Every exit in Peru ends with the same document: the liquidación de beneficios sociales, the final settlement of the employee’s accrued statutory benefits. It is owed whether the employee resigns, the parties agree to part ways, a fixed-term contract expires or the company dismisses. For international groups, the settlement is often where earlier compliance gaps become visible, because every pending leave period, underpaid CTS deposit or miscalculated bonus has to be closed out in a single payment.
This article sets out what the settlement contains, how each item is calculated in general terms, which extra items depend on the cause of termination and where companies managed from abroad tend to make mistakes. It forms part of our guide to mandatory employee benefits in Peru.
What the settlement must include
| Item | When it applies | General basis |
|---|---|---|
| Pending remuneration | Always, for days worked and not yet paid | Salary and other remuneration for the final period |
| CTS accrued since last deposit | Employees covered by CTS | Same logic as the semi-annual deposits, for the months and days since the last one |
| Pro-rated gratificación (gratificación trunca) | At least one full month worked in the semester | One-sixth of a month’s remuneration per full month in the semester |
| Pending annual leave | Complete leave periods not yet taken | One month’s remuneration per 30-day period |
| Pro-rated annual leave (vacaciones truncas) | At least one month of service in the incomplete year | One-twelfth per full month and one-thirtieth per day |
| Indemnity for leave not taken on time | Periods that passed their deadline | One additional month’s remuneration per period |
Profit sharing, where the company is required to distribute it, follows its own annual calendar and rules, and a departing employee’s share for days worked in the relevant year should be tracked so that it is paid when due.
Key point
The settlement is not a severance package. It is the closing account of benefits the employee has already earned, and it is owed on every exit. Severance for dismissal, where it applies, is a separate item added on top.
Items that depend on the cause of termination
The Productivity and Labor Competitiveness Law lists the causes of termination, and the cause determines whether extra amounts are owed:
- Resignation. The employee must give 30 days’ notice, which the employer may waive. No indemnity is owed; the settlement covers accrued benefits.
- Mutual agreement (mutuo disenso). It must be recorded in writing or in the settlement document itself. Any exit incentive is a matter of negotiation, as discussed in our article on resignation, mutual termination and dismissal in Peru.
- Dismissal without a valid cause, or a cause that cannot be proven. The employer owes an indemnity of 1.5 monthly remunerations per full year of service, capped at 12 monthly remunerations, with fractions of a year paid proportionally and the probationary period excluded. Case law also opens the door to reinstatement in certain situations, which changes the risk analysis.
- Early termination of a fixed-term contract without cause. The indemnity is 1.5 monthly remunerations for each month remaining until the contract’s end date, capped at 12.
- Expiry of a fixed-term contract. If the contract was valid and ends on its date, only accrued benefits are owed. If it was not valid, the relationship may be treated as indefinite, and the exit as a dismissal.
Illustrative scenario and calculation
Illustrative scenario
Illustrative scenario (hypothetical figures): A marketing analyst with a fixed monthly salary of S/ 8,000 joined a technology subsidiary on 1 March 2022 and resigns effective 31 August 2026, with the notice period duly served. The employee took all leave for earlier years, except the period earned on 1 March 2026, which is still pending and within its deadline. The July 2026 gratificación and the May 2026 CTS deposit were paid on time. August salary has not yet been paid.
| Item | Basis in this scenario | Illustrative amount |
|---|---|---|
| August salary | Full month | S/ 8,000.00 |
| Pending leave (period earned March 2026) | 30 days, within deadline | S/ 8,000.00 |
| Pro-rated leave (March to August 2026) | 6/12 × S/ 8,000 | S/ 4,000.00 |
| Pro-rated gratificación (July and August 2026) | 2/6 × S/ 8,000 | S/ 2,666.67 |
| CTS since last deposit (May to August 2026) | 4/12 × (S/ 8,000 + 1/6 of July gratificación) | approx. S/ 3,111.11 |
| Illustrative total before withholdings | approx. S/ 25,777.78 |
If, instead of resigning, the same employee had been dismissed without a valid cause, the company would add the indemnity for unfair dismissal: 1.5 monthly salaries per year of service, excluding the probationary period and pro-rating fractions, subject to the cap of 12 monthly salaries. In this scenario that addition would be several times larger than the whole statutory settlement. The figures are hypothetical and meant to show the structure, not to replace an individual calculation, which must reflect variable pay, withholdings and the employee’s actual history.
The CTS certificate and other exit steps
Within 48 hours of termination, the employer must give the employee the certificate of termination that allows them to withdraw CTS funds from their bank. The settlement document should itemize each amount, so that the employee, and any later reviewer, can see what was paid and why. The exit must also be reported in the electronic payroll registry within the applicable deadline, and the final payslip issued in the usual way.
The law requires the settlement to be paid promptly after termination. As a preventive criterion, we recommend having the calculation ready on the last day of employment, so that payment does not depend on month-end payroll runs or approvals from abroad.
Watch out
Holding back the final settlement until the employee signs a release, returns equipment or accepts a separation agreement is risky. Statutory benefits are owed regardless, and retaining them can turn a routine exit into a claim.
Where international groups get it wrong
- Global separation templates. Packages drafted at headquarters often express a single “severance amount” in exchange for a broad release. In Peru, statutory items should be calculated and shown separately, and the incentive identified as such.
- Leave balances from the global HRIS. The system may show a balance in working days, or none at all, while the Peruvian record shows pending and expired periods. The settlement must follow the Peruvian record; see our article on accrued unused leave and the triple-pay rule.
- Underpaid CTS base. If earlier deposits excluded regular variable pay, the gap tends to be claimed at exit. Our article on the CTS severance deposit explains the base.
- Forgetting the pro-rated bonus. Leavers who worked at least one full month in the semester are entitled to it; the rules are in our article on gratificaciones.
- Late payment driven by approvals abroad. Treasury approval chains built for monthly payroll are too slow for exits.
Consequences
An incomplete settlement leaves the unpaid amounts owed, and employees commonly pursue them in labor claims after exit. Non-payment of statutory benefits may also be examined by SUNAFIL, Peru’s national labor inspection authority, with fines scaled by company size and number of employees affected. In a dismissal, a weak settlement process can compound the exposure, because the employee may challenge both the payments and the dismissal itself.
Checklist before paying
- Confirm the cause and date of termination, and that it is properly documented.
- Pull the Peruvian leave record, not only the global HR balance.
- Recalculate CTS since the last deposit using the correct computable base.
- Compute the pro-rated gratificación by full months in the semester.
- Check for expired leave periods and add the indemnity where applicable.
- Add dismissal indemnity or exit incentive if relevant, itemized separately.
- Prepare the itemized settlement and the CTS certificate.
- Report the exit in the payroll registry and issue the final payslip.
Where payroll is run by an external provider such as Lynch Payroll, the provider can execute the calculation, but the company must supply the legal inputs: the cause of termination, the leave history and any agreed incentive.
Preventive recommendations
As a preventive criterion, we recommend a standard Peruvian exit file, owned locally, that produces the settlement on the last working day, and a legal review of any separation agreement drafted abroad before it is offered. Our statutory benefits review includes the settlement template, the exit checklist and a check of historical calculations that could resurface at termination.
Bottom line
A clean final settlement is the last opportunity to close an employment relationship without residual liability. It depends on everything that came before: leave records, CTS bases and bonus calculations. Companies that keep those items accurate during employment find that the settlement is a formality; companies that do not find that it is where the bill arrives.