Peru’s mandatory benefits are generous by regional standards, and most of them are calculated as multiples or fractions of the employee’s pay. The CTS severance deposit, the two statutory bonuses in July and December, vacation pay and severance for dismissal all start from a pay base. If the base is wrong, every calculation built on it is wrong too, and the error repeats every semester.
That base is known as remuneración computable, literally “computable remuneration.” For finance teams modeling the cost of a Peruvian workforce, and for regional payroll centers processing it, understanding what goes into it is more important than memorizing the benefit formulas. This article explains the concept, with a worked example. It connects to our guide to working time and pay in Peru and to our overview of mandatory employee benefits in Peru.
Starting point: what Peruvian law calls remuneration
Article 6 of the Productivity and Competitiveness Law (the consolidated text of Legislative Decree 728) defines remuneration broadly: the full amount the employee receives for services, in cash or in kind, whatever its form or name, provided it is freely available to the employee. It also includes the main meal. Two consequences follow:
- Labels do not decide. Calling a payment an “allowance,” “incentive” or “reimbursement” does not change its nature. What matters is whether it is consideration for work and freely available.
- Exclusions are statutory. Article 7 refers to a closed set of items that are not remuneration for any legal purpose, listed in articles 19 and 20 of the CTS law. We examine them in remunerative and non-remunerative payments in Peru.
Three related bases
The concept of remuneration feeds several bases that overlap but are not identical:
| Benefit | Base used | Key rule |
|---|---|---|
| CTS severance deposit | Computable pay for CTS | Basic pay plus regular amounts and one-sixth of the gratificación received |
| Gratificaciones (July and December) | One monthly remuneration | Paid in full for a complete semester, proportionally otherwise |
| Vacation pay | Remuneration the employee would habitually and regularly receive | Paid before the leave begins |
| Severance for arbitrary dismissal | Ordinary monthly remuneration | 1.5 monthly salaries per full year, capped at 12 |
The CTS rules are the most detailed, and they are the reference most practitioners use to reason about the other bases. The remainder of this article focuses on them.
What goes into computable pay for CTS
Under articles 9 and 18 of the CTS law (D.S. 001-97-TR), computable pay includes:
- the basic salary;
- all amounts the employee regularly receives, in cash or in kind, as consideration for work, provided they are freely available;
- the main meal, where provided; and
- one-sixth of the gratificación received in the relevant semester (the July bonus for the November deposit and the December bonus for the May deposit).
Regularity is defined by articles 16 and 17: a payment is regular when the employee has received it in at least three months of each six-month period. Variable or imprecise amounts that meet that test are included through an average. Payments received less often fall outside the base for that period.
Key point
For CTS, the question is not whether a payment is “fixed” or “variable,” but whether it is freely available consideration for work and was received in at least three of the six months. Commissions, regular overtime and shift allowances often meet the test.
What stays out
Items listed in article 19 of the CTS law are excluded, including occasional extraordinary bonuses, statutory profit sharing, the cost or value of working conditions, the Christmas basket, commuting allowances conditioned on attendance that cover only travel, and a snack that does not constitute a main meal. The extraordinary bonus of 9% (or 6.75% where the employee has private health coverage through an EPS) that employers pay with the gratificaciones is expressly non-remunerative.
Worked example
Illustrative calculation (hypothetical figures): A commercial manager in Lima earns a basic salary of S/ 8,000 and receives the statutory family allowance of S/ 113. The company calculates the May CTS deposit, covering November to April.
- Commissions: received in November (S/ 1,200), January (S/ 900), February (S/ 1,500) and April (S/ 1,200). Four of six months, so they are regular. Total S/ 4,800; in this illustration the average is S/ 4,800 ÷ 6 = S/ 800.
- December gratificación actually received: S/ 8,900. One-sixth: S/ 1,483.33.
- A one-off recognition bonus of S/ 2,000 paid in March for a specific event: treated as an occasional extraordinary payment and excluded.
| Component | Amount |
|---|---|
| Basic salary | S/ 8,000.00 |
| Family allowance | S/ 113.00 |
| Regular commissions (average) | S/ 800.00 |
| One-sixth of December gratificación | S/ 1,483.33 |
| Computable pay | S/ 10,396.33 |
With six complete months worked, the deposit is six-twelfths of computable pay: S/ 5,198.17. Leaving out the commissions and the gratificación fraction, a common error when a global payroll system only reads the “base salary” field, would understate the deposit by about S/ 1,142 for this one employee in one semester. The deposit mechanics are covered in CTS in Peru: the severance deposit explained.
Watch out
Treating a one-off payment as “occasional” requires that it genuinely be occasional. A “spot bonus” paid every quarter to the same team, or a retention bonus paid on a fixed schedule, may be regular pay in substance.
The circular link between gratificaciones and CTS
The two benefits feed each other. The gratificación equals one monthly remuneration for a full semester, so any regular component missing from the monthly remuneration also shrinks the July or December bonus. One-sixth of that bonus then enters the next CTS deposit. An error in the base therefore surfaces twice: first in the bonus, then in the deposit that follows it. When a correction is made, both should be recalculated together, along with the extraordinary 9% bonus paid with the gratificación, which is calculated on the gratificación amount. The rules on payment dates, proportional bonuses and the extraordinary bonus are covered in gratificaciones: Peru’s July and December bonuses.
For budgeting, a useful rule of thumb is that each additional sol of regular monthly pay generates a further cost in both bonuses, in the CTS deposits and in the EsSalud employer contribution of 9%, so recurring components should always be modeled with their benefit load.
Global reward plans
International groups often pay components designed elsewhere: annual incentive plans, sales incentive plans with quarterly payouts, sign-on and retention bonuses, and equity awards. In Peru each needs its own analysis:
- Quarterly or monthly incentives frequently meet the three-in-six test and become computable.
- Annual bonuses raise more complex questions depending on how they are promised and how often they are paid; occasional extraordinary bonuses are excluded, but a contractual annual bonus should not be assumed to be.
- Retention and sign-on bonuses depend on their structure and conditions.
- Equity awards granted by a foreign parent raise separate questions about who pays and whether the employee has free disposal; they deserve specific advice before grant.
Because these plans are usually run from outside Peru, the local entity may not even know amounts were paid. Payroll should receive the data in time for the CTS, bonus and settlement calculations.
Shared-service payroll: mapping pay codes
When a regional center processes Peruvian payroll, the practical control is the pay-code map. Each code should state whether it is remuneration, whether it is computable for CTS, whether it enters the gratificación and vacation bases, and whether it is subject to EsSalud contributions. The map should be approved locally and reviewed whenever a new code is created. A provider such as Lynch Payroll can run the monthly calculation, but the classification decisions belong to the employer and its advisers.
Common mistakes
- Using base salary as the only input for CTS.
- Forgetting the one-sixth of the gratificación.
- Treating all variable pay as non-computable, or all of it as computable, without applying the three-in-six test.
- Labeling recurring payments as “one-off.”
- Leaving centrally paid incentives out of local benefit calculations.
- Applying the CTS base to severance without checking the ordinary monthly remuneration rule.
Checklist
- A pay-code map approved in Peru, with a computable/non-computable decision for each code.
- A semester review of variable items against the three-in-six test.
- A process to capture payments made by the parent company or other group entities.
- Documented reasoning for each item treated as non-remunerative.
- A reconciliation of CTS, gratificaciones and final settlements against the map; see final settlement on termination in Peru.
Key takeaways
Computable pay is the engine behind Peru’s mandatory benefits. It captures more than base salary: regular variable pay, amounts in kind and a fraction of the statutory bonus. It excludes a statutory list of items, which must be applied with discipline. For foreign employers, the main risk is structural: a global payroll design that reads only one field. Our statutory benefits review tests pay-code maps and benefit calculations against Peruvian rules and quantifies any gap before it grows.