Other compliance thresholds to plan for

Several obligations are triggered by headcount and should be anticipated in the growth plan:

Pay equity rules (Law 30709) also require a table of job categories and functions and a pay policy based on objective criteria.

The first 90 days: a setup sequence

The sequence we recommend, once the corporate vehicle has been chosen with corporate and tax advisors:

1. Before any offer: confirm the employer entity and its access to T-Registro and PLAME; check whether the activity requires SCTR.
2. Define the workforce model: direct employees, genuinely outsourced services, and any staffing use within the permitted cases.
3. Choose each contract type: indefinite by default, fixed-term only with a documented objective cause; identify management and trusted positions.
4. Design pay: base, variable pay and allowances, deciding which items are remunerative; model benefits and contributions.
5. Sign contracts before the start date, including probation terms. For foreign hires, file the contract and secure immigration status first.
6. Register each employee in T-Registro by day one, with Vida Ley cover from that day, and verify pension affiliation.
7. File fixed-term contracts with the labor authority within 15 calendar days.
8. Set up time recording and leave scheduling for employees subject to working-hour limits.
9. Build health and safety and harassment-prevention basics: risk assessment, supervisor or committee, policy, complaint channels and onboarding training.
10. Load the compliance calendar and assign ownership: payroll filings, gratificaciones, CTS, leave and, later, profit sharing — see our annual employment compliance calendar — and decide who signs off on hires, pay changes, discipline and exits.

What management and regional HQ should do

A few decisions should never be taken centrally without Peruvian review:

• Terminations. Every exit, including of senior managers, needs a Peruvian route: just cause with procedure, mutual termination or the end of a valid fixed term.
• Global incentive plans. Bonuses, commissions and equity awards may affect the benefit base and withholding.
• Job titles. Management and trusted classifications carry legal consequences and must reflect reality.
• Contractors and shared services. Individuals or vendors working under local direction can be recharacterized as employees.
• Data and documentation. Keep the records SUNAFIL may request accessible in Peru, not only in a regional HR system.

As a professional recommendation, review the Peruvian entity’s employment position annually, so that problems surface internally rather than in an inspection or a transaction.

Frequent mistakes of foreign employers

• Letting employees start before T-Registro registration because “the entity is still being set up”.
• Using fixed-term contracts as a general probation tool, without a genuine objective cause, or letting them run past their term.
• Engaging long-term staff as independent service providers.
• Applying a home-country termination template, including “notice in lieu”, to a Peruvian employee.
• Budgeting only for base salary and missing gratificaciones, the extraordinary bonus, CTS and Vida Ley.
• Labeling regular payments as “non-remunerative”, which inspectors and courts can reclassify.
• Letting annual leave accumulate, which triggers the triple-pay indemnity.
• Keeping no attendance records for employees subject to working-hour limits.

How this guide connects to the rest of our resources

This page is the entry point. Each area has its own reference guide: employment contracts, termination, working time, employee benefits and labor inspections.

For the first hires, start with the contract basics and fixed-term contracts. If you are moving people into the country, read hiring foreign employees. To plan working patterns, see maximum working hours. To budget pay, read CTS, gratificaciones and annual leave, and load the dates from the compliance calendar. Before any exit, read unfair dismissal in Peru.

When you need hands-on help, our employment setup in Peru service builds the employment structure of a new operation, employment contract drafting covers the contract suite, and foreign employees handles the labor side of hiring non-Peruvian staff. If the operation is already running, the employment compliance check is a structured way to see where you stand.

Key takeaways

Employing in Peru is manageable when treated as a system. Indefinite employment by default, no at-will termination, a fixed benefit calendar and active inspection all reward the same discipline: decide the structure before the first hire, document it, register it on time and review it as the operation grows.