Peru
Min. wage
(x14 payments)
S/1,130 /mo
About the minimum wage
Employer tax
Annual leave
30 days
Learn about annual leave
Notice period
No statutory minimum
Termination and notice info
Updated
Sep 2026
The default and preferred form of employment in Peru (contrato a plazo indeterminado). It can be verbal or written, has no fixed end date, and can only be terminated by the employer for just cause defined by law (misconduct or incapacity) or by mutual agreement/resignation. Employees gain increasing protection against dismissal the longer they are employed, and unjustified termination triggers statutory severance (indemnización por despido arbitrario).
Fixed-term contracts (contratos sujetos a modalidad) require a written contract stating a specific, real, and temporary objective cause (e.g., start-up/launch of new activity up to 3 years, market/production needs up to 5 years, business restructuring up to 2 years, occasional work up to 6 months/year, seasonal work, or replacement of an absent worker for the duration of the absence). Total accumulated fixed-term engagements with the same employer generally cannot exceed 5 years. If the cause is missing, invalid, or time limits are exceeded, or the employee continues working after expiry without a new contract, the relationship is automatically "denaturalized" into an indefinite contract with full retroactive protections.
The statutory maximum ordinary working day is 8 hours and the workweek is capped at 48 hours. Overtime is voluntary and must be paid at a premium: at least +25% of the hourly rate for the first 2 overtime hours and +35% for each additional hour (or as agreed if higher). A weekly rest day (at least 24 consecutive hours) is mandatory, and night-shift work (10pm–6am) carries an additional pay differential (at least the RMV plus a surcharge).
During the probationary period, employees receive full salary, benefits, and social security coverage from day one, but the employer may terminate the relationship without cause and without owing severance (indemnización) or triggering unjustified-dismissal protections, provided the dismissal is not discriminatory or otherwise unlawful. Standard workers have a 3-month trial period; this can be extended by written agreement to up to 6 months for workers requiring specialized skills/qualifications, and up to 12 months for management-level or positions of trust.
Peru mandates two extra full-month salary payments per year called Gratificaciones: one in the first half of July (Fiestas Patrias) and one in the first half of December (Navidad), each equal to one month's regular remuneration (pro-rated for partial years/service). Under Law 30334, employers also pay employees an extra amount equivalent to the 9% EsSalud contribution on each gratificación directly, since that amount is exempt from EsSalud/pension withholding. Separately, employers must fund CTS (Compensación por Tiempo de Servicios) — a job-security savings account deposited into a bank chosen by the employee — equal to roughly one month's salary per year of service, split into two deposits (in May, covering Nov–Apr, and in November, covering May–Oct). Combined, Gratificaciones (~2 extra months) and CTS (~1 extra month) add up to roughly 3 extra months of statutory pay per year on top of the 12 regular monthly salaries.
Peru has no centralized statutory job-title registry, but employers must classify workers accurately (e.g., blue-collar/"obrero" vs white-collar/"empleado", and management/trust positions vs standard staff) since this classification affects probation length, overtime eligibility, and CTS/gratificación calculations. Under the Equal Pay Law (Ley N° 30709) and its regulations, employers must maintain objective, non-discriminatory job categories and salary bands and be able to justify pay differences between employees performing equal or substantially similar roles.
EsSalud (public health insurance): 9% of gross monthly salary, paid entirely by the employer with no employee deduction — this is the only universal statutory employer social contribution and is the figure used here. Additionally: SCTR (Seguro Complementario de Trabajo de Riesgo), roughly 0.53%–1.84%+ of salary, is only mandatory for employees in designated high-risk activities (mining, construction, heavy industry, etc.) and does not apply to standard office-based roles. After 4 years of continuous service, employers must also arrange Seguro de Vida Ley (mandatory life insurance) through a private insurer; its cost is not a fixed statutory percentage and varies by provider/coverage. Employers additionally fund Gratificaciones and CTS (see thirteenth_fourteenth_salary fields) and, for larger companies, statutory profit-sharing (5%–10% of pre-tax profit depending on sector) — none of these are included in the 9% figure above.
Employees must contribute to a pension system, choosing between the public ONP (Oficina de Normalización Previsional, pay-as-you-go) system or a private AFP (Administradora de Fondos de Pensiones, individual capitalization) account — the choice is made once and is largely irrevocable. ONP: a flat 13% of gross salary, withheld and remitted by the employer. AFP: approximately 10% to the individual pension fund + ~1.74% for disability/survivorship insurance + ~1.5%–1.7% AFP management commission (flow-based, varies by provider), totaling roughly 13.2%–13.4% of gross salary. No separate employee EsSalud/health contribution applies (health insurance is fully employer-funded). A representative average of ~13% of gross salary is used here, reflecting either system.
In addition to statutory leave, employees are entitled to the following statutory benefits:
Peru's social security system combines a universal employer-paid health contribution with an employee-chosen pension scheme.
Workplace risk coverage in Peru is provided through SCTR (Seguro Complementario de Trabajo de Riesgo), which is mandatory only for employees performing designated high-risk activities.
Peru uses two separate, cumulative mechanisms that function like severance:
Peru mandates statutory extra-month bonuses on top of the 12 regular monthly salaries:
P.S. our team speaks multiple languages and we'd love to chat in your preferred language if requested.
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. RemoFirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
