Hire in Peru

Important Facts About the Country of Peru

Introduction to Peru

Peru, a sovereign nation in Latin America (LATAM), operates as a representative democratic republic and is comprised of 25 regions. Renowned for its economic strength, Peru boasts an impressive average annual GDP growth rate of 5.9%. It aligns with The Pacific Pumas, a collective of nations along LATAM’s Pacific coast characterized by robust growth, stable macroeconomic structures, enhanced governance, and a commitment to global trade integration.

What to Know about Peru’s Geography

To the north, Peru shares borders with Ecuador and Colombia, while Brazil lies to its east, and Bolivia to the southeast. Its southern boundaries are marked by Chile, and the Pacific Ocean surrounds it to the south and west. Ranking as the third largest nation in South America, Peru spans 1.28 million square kilometers.

Climate in Peru

Although primarily tropical, Peru’s geography yields a remarkable array of climates. While its northern reaches nearly intersect with the Equator, the nation experiences diverse weather patterns due to a blend of tropical latitude, mountainous terrain, topographical nuances, and the influence of two significant ocean currents, the Humboldt and El Niño.

The Culture of Peru

The foundation of Peruvian culture stems from a blend of Amerindian and European traditions, notably shaped by Spanish colonial dominance from the mid-16th century until 1824. Additionally, the cultural landscape has been enriched by influences from diverse Asian and African ethnic groups.

Religions Observed in Per

For centuries, Roman Catholicism has held sway as the dominant faith in Peru and remains its official religion, with 76% of the population adhering to this faith. Furthermore, 14.1% identify as Evangelical, 4.8% as Protestant, Jewish, Latter-day Saints, or Jehovah’s Witnesses, while 5.1% classify themselves as non-religious.

Languages Spoken in Peru

The official language of Peru is Spanish, spoken by around 84% of the population. Additionally, a notable portion of Peruvians communicate in Quechua languages, Aymara, or other indigenous languages.

Peruvian Human Resources at a Glance

Employment Law Protections in Peru

Peruvian laws safeguard the rights of the country’s workforce, which comprises 16.1 million individuals. These protections are delineated in the 1993 Constitution, the 2002 labor code ratification, and various international labor agreements to which Peru is a party.

Employment Contracts in Peru

Peru’s labor laws outline regulations for various types of employment contracts:

1. Indefinite-term employment contract: As per Article 4 of Supreme Decree No. 003-97-TR, an employment relationship with no fixed duration is presumed when services are provided in exchange for compensation. In this subordinated relationship, the employer is the party receiving services. While not mandatory, it’s common for parties to formalize roles and responsibilities in writing.

2. Fixed-term employment contract: This contract, intended for a specified duration, must be documented in writing. It can last up to five years, within the maximum terms set for different types of fixed-term contracts. However, this type of agreement should be the exception rather than the rule. The contract should specify:

• Duration and objective
• Reasons for the fixed term, such as replacement or emergency
• Job specifications
• Whether it’s seasonal work

3. Part-time employment contract: If an employee works less than four hours per day or 24 hours per week, the terms must be documented in writing. Without a written agreement, the arrangement defaults to an indefinite-term, full-time contract.

Tax and Social Security Information for Employers in Peru

Personal Income Tax in Peru

Peru’s tax year aligns with the calendar year, and income taxes must be declared within three months following the end of the tax year. The SUNAT (Superintendencia Nacional de Administración Tributaria) oversees the collection of income tax in Peru.

As of 2024, a Tax Unit (UIT: Unidad Impositiva Tributaria), used as a reference unit for tax computation and penalties, equals 5,150 Peruvian soles (PEN). The initial seven tax units are exempt from taxes.

Social Security in Peru

Peruvian employment laws grant every employee the entitlement to participate in either the National Pension Scheme or the Private Pension System. The standard contribution rate for both systems is 13%, typically covered by the employer and deducted directly from the employee’s salary for deposit into the scheme.

Employee Contributions:

• 13%: National Pension Fund
• Employees also have the option to select a private pension fund.

Employer Contributions:

• Health Insurance (public or private): 9%
• Unemployment Insurance or CTS (Compensación por Tiempo de Servicio): This social benefit provides employees with income in case of termination. CTS is deposited biannually by the employer, with 50% in May for work done from November to April and 50% in November for work done from May to October. CTS accrues from the beginning of the employee-employer relationship, with entitlement to employees who work at least four hours a day, amounting to one month’s average wages per year.
• Life Insurance (0.5%)

Employees can choose to join either the National Pension System (SNP) or the Private Pension System (SPP). The SNP & SPP contribution rate, approximately 13%, is covered by the employer, deducted from the employee’s salary, and then paid directly to the pension administrator.

Peru’s decentralized healthcare system is managed by five entities:

• Ministry of Health (MINSA), serving 60% of the population
• EsSalud, covering 30% of the population
• Armed Forces (FFAA)
• National Police (PNP)
• The private sector, catering to the remaining 10% of the population.

*The provided rates are indicative and may vary depending on GoGlobal’s specific terms.

Benefits to the Employee in Peru

Peruvian Statutory Benefits

Healthcare Insurance

Under Peru’s employment regulations, employees and their family members are entitled to benefits through the public health service, ESSALUD, with family members considered statutory affiliates. Employers contribute 9% of the employee’s monthly wage towards health insurance to the public healthcare system.

13th and 14th Salary Payments

Peru mandates 13th and 14th salary payments, disbursed in two installments. These payments must be made no later than July 15th and December 15th, respectively, as additional payroll. Together, they amount to two monthly remunerations. Each installment is calculated based on the average salary of the preceding six months, inclusive of bonuses and commissions but excluding health or pension contributions.

These payments are required only for employees who are actively working in the month of receipt or are on paid leave. Employees with less than six months of service receive prorated entitlements based on months worked.

Family Allowance

Employees responsible for one or more children under 18 years old (or of legal age attending higher education) are entitled to a family allowance equivalent to 10% of the current minimum wage.

Compensation for Time of Services (CTS)

CTS payments, equivalent to ordinary remuneration, are deposited by employers into the financial institution chosen by the employee within the first fifteen calendar days of May (50%) and November (50%) each year. CTS, often referred to as a “settlement payment” or “retirement payment” in other jurisdictions, is a common practice in Peru.

Rules Regarding Visas and Foreign Workers in Peru

General Information

Employers are restricted to having no more than 20% of their local workforce composed of foreign employees, and the total salary paid to foreign employees cannot exceed 30% of the overall compensation paid to all employees. However, certain technical employees may be exempt from this regulation.

Contracts for foreign employees must be documented in writing and are typically issued for a duration of three years, with the possibility of extension for an additional three years. Extension approvals must be obtained from the Ministry of Labor.

Upon approval by the Ministry of Labor, changes to the employee’s immigration status can be made, transitioning from a tourist or business visa to a work visa. This work visa enables the issuance of a Foreign Card.

The main types of work visas include:

• Work visas for employees of local companies (resident/temporary employees)
• Work visas for employees of foreign companies who are not permanent residents in Peru but are assigned to provide services for a specified period.

For tax purposes, foreign individuals are considered domiciled in Peru if they have spent more than 183 calendar days within a 12-month period in the country.