Employer of Record in Peru

An Employer of Record (EOR) in Peru acts as the legal employer, handling payroll, tax, and compliance on behalf of the client company.

Local hiring involves CTS deposits, Gratificación bonuses, EsSalud contributions, and mandatory profit-sharing rules. Each obligation carries its own filing schedule and penalty regime, making compliance difficult without a local partner.

• EOR hiring typically takes 1 to 2 weeks, compared to months for entity setup.
• Employer EsSalud contribution rate: 9% of gross salary.
• Standard employee notice period: 30 days.
• Mandatory Gratificación bonuses equal two months' salary per year, paid in July and December.

This page covers hiring options, employment law, payroll, benefits, termination rules, and how to choose an EOR in Peru.

Gloroots is an EOR provider operating in Peru. This guide is written to help readers find the right hiring path for their situation, not only to promote Gloroots as a solution.

What Is an Employer of Record in Peru?

An EOR becomes the legal employer on record in Peru, signing employment contracts, running payroll, and remitting statutory contributions under Peruvian law on behalf of the client company.

Foreign companies hiring Peruvian talent without a registered local entity are the primary users of this model.

The workflow runs as follows: the client selects the candidate; the EOR issues a compliant contract under Legislative Decree 728; the EOR manages payroll, EsSalud contributions, CTS deposits, Gratificación bonuses, and day-to-day HR administration; and the client directs the work. For a deeper look at the model, see how does EOR work.

Your Hiring Options in Peru: EOR vs. Entity vs. PEO vs. Contractor

Four paths exist for hiring in Peru: registering a local entity, using a Professional Employer Organization (PEO), engaging an Employer of Record, or contracting independent workers. Each path carries different compliance ownership, cost structure, and time-to-hire profiles.

Entity setup suits companies making a long-term commitment with significant headcount in Peru.

An EOR suits rapid market entry, small headcount, or market testing before a full entity commitment. Gloroots EOR services cover employment contracts, payroll, and statutory filings without requiring a local entity.

A PEO in Peru requires the client to hold a registered local entity. An EOR does not.

Path	Setup Time	Compliance Ownership	Cost Structure	Best For
Local Entity	3 to 6 months	Client	High fixed cost	Long-term, large headcount
PEO	2 to 4 weeks	Shared (client holds entity)	Per-employee fee plus entity costs	Companies with an existing Peru entity
EOR	1 to 2 weeks	EOR provider	Per-employee monthly fee	Fast entry, small or test headcount
Independent Contractor	Days	Contractor	Contract rate only	Project-based, non-core work

How to Hire in Peru Through an EOR: Step by Step

Hiring in Peru through an EOR follows six steps, from the initial decision on hiring structure through to offboarding. The steps below cover each stage in order, with the actions your team owns and the actions the EOR executes on your behalf.

Step 1: Decide Between EOR and Entity

Assess your headcount, timeline, and long-term commitment in Peru. Choose an EOR if you are hiring fewer than approximately 10 employees or need to place workers within weeks rather than months.

Step 2: Select and Vet an EOR Provider

Verify that the EOR holds or partners with a registered entity in Peru, has local legal expertise, and can manage CTS deposits, Gratificación bonuses, and EsSalud contributions accurately and on schedule.

Step 3: Draft a Compliant Employment Contract

The EOR issues a written contract under Legislative Decree 728, covering the role, salary in PEN, working hours, probation period, and termination notice requirements.

Step 4: Onboard and Register Statutory Requirements

The EOR registers the employee with EsSalud, enrolls them in ONP or AFP pension, opens a CTS savings account, and activates Vida Ley life insurance from day one.

Step 5: Run Compliant Monthly Payroll

The EOR processes monthly payroll in PEN, remits EsSalud at 9%, withholds income tax per progressive brackets, deposits CTS in May and November, and pays Gratificación in July and December.

Step 6: Manage Offboarding and Exit

The EOR issues written termination notice of 6 to 30 days depending on grounds, calculates any applicable indemnity, processes the final CTS withdrawal, and issues required exit documentation.

How to Choose the Right EOR in Peru

Selecting an EOR in Peru requires evaluating six criteria that directly affect compliance, payroll accuracy, and employment governance. Use these criteria to assess any provider before signing a contract.

Not every EOR operating in Peru has equal depth in local labor law. Some handle payroll mechanics but lack the legal expertise to manage terminations, profit-sharing obligations, or CTS disputes correctly. Gaps in any of these areas create direct liability for your business.

Gloroots applies local execution with centralized governance, giving your team visibility across every employment obligation in Peru. For a broader comparison of providers, see our guide on the best employer of record options available today.

Local Legal Knowledge

Verify that the EOR has demonstrated expertise in Legislative Decree 728, CTS regulations, Gratificación rules, and profit-sharing obligations for employers with 20 or more employees.

Own Entity vs. Partner Network

Confirm whether the EOR holds a registered legal entity in Peru or relies on a third-party partner. A proprietary entity means faster onboarding and clearer accountability when issues arise.

Support Model

Verify whether the EOR assigns a dedicated local HR contact in Peru or routes all queries through a global support queue. Dedicated contacts reduce resolution time and improve compliance accuracy.

Pricing Transparency

Request a full cost breakdown before signing: EOR fee, EsSalud (9%), CTS, Gratificación, and profit-sharing contributions. Gloroots publishes predictable, country-specific pricing so total employer cost is visible upfront.

Data Security and Compliance

Verify that the EOR complies with Peru's Personal Data Protection Law (Law 29733), covering employee data handling and background check consent. Non-compliance exposes employers to regulatory penalties and employee claims.

Platform and Integration Capability

Assess whether the EOR's platform connects with your existing HRIS or payroll tools and provides real-time visibility into payroll runs and statutory filings in Peru. Integration gaps create reporting delays and governance risk.

Workforce and Talent Pool in Peru

Peru has a working-age population of approximately 23 million, with labor force participation concentrated in Lima and other urban centers across the country.

Key talent hubs include Lima, Arequipa, and Trujillo, with strong output in mining, technology, BPO, agriculture, and financial services.

Work culture in Peru is hierarchical but relationship-driven. Spanish is the primary business language, though English proficiency is growing in technology and BPO sectors. Salary costs remain competitive relative to other Latin American markets, including those covered by employer of record Colombia.

Metric	Detail
Workforce Size	~23 million working-age population
Median Age	30.6 years
English Proficiency	Growing in tech and BPO sectors
Top Talent Hubs	Lima, Arequipa, Trujillo
Key Industries	Mining, Technology, BPO, Agriculture, Financial Services

Employment Law Essentials in Peru

Peru's employment framework is governed by the Unified Text of Legislative Decree No. 728, the Labor Productivity and Competitiveness Law (LPCL). This law sets the rules for hiring, contracts, working hours, wages, and termination across the private sector.

The sections below cover the core legal requirements employers must meet when hiring in Peru.

Employment Contracts

Under Legislative Decree 728, indefinite contracts may be oral or written. Fixed-term and part-time contracts must be in writing and must state the reason for the fixed term. Fixed-term contracts may not exceed five years.

Working Hours and Overtime

The legal cap is 8 hours per day and 48 hours per week. The first two overtime hours are paid at a minimum 25% surcharge; subsequent hours at 35%. Managers, supervisors, and non-supervised workers are exempt from the overtime cap.

Minimum Wage

The legal minimum wage in Peru is 1,025 PEN per month. This rate applies to all private-sector workers. The minimum wage is set by government decree and is subject to periodic review; employers must monitor official updates to stay compliant.

Leave and Statutory Benefits in Peru

Peru law sets specific entitlements for annual leave, maternity, paternity, and sick leave. Employers are also required to pay two statutory bonuses (Gratificaciones) and contribute to a severance fund (CTS) each year.

Annual Leave

Employees earn 30 calendar days of paid annual leave after one year of service. Unused leave carries forward for up to two years. Under DS 002-2019-TR, leave can be split into minimum one-day periods by mutual agreement, or into 15-day blocks at the employee's written request.

Sick Leave

Employees receive up to 365 days of paid sick leave. The employer pays full salary for the first 20 days and can seek reimbursement from EsSalud for the employer-paid portion thereafter.

Maternity and Paternity Leave

Maternity leave is 98 days, paid by EsSalud. Paternity leave is 10 calendar days, paid by the employer. This extends to 20 days for premature or multiple births and 30 days when the birth involves severe disability or terminal illness.

Public Holidays

Peru observes 15 statutory public holidays each year.

• January 1: New Year's Day
• March/April: Maundy Thursday
• March/April: Good Friday
• May 1: Labour Day
• June 29: Saints Peter and Paul
• July 28: Independence Day
• July 29: Independence Day (second day)
• August 30: Santa Rosa de Lima
• October 8: Battle of Angamos
• November 1: All Saints' Day
• December 8: Immaculate Conception
• December 9: Battle of Ayacucho
• December 24: Christmas Eve
• December 25: Christmas Day
• December 31: New Year's Eve

Payroll, Tax and Statutory Contributions in Peru

Payroll in Peru runs monthly. Employers pay employees in Peruvian soles (PEN) on the last working day of each month.

CTS (Compensación por Tiempo de Servicios) deposits are due by May 15 and November 15 each year. Late deposits attract penalties and interest under Peruvian labor law, making these deadlines a high-risk compliance point for foreign employers.

The following mandatory employer obligations apply in Peru:

• Gratificación: Two mandatory bonuses per year, paid in July and December, each equal to one month's salary.
• CTS: Approximately 1.16 months' salary per year, deposited in two equal tranches by the May and November deadlines.
• Profit sharing: Employers with more than 20 employees must distribute a percentage of pre-tax profits to employees. The applicable percentage varies by industry.
• Vida Ley life insurance: A mandatory employer-funded life insurance policy that applies from the employee's first day of work.
• EsSalud (health insurance): Employer contributes 9% of gross salary.
• Pension fund: Employees contribute 13% under the National Pension System or approximately 12.5% under the Private Pension System.

Income tax is applied progressively. Rates range from 8% on income up to 5 UIT to 30% on income above 45 UIT.

Work Visas and Permits in Peru

Foreign nationals working in Peru generally require a work visa or residency permit issued by Migraciones (gob.pe/migraciones).

An EOR services provider with a registered entity in Peru can act as the sponsoring employer for work permit applications, simplifying the process for foreign hires without requiring the client to establish a local entity.

Visa type	Purpose	Validity
Temporary Resident Visa (work)	Employment by a locally registered entity	Up to 1 year, renewable
Designated Worker Visa	Intra-company transfers and specialist assignments	Up to 1 year, renewable
Investor Visa	Foreign nationals investing in or managing a Peruvian business	Up to 1 year, renewable

Misclassification Risk in Peru

Misclassifying an employee as an independent contractor in Peru triggers retroactive liability under Legislative Decree 728, the country's primary labor law.

Peruvian labor authorities look at the following indicators when determining whether a contractor relationship should be reclassified as employment:

• Exclusivity: The worker provides services only to one company, with no other clients.
• Fixed hours: The company sets the worker's schedule and monitors attendance.
• Employer equipment: The worker uses tools, devices, or systems owned by the company.
• Economic dependence: The worker's income relies entirely on payments from one employer.

A reclassification finding exposes the employer to the following penalties:

• Retroactive payroll taxes: All unpaid income tax withholdings become immediately due.
• EsSalud contributions: Back contributions at 9% of gross salary for the full reclassified period.
• CTS and Gratificación: Retroactive deposits and bonus payments for every year of misclassified service.
• SUNAFIL fines: The labor inspectorate can impose administrative fines on top of back payments.

An EOR services provider makes the worker a compliant employee from day one, removing misclassification risk entirely.

Hiring, Onboarding, Termination and Offboarding in Peru

Hiring in Peru requires structured processes at every stage of the employment lifecycle. Legislative Decree 728 governs the core rules for contracts, termination grounds, and notice obligations.

Background checks are permissible in Peru. Employers may conduct criminal record checks, employment history verification, and education credential checks. Employee consent is mandatory before any check is run, and all data handling must comply with Law 29733, Peru's personal data protection law.

The sections below cover onboarding steps, valid termination grounds, and offboarding obligations in sequence.

Onboarding

Before Day One

• Issue a compliant written employment contract under Legislative Decree 728, specifying role, salary, duration (if fixed-term), and probation period.
• Register the employee with EsSalud and open a CTS savings account at an approved financial institution.
• Enroll the employee in either the ONP national pension fund or an AFP private pension fund, and activate Vida Ley life insurance coverage.
• Collect required documentation: national ID (DNI) or passport, tax identification number, and bank account details for payroll.

Day One

• Conduct orientation covering the employee's role, internal policies, health and safety obligations, and data protection responsibilities under Law 29733.
• Confirm equipment delivery and grant system access.

First Week

• Complete payroll setup and confirm the first pay date with the employee.
• Enroll in a supplemental EPS private health plan if applicable under the employment agreement.

Beyond

• Schedule 30-day and 90-day check-ins to confirm role alignment and probation period milestones.

Termination

Under Legislative Decree 728, valid grounds for termination include serious misconduct, poor performance, unjustified absence, economic or structural redundancy, mutual agreement, and resignation. The employer must provide written notice to both the employee and the trade union where one is recognized.

Offboarding

Settlement

• Calculate and pay the final salary, pro-rata Gratificación for the current half-year period, and accrued vacation payout.
• Pay any applicable indemnity for unfair dismissal, up to a maximum of 12 monthly salaries.
• Release the full CTS balance to the employee upon termination.

Documents

• Issue a certificate of employment and any required SUNAT tax documentation for the employee's records.
• Deregister the employee from EsSalud and notify the AFP or ONP of the termination date.

Exit

• Recover company equipment and revoke all system access on or before the last working day.
• Confirm the final payroll run date and verify the bank transfer has been processed.

What's New: Recent Regulatory Changes in Peru

Peru's employment framework has seen several regulatory updates since DS 002-2019-TR introduced vacation fractioning rules, with MTPE and SUNAFIL continuing to issue guidance affecting payroll and employment conditions.

• DS 002-2019-TR allows employees to fraction annual leave into periods of no fewer than seven calendar days, requiring payroll systems to track partial leave balances accurately.
• The minimum wage is subject to periodic government review; employers must monitor MTPE announcements and update payroll immediately upon any change to the 1,025 PEN monthly floor.
• SUNAFIL has increased inspection frequency and penalty amounts, making documentation of contracts, payroll records, and benefit deposits a compliance priority.
• Law 31572 (and its predecessor Law 31088) establishes binding rules for remote work arrangements, including employer obligations to cover connectivity costs and ergonomic equipment.
• Firms with 20 or more employees must calculate and distribute profit-sharing annually, with reporting obligations to SUNAT that require accurate full-year payroll data.

Employers should review payroll configurations and HR policies at least quarterly, assigning a named owner to track MTPE and SUNAFIL updates as they are published.

Costs and Financial Planning for Hiring in Peru

Total employer cost in Peru extends well beyond base salary. Statutory contributions add approximately 40 to 44 percent to direct payroll cost.

Several cost categories are easy to underestimate. CTS deposits amount to roughly 1.16 months' salary per year, two Gratificación bonuses add the equivalent of two months' salary annually, profit-sharing applies to firms with 20 or more employees, and Vida Ley life insurance premiums are a mandatory employer obligation. Understanding the employer of record cost model helps finance teams budget accurately before making a hire.

Cost Element	Direct Entity	Gloroots EOR
EsSalud (9% of salary)	Employer manages directly	Included and filed by Gloroots
CTS deposits (approx. 1.16 months/year)	Employer manages directly	Calculated and deposited by Gloroots
Gratificación (2 months/year)	Employer manages directly	Calculated and paid by Gloroots
Profit-sharing (firms with 20+ employees)	Employer calculates and files	Managed and reported by Gloroots
Vida Ley life insurance	Employer sources and pays	Activated and maintained by Gloroots
Entity setup and maintenance	Required; ongoing cost	Not required
EOR service fee	Not applicable	Predictable, country-specific pricing

Common Challenges and How Gloroots Solves Them in Peru

Managing CTS deposit deadlines, Gratificación timing, SUNAFIL audits, and profit-sharing calculations creates significant compliance overhead for growing teams in Peru.

Challenge	How Gloroots Addresses It
CTS deposit deadlines (May and November)	Gloroots tracks and executes CTS deposits on schedule, reducing the risk of late payment penalties under Legislative Decree 728.
Gratificación payroll integration	Gratificación payments in July and December are calculated and processed as part of the standard payroll cycle, with no manual intervention required from the client.
SUNAFIL audit readiness	Gloroots maintains employment records, payroll documentation, and contribution filings in audit-ready format at all times.
Profit-sharing calculation for 20+ employee threshold	Once a workforce reaches 20 employees, profit-sharing obligations apply. Gloroots monitors headcount thresholds and calculates distributions accurately under the applicable sector rates.
Work permit sponsorship for foreign hires	Gloroots supports work permit applications for foreign nationals, managing documentation and submission timelines to keep hiring on track.

Why Gloroots Is a Strong EOR Partner in Peru

Gloroots is built for companies hiring between 1 and 50 employees in Peru without a local entity, requiring compliant payroll and statutory benefit management from day one.

Gloroots manages CTS, Gratificación, EsSalud contributions, Vida Ley insurance, and profit-sharing obligations, with local legal expertise grounded in Legislative Decree 728 and its implementing regulations.

Gloroots can onboard a new hire in Peru in approximately 1 to 2 weeks, covering registration, enrollment, and contract execution.

This makes Gloroots a practical option for companies testing the Peruvian market before committing to entity registration and the ongoing compliance overhead that comes with it.

Before signing, ask Gloroots to confirm its entity ownership status in Peru and request a full statutory cost breakdown that includes EsSalud, CTS, Gratificación, Vida Ley, and any applicable profit-sharing contributions.

Conclusion

Peru's mandatory CTS and Gratificación obligations make statutory compliance among the most layered employment frameworks in Latin America.

Before selecting a provider, request a full statutory cost breakdown covering CTS, Gratificación, EsSalud, and profit-sharing, and confirm that the EOR holds direct entity ownership in Peru. Companies expanding across the region may also want to review employer of record Brazil for a comparable statutory compliance overview.

Frequently Asked Questions About Employer of Record in Peru

The questions below cover the most common considerations for companies evaluating an EOR in Peru, including entity requirements, onboarding timelines, statutory contributions, and work permit support.

Do I need a legal entity to hire employees in Peru?

No. An EOR allows you to hire legally in Peru without registering a local entity. The EOR acts as the legal employer, managing contracts, payroll, and statutory contributions under Legislative Decree 728. This is the fastest path to hiring in Peru, typically taking 1 to 2 weeks versus several months for entity setup.

How long does it take to onboard an employee in Peru through an EOR?

Most EOR providers can onboard a new hire in Peru within 1 to 2 weeks of contract signing. This includes EsSalud registration, CTS account setup, pension enrollment, and Vida Ley activation. Entity setup, by contrast, can take several months and requires ongoing compliance overhead.

What are the mandatory employer contributions in Peru?

Employers in Peru contribute 9% of gross salary to EsSalud (public health insurance). They also deposit CTS twice yearly, pay Gratificación bonuses in July and December, and provide Vida Ley life insurance from day one. Companies with more than 20 employees must share profits.

What is CTS and is it mandatory in Peru?

CTS (Compensación por Tiempo de Servicios) is a mandatory statutory benefit in Peru. Employers deposit approximately 1.16 months' salary per year into a bank account held in the employee's name: 50% by May 15 and 50% by November 15. The full balance is released to the employee upon termination.

What is the difference between an EOR and a PEO in Peru?

A PEO in Peru operates as a co-employer and requires the client company to hold a registered legal entity in the country. An EOR is the sole legal employer and requires no local entity. For companies without a Peruvian entity, an EOR is the compliant path to employment.

Can an EOR sponsor work permits in Peru?

An EOR with a registered entity in Peru can act as the sponsoring employer for work permit applications through Migraciones. This allows foreign nationals to work legally in Peru without the client company needing its own entity. Processing timelines and requirements vary by nationality and visa type.