Peru – Employment Terms and Conditions

What are the standard working hours in Peru, and how is overtime regulated?

Peruvian law caps working time at 8 hours per day and 48 hours per week. The working week may be distributed across no more than six days. This ceiling is broadly in line with limits seen across many other jurisdictions, though 48 hours per week sits toward the upper end of what comparable legal frameworks permit.

Any employee who works more than 6 hours in a single day is entitled to a meal break of at least 45 minutes. A minimum continuous rest period of 12 hours must separate one working day from the next. On a weekly basis, workers must receive at least 24 uninterrupted hours of rest, which customarily falls on Sunday.

Certain categories of worker fall outside the standard working time limits. These include managerial and trust-based personnel, as well as individuals whose tasks are performed without direct supervision — for example, those who regularly work away from company premises.

Overtime must in principle be voluntary, with the exception of emergencies arising from accidents, force majeure, or situations where continued work is necessary to prevent significant harm to persons or property. Although Peruvian legislation does not specify a hard cap on the number of overtime hours, employers remain under an obligation to ensure that extended working time does not endanger workers’ health and safety.

For employees subject to the standard working time ceiling, overtime compensation is set at 1.25 times the normal rate for the first two additional hours and 1.35 times the rate for any hours beyond that. Work performed on designated rest days or public holidays attracts a 100% surcharge. Night work — generally defined as the period between 10 PM and 6 AM — is remunerated at 135% of the standard hourly rate.

Employers carry a legal duty to keep precise records of employee working time, covering regular hours, overtime, and rest periods. An appropriate system for logging arrival and departure times must be in place; this may take the form of a physical register, an electronic platform, or another method sanctioned by the relevant labour authority.

What employment rights and benefits are workers entitled to in Peru?

Employees acquire an entitlement to 30 calendar days of paid annual leave. A minimum of 15 days must be taken within the year in which they fall due, while any remaining days may be converted to a cash payment. Annual leave does not roll over automatically — it must be used within the relevant year, although accumulation across up to two consecutive periods is possible by mutual agreement.

Workers are entitled to up to 365 days of paid sick leave. The employer covers the first 20 days of absence at full salary; thereafter, the employer initially funds sick pay at 70–80% of salary before being reimbursed by the social security authority. A medical certificate is required to activate this benefit.

Female employees are entitled to 98 days of paid maternity leave, divided equally into 49 days before childbirth and 49 days after delivery. Where the birth involves multiple children or complications, the entitlement may be extended by a further 30 days. Fathers are entitled to 10 consecutive days of paternity leave following the birth of a child.

In addition to regular salary, workers receive two mandatory bonus payments each year — one in July and one in December — each equivalent to one month’s pay. Known as the Gratificación, these effectively constitute a 13th and 14th month salary. An additional extraordinary bonus equal to 9% of each Gratificación is also payable to employees.

Employers must pay into the Compensation for Time of Service (CTS — Compensación por Tiempo de Servicios), a statutory severance fund deposited on a semi-annual basis in May and November into a dedicated bank account held by the employee. The deposit amounts to roughly 9.72% of annual salary and begins accruing from the employee’s first working day. Its purpose is to provide a financial cushion in the event of job loss.

Peru recognises a number of public holidays that count as paid days off, separate from the annual leave entitlement. The government determines each year whether public holidays that coincide with weekends are transferred to a working day. All of these entitlements apply to formal private sector workers, including legally employed foreign nationals.

What are the rules around minimum wage and pay in Peru?

Peru’s statutory minimum wage is referred to as the Remuneración Mínima Vital (RMV). Unlike some countries that apply regionally differentiated wage floors, Peru maintains a single national rate, reflecting a policy goal of reducing poverty while sustaining economic competitiveness across different industries.

The RMV was raised to 1,130 soles (approximately USD 298.80) with effect from 1 January 2025, formalised through Supreme Decree N° 006-2024-TR, published on 28 December 2024. As the RMV is subject to periodic revision, the most current figure should always be verified via the Ministerio de Trabajo y Promoción del Empleo (MTPE).

The minimum wage is reviewed periodically — typically on an annual basis — by the National Council of Labour and Employment (CNTPE), which takes into account economic data including inflation figures, living costs, and growth trends. Where the council fails to reach agreement, the government retains the authority to set the rate by decree.

The RMV applies uniformly across all industries and regions. That said, sector-specific uplifts exist in certain areas: workers in the mining sector are entitled to a 25% premium above the RMV, bringing their minimum monthly income to PEN 1,412.50, while agricultural workers receive an additional allowance of 30% on top of the RMV.

Under part-time arrangements, pay is calculated proportionally to hours worked, with the minimum hourly value derived from the prevailing RMV.

How does the employment contract system work in Peru?

Employment contracts in Peru must be drawn up in writing and include all material terms: job title and duties, remuneration, working hours, and the conditions governing termination. Any applicable probationary arrangement must also be specified. Contracts must be produced in three copies, and the employer is required to submit one copy to the Labour Administrative Authority within 15 days of the contract being signed.

Peruvian labour law recognises several forms of employment contract, with the fundamental division lying between open-ended (permanent) contracts and fixed-term contracts. Open-ended contracts represent the standard vehicle for formal employment and entitle the worker to the full range of statutory benefits. Fixed-term contracts are tied to a specific purpose — such as completing a project or meeting a temporary operational need — and may not exceed five years in duration.

Part-time employment is defined as working fewer than an average of 4 hours per day. Part-time employees receive benefits on a proportional basis relative to their hours compared with those of a full-time equivalent.

Peru does not operate an at-will employment model. Any dismissal must be supported by a recognised cause, such as serious misconduct, a breach of contractual obligations, or redundancy. An employer seeking to end the employment relationship must be able to demonstrate justification. Terminations without just cause give rise to a compensation obligation of 1.5 monthly salaries per year of service, subject to a statutory ceiling.

The legal distinction between employees and independent contractors carries significant consequences in terms of entitlements and obligations. Employers must take care when structuring contracts to avoid misclassifying workers, as doing so can expose the business to regulatory penalties.

How does the workplace pension system work in Peru?

Peru operates two distinct retirement systems: the National Pension System (SNP), administered by the Pension Standardisation Office (ONP), and the Private Pension System (SPP), managed by Pension Fund Administrators (AFPs). All dependent workers are required to affiliate with one of these two systems, and the choice between them must be made upon entering employment.

Rather than enrolling employees automatically into a single national scheme — as is the case in countries like Germany — Peru places the decision squarely with the individual. When a new worker joins a company, the employer must supply an information pack explaining both options so the worker can make an informed choice, unless they are already registered with one of the systems.

Workers affiliated with the SNP contribute 13% of their monthly salary. Those enrolled in the SPP contribute approximately 12–13% in total, covering their retirement savings account, AFP commission charges, and insurance premiums. In both cases, the employer is responsible for deducting the relevant amounts from salary and remitting them to the appropriate authority.

The AFP model bears some resemblance to Australia’s superannuation system in that contributions accumulate in a personal account managed by a private fund. Under the standard remuneration-based commission structure, the average total AFP contribution is around 12.95% of taxable income, of which 10% is directed into the worker’s individual capitalisation account, with the balance covering insurance and fund management fees.

Employers must additionally contribute to EsSalud at a rate of 9% of salary, providing healthcare coverage for the worker and their dependants. For the most current contribution rates, consult the Superintendencia de Banca, Seguros y AFP (SBS) or the Oficina de Normalización Previsional (ONP).

What types of pension arrangements are available to expats in Peru?

Pension affiliation is compulsory for all dependent workers in Peru, irrespective of nationality. In practice, any expatriate employed on a formal Peruvian payroll will be required to join either the ONP or an AFP from their first day of employment.

Foreign nationals who have worked in Peru and built up contributions in an AFP through formal payroll registration may, under certain conditions and subject to applicable legal requirements, withdraw those accumulated funds. This makes the AFP route broadly more attractive to expats who anticipate leaving Peru at some point, as the individual account structure means the funds are in principle reachable, subject to the rules in force when withdrawal is sought.

In some circumstances, the law permits affiliated workers to change their pension arrangement or move between the public and private systems. Expats who join the public ONP system should be aware that qualifying for an ONP retirement pension requires a minimum of 20 years of contributions — a threshold that workers spending only part of their career in Peru may find difficult to reach.

Peru has not established a network of bilateral social security totalisation agreements on the scale maintained by some other countries. As a result, contributions made to the Peruvian system may not automatically count towards pension entitlements in another country. Expats arriving mid-career would be well advised to take independent financial advice on how their Peruvian pension record interacts with rights accumulated elsewhere.

Offshore private pension arrangements — such as self-invested personal pensions or employer-sponsored schemes based in another country — are not formally integrated into Peru’s pension framework. However, maintaining such arrangements alongside mandatory Peruvian contributions is not prohibited by law. Given that eligibility conditions and tax treatment vary considerably, readers should verify the applicable rules with the SBS, the ONP, or a financial adviser experienced in cross-border pension matters.

What is the retirement age in Peru, and how does the pension eligibility system work?

Under both the ONP and AFP systems, the standard age at which retirement benefits become accessible is 65. This threshold applies equally to men and women and has not recently been differentiated by occupation within the general private sector framework.

To draw a retirement pension from the SNP (public system), a worker must have accumulated at least 20 years of contributions and have reached the age of 65 — both conditions must be satisfied simultaneously. Workers who fall short of the 20-year contribution requirement under the ONP may not be entitled to a standard retirement pension from that system and should seek specific guidance from the ONP.

Workers enrolled in the SPP (private AFP system) must also reach age 65, and the balance accumulated in their individual account must be sufficient to generate a retirement pension. A guaranteed minimum pension is built into the SPP to ensure that AFP retirees receive no less than 500 soles per month (approximately USD 130).

Early retirement before age 65 is available under specific conditions within both systems — for example, for those in hazardous occupations or who meet certain disability criteria. The precise rules are set out in the relevant legislation and should be verified with the SBS or ONP.

A significant pension reform — Law No. 32123 — was passed in September 2024 and subsequently regulated in September 2025 through Supreme Decree No. 189-2025-EF, with the regulator’s operational procedures still pending. The reform aims to substantially restructure the pension system and is being introduced incrementally. Given the pace of change, expats planning for retirement in Peru should keep track of developments through the official websites of the SBS and ONP and seek professional advice on the implications for their own entitlements.

What taxes and social contributions are deducted from wages in Peru?

Employers are required to withhold income tax (Impuesto a la Renta de Quinta Categoría) from salaries and other employment remuneration on a monthly basis, calculated by projecting the employee’s expected annual earnings.

Peru’s income tax thresholds are expressed in Tax Units (UIT — Unidad Impositiva Tributaria), a value adjusted by the government each year to account for inflation. For 2025, one UIT equals PEN 5,350. The first 7 UIT of annual income — equivalent to PEN 37,450 in 2025 — is exempt from income tax for individual employees. Income above this exemption is taxed progressively at rates ranging from 8% to 30%. Current tax bands and UIT values can be found on the SUNAT (Superintendencia Nacional de Aduanas y de Administración Tributaria) website.

Non-resident workers are subject to a flat withholding tax of 30% applied to gross Peruvian-source income, with no personal exemption. Tax residency is generally acquired after spending more than 183 days in Peru within any 12-month period, at which point the individual becomes liable under the same progressive rate structure as resident taxpayers.

Pension contributions are deducted from gross salary — 13% for those in the ONP public system or approximately 12–13% for AFP members. Employee pension contributions — whether directed to the ONP or an AFP — are deductible from gross income when computing taxable income, which may reduce the overall tax bill.

All employees and their eligible dependants are enrolled as statutory members of the public health service (EsSalud). Healthcare coverage is funded by an employer contribution of 9% of the monthly wage paid directly to the public health system; this cost is borne by the employer and is not subtracted from the employee’s take-home pay.

What are the rules around trade unions and collective bargaining in Peru?

The right to organise, collectively bargain, and take industrial action in Peru is enshrined in the Constitution and given detailed effect by the Collective Labour Relations Law. Workers may freely form or join trade unions and exercise their collective rights within the boundaries set by legislation.

Union membership is voluntary and is not uniformly prevalent across all industries. Organised labour tends to have a stronger presence in sectors such as mining, manufacturing, and public services. Where collective bargaining agreements are in place, they may improve upon statutory minimums — delivering higher wages, reduced working hours, or better leave provisions — and their terms extend to all employees within the bargaining unit, whether or not those individuals hold union membership.

There is no explicit legal bar on foreign nationals joining a trade union in Peru. In practice, however, language constraints, the particular nature of many expatriate employment arrangements, and the prevalence of informal working in certain parts of the economy can limit the extent to which expats engage with union structures. Expats working in sectors characterised by strong collective agreements — particularly mining and the extractive industries — should familiarise themselves with the terms of any applicable agreement in their workplace, as these can substantially enhance the conditions offered beyond the statutory baseline.

Law No. 29783 and Supreme Decree 005-2012-TR require every company to establish an Occupational Health and Safety Management System. Where an employer fails to meet its health and safety obligations, employees may raise a complaint through union representatives or directly with the labour authorities.

Are there any particular employment protections or challenges that expats should be aware of in Peru?

Peruvian labour law confers the same formal employment rights on foreign nationals engaged under a local contract as it does on domestic workers. Nevertheless, expats typically encounter a number of practical challenges that set their experience apart from that of local employees.

Employment contracts, payslips, and official communications from government agencies are all issued in Spanish. This has no bearing on an employee’s legal entitlements but can create a significant practical obstacle for those who are not yet proficient in the language. It is strongly advisable to have any employment contract reviewed by a bilingual legal professional before signing, and to use a qualified interpreter when engaging with labour or pension authorities.

Foreign workers generally require a work visa or residency permit that specifically authorises paid employment. Entitlements under labour law are linked to lawful immigration status, and shifts in visa category during an employment relationship can interrupt the continuity of rights — potentially affecting CTS accruals or social security affiliation. Any change in immigration status should be communicated promptly to both the employer and the relevant authorities.

Overseas academic qualifications are not given automatic recognition in Peru. For licensed professions — including medicine, law, and engineering — credentials typically need to be formally validated (revalidación or reconocimiento de títulos) through the competent professional body or the institution that is to acknowledge the qualification. This process can be lengthy and should be initiated well before commencing work in a regulated field.

Labour inspectors are empowered to enter workplaces at any time and may direct employers to rectify non-compliance, levy fines, or order premises to close. The body responsible for labour law enforcement is SUNAFIL (Superintendencia Nacional de Fiscalización Laboral). Expats who consider that their employment rights have been violated may lodge a complaint with SUNAFIL.

Informality continues to characterise a significant portion of the Peruvian labour market. Expats engaged by smaller enterprises or on less formalised terms may find that statutory protections, while legally applicable, are not consistently observed in practice. The most effective safeguard is to insist on a formal written contract registered with the appropriate labour authority, which provides the strongest foundation for accessing all statutory entitlements.

How do I apply step-by-step to ensure compliance when starting employment in Peru?

1. Obtain the correct visa or work permit. Ensure your immigration status in Peru expressly authorises employment before signing any contract. Consult the Superintendencia Nacional de Migraciones for visa categories and requirements.
2. Review your employment contract in Spanish. Have the contract reviewed by a bilingual Peruvian labour lawyer before signing. Confirm that it includes job description, salary, working hours, probation terms, and grounds for termination.
3. Ensure your employer registers you on the payroll (planilla electrónica). Ask for confirmation that you have been registered in the electronic payroll system (PLAME), which covers income tax withholding, EsSalud, and pension contributions.
4. Choose your pension system (ONP or AFP). Your employer must provide an information brochure explaining both options. Consider your likely length of stay in Peru when deciding — the AFP individual account model is often more flexible for shorter-term expat workers.
5. Register for a tax identification number (RUC) with SUNAT if required. While employers handle withholding for most employees, you may need your own RUC if you have additional income sources or are self-employed. Visit SUNAT for guidance.
6. Validate overseas qualifications if working in a regulated profession. Contact the relevant professional body or academic institution in Peru to begin the revalidación process before starting work.
7. Open a bank account for CTS deposits. You are entitled to designate the bank account into which your employer deposits the CTS severance fund. Choose a bank and notify your employer in writing.

Frequently asked questions about employment in Peru for expats

Are foreign qualifications recognised in Peru for employment purposes?

Qualifications obtained overseas are not automatically accepted in Peru. For positions that do not require a professional licence, an employer may choose to recognise a foreign degree at their own discretion. For regulated professions — including medicine, law, architecture, and engineering — credentials must go through a formal recognition or revalidation (revalidación) procedure conducted through the relevant university or professional college (colegio profesional). This process can run to several months, so it is advisable to initiate it before relocating to Peru if you intend to practise a licensed profession.

Can I access my AFP pension fund contributions if I leave Peru?

Foreign nationals who have worked in Peru and built up AFP contributions through formal payroll registration may withdraw those funds under certain circumstances, provided they meet the requirements established by law. The exact conditions and documentation needed for a departing foreign worker to access their account should be confirmed with your AFP provider and the SBS directly, as the applicable rules are subject to change.

What happens to my employment rights if my visa status changes mid-contract?

Entitlements under Peruvian labour law depend on holding lawful authorisation to work in the country. Should your visa category change during an employment relationship — for instance, transitioning from a temporary work visa to a different residency status — it is essential to confirm that your updated immigration category continues to permit the same type of work. Inform your employer and, where relevant, the labour and migration authorities without delay. Disruptions or changes to immigration status can interrupt the continuity of social security coverage and CTS accrual.

Do I have to join the ONP or AFP, or can I opt out of the pension system?

Pension affiliation is obligatory for all dependent workers in Peru, meaning that formal employees cannot opt out entirely. You may, however, choose between the public ONP system and a private AFP fund, and may in certain circumstances transfer between the two. For shorter assignments, the AFP route — which builds up an individual savings account — is often the preferred option among expats, as the accumulated balance may be accessible upon departure from Peru.

Is there a probationary period in Peru, and what protections apply during it?

Yes. Peruvian labour law permits a probationary period at the start of an employment contract. The default probationary duration is up to three months, during which the employer may end the contract without incurring unfair dismissal liability. For senior positions or roles requiring specialist expertise, the probationary period may be extended by agreement to up to six or twelve months. During the probationary phase, other statutory entitlements — including CTS accrual and access to leave — take effect from the employee’s first working day.

Are the same working-hours rules and leave entitlements applied to expat workers as to local employees?

Yes. The full body of formal employment law protections — including the 48-hour weekly ceiling, overtime pay rates, 30 calendar days of annual leave, maternity and paternity entitlements, and mandatory bonus payments — applies equally to foreign nationals working under a local Peruvian employment contract. The principal distinction in treatment concerns income tax: non-residents face a flat 30% rate on Peruvian-source income, while tax residents benefit from a progressive rate structure and a personal exemption of 7 UIT per year.

How is the CTS (Compensation for Time of Service) fund accessed?

The employer is required to deposit the CTS on a semi-annual basis — in May and November — into a dedicated bank account designated by the employee. The funds held in the CTS account are principally intended to be drawn upon at the point of termination of employment. A limited range of circumstances permits partial withdrawals during an ongoing employment relationship, subject to rules set by the Ministry of Labour and Finance. Expats should select a bank that makes it straightforward to access funds from abroad when the time comes to leave Peru.

Where can I report a breach of my employment rights in Peru?

The principal authority responsible for enforcing labour rights in Peru is SUNAFIL (Superintendencia Nacional de Fiscalización Laboral). Workers — including those who wish to remain anonymous — may file a complaint if they believe an employer is failing to comply with obligations relating to minimum wage, overtime, social security registration, or CTS deposits. For matters involving taxation, the relevant body is SUNAT. For pension-related concerns, contact the SBS for AFP issues or the ONP for matters concerning the public pension system.

Are there any restrictions on the types of jobs expats can hold in Peru?

Peruvian law places limits on the proportion of foreign workers a private sector employer may engage — as a general rule, foreign employees must not exceed 20% of the total headcount, and their combined salaries may not surpass 30% of the total payroll, though certain exceptions apply. Some positions in the public sector are reserved exclusively for Peruvian nationals. Particular sectors, such as media, and certain regulated professions may carry additional nationality-based requirements. It is advisable to confirm the rules applicable to your specific role with a local labour lawyer before accepting an offer.