Employee Benefits in Peru

Who Is Entitled to Employee Benefits In Peru

In Peru, most core employee benefits apply to dependent employees working under an employment contract, whether for an indefinite period, a fixed term, or part-time. As a rule of thumb, if your company exercises subordination and control over how, when, and where the person works, Peruvian law will likely treat them as an employee entitled to statutory benefits, even if you label them as a contractor.

Full-time employees generally receive the full package of benefits, including annual leave, statutory bonuses, CTS, and social security coverage. Part-time employees who work fewer than four hours per day have reduced entitlements and may be excluded from some benefits such as CTS and profit sharing, depending on the specific rules. Genuine independent contractors who provide services autonomously and issue invoices rather than receiving payroll wages are not entitled to employment benefits under labour law, although misclassification is heavily scrutinised. Eligibility can also depend on minimum service periods, for example needing one month or more of service for certain proportional payments.

Overview of Employee Benefits In Peru

Peru offers a robust set of mandatory employee benefits by international standards, particularly when it comes to bonuses, severance savings schemes, and paid leave. Benefits play a central role in local workplace culture, and employees are highly aware of their legal entitlements, so compliance and clear communication are critical for foreign employers entering the market.

Mandatory Employee Benefits In Peru

Mandatory benefits are legally required and form the core of any employee benefits package in Peru. Here's a comprehensive list of mandatory benefits in Peru:

Paid Annual Leave (Vacation)

Peruvian law grants employees at least 30 calendar days of paid annual leave for each full year of service with the same employer. To qualify for the full 30 days, an employee must meet minimum attendance thresholds during the service year. If the employee has not met these thresholds or has less than one year of service, they are generally entitled to a proportional amount of leave or monetary compensation if the leave is not taken and specific conditions are met.

Annual leave is usually scheduled by mutual agreement between the employee and the employer, considering business needs. You should keep accurate records of leave accrual and usage, and maintain written requests or approvals as documentation. Peruvian rules are strict about not routinely replacing leave with cash, except in the special regime of vacation “sell-back” where certain days may be monetised under specific legal conditions.

Paid Public Holidays

Employees in Peru are entitled to paid days off on official national public holidays, which include major dates such as New Year’s Day, Independence Day (28–29 July), Christmas Day, and others established by law. When an employee works on a public holiday, they are generally entitled to a premium payment in addition to their regular pay, unless another compensatory day off is agreed as permitted by law.

Your company must track which public holidays apply and ensure correct payroll treatment. Documentation usually includes time and attendance records that show whether employees worked on those days and how you applied either double pay or compensatory rest. Employees are very conscious of their rights regarding holidays, so transparent policies help avoid disputes.

Statutory July and December Bonuses (Gratificaciones)

Peru requires employers to pay two major statutory bonuses each year, commonly known as “gratificaciones”. One is paid in July for Independence Day and the other in December for Christmas. Each bonus is generally equivalent to one month’s salary for employees who have worked the entire preceding semester, with proportional amounts for those with shorter service.

These bonuses are calculated based on the employee’s regular remuneration, usually including fixed salary and certain regular allowances but excluding strictly occasional payments. When the employer contributes to EsSalud, employees also receive an additional “extra bonus” equivalent to a percentage of the EsSalud contribution that would otherwise be paid, which effectively increases the net benefit. Employers must document the calculation for each employee and keep supporting payroll records in case of labour inspections.

CTS Severance Deposits (Compensación por Tiempo de Servicios)

CTS is a mandatory severance savings scheme designed as a form of unemployment protection. Twice a year, in May and November, employers must deposit an amount into a dedicated CTS account in the employee’s name at a financial institution chosen by the employee. The deposit is generally equivalent to roughly one-twelfth of the employee’s annual remuneration for each deposit period, adjusted proportionally for incomplete periods.

CTS covers most employees working at least four hours per day, with some exceptions and special regimes. You must request the employee’s chosen financial institution, make timely deposits, and keep deposit receipts and calculation worksheets. Employees can usually access part of their CTS funds under specific legal conditions, while the remainder stays as a cushion for termination. Non-compliance with CTS rules can trigger fines and exposes your company to back payments and interest.

Health Insurance Contributions (EsSalud and EPS)

Employers in Peru are required to contribute to the national health insurance system (EsSalud) for their employees. The standard employer contribution is calculated as a percentage of the employee’s monthly remuneration and is fully funded by the employer. This grants access to public health services and temporary disability coverage for sickness and maternity, subject to qualifying periods and procedures.

As an alternative or complement, employers can enroll employees in a private health provider under the EPS regime. In this structure, a portion of the EsSalud contribution can be redirected to help fund private coverage, which often offers faster and broader care. You must sign contracts with the EPS provider, keep copies of affiliation forms, and report contributions correctly. Employees may need to present medical certificates and other documentation to access certain benefits like temporary disability payments.

Mandatory Life Insurance (Seguro de Vida Ley)

Seguro de Vida Ley is a mandatory life insurance policy that employers must provide for their employees. Historically it became compulsory after four years of service, but current rules require coverage from the beginning of the employment relationship. The insurance pays benefits to the employee’s beneficiaries in case of death or to the employee in case of total and permanent disability, with minimum coverage amounts set by regulations.

To comply, your company must contract a qualifying policy with an authorised insurer and ensure that all eligible employees are covered. You should maintain records including the insurance policy, list of covered employees, and premium payment receipts. Proper documentation is essential during inspections and also helps employees and their families understand their rights if a claim arises.

Profit Sharing (Participación en las Utilidades)

In Peru, companies in certain sectors and above a specific employee threshold must share a portion of their taxable profits with employees. The percentage of profits allocated to employees varies by industry. Profit sharing is distributed among eligible employees based on days worked and remuneration earned during the financial year, following a formula defined in law.

Not all companies are subject to profit sharing, but those that are must calculate and pay the benefit within the deadlines established after filing the annual tax return. You will need detailed payroll and attendance records, as well as the company’s financial statements and corporate income tax return, to support the calculations. Employees are entitled to a breakdown of how their individual profit share was determined.

Paid Maternity Leave

Female employees in Peru are entitled to paid maternity leave, generally consisting of 49 days before and 49 days after childbirth, for a total of 98 days, with extensions possible in cases of multiple births or complications. During this period, the employee receives a maternity allowance funded primarily by EsSalud, provided that qualifying contribution conditions are met.

The employer is responsible for processing the documentation with EsSalud, which includes medical certificates confirming the pregnancy and expected birth date, as well as forms submitted to the social security system. You must also guarantee job protection during the leave and ensure that the employee is reinstated to her position or an equivalent role at the end of the leave, in accordance with anti-discrimination provisions.

Paid Paternity Leave

Male employees have a right to a period of paid paternity leave when their child is born. The standard entitlement is a defined number of consecutive calendar days, which can vary depending on the legal regime and whether special circumstances, such as multiple births or complications, apply. During this leave, the employer pays the employee’s regular remuneration.

To administer paternity leave, your company should request documentation such as the child’s birth certificate or medical confirmation and maintain internal records of leave requests and approvals. Providing clear policies and encouraging fathers to take their leave supports gender equality and family-friendly practices in your organisation.

Paid Sick Leave and Temporary Disability Coverage

Employees who are temporarily unable to work due to illness or accident are entitled to sick leave. Typically, the employer pays the employee’s usual remuneration for an initial period of absence, after which EsSalud may reimburse the employer or take over payments as a temporary disability benefit, provided that the employee meets eligibility and contribution requirements.

The process requires medical certificates issued by authorised health providers and timely notification to your payroll and HR teams. You should keep these certificates along with attendance records and reimbursement claims submitted to EsSalud. A clear internal process helps avoid errors in pay and supports employees during periods of illness.

Occupational Health and Safety and Work Accident Insurance

Peruvian law obliges employers to provide a safe and healthy working environment and, in many sectors, to contract specific work accident insurance that covers occupational accidents and diseases. The level and type of coverage depend on the nature of the work and associated risks.

You must implement an occupational health and safety management system, conduct risk assessments, and keep training records, incident reports, and insurance policies on file. For employees, this framework provides essential protection against work-related harm and ensures that medical and compensation costs are covered when accidents occur.

Supplemental Employee Benefits In Peru

Supplemental benefits are not required by law, but can help you stand out as an employer and attract top talent. They include:

Enhanced Private Health and Dental Insurance

Many employers in Peru go beyond the mandatory EsSalud or basic EPS coverage by offering more comprehensive private health and dental plans. These plans often provide faster appointments, wider provider networks, better hospital conditions, and coverage for family members such as spouses and children.

Offering this benefit is particularly attractive in competitive professional sectors, where candidates expect private coverage as part of the package. Your company typically negotiates group policies with insurers, covers part or all of the premium, and defines whether dependants are included. Enhanced coverage sends a strong signal that you prioritise employee well-being.

Meal Vouchers or Food Allowance

Meal vouchers or daily food allowances are a popular perk in Peru, especially in urban areas where eating out at lunchtime is common. These benefits can be provided through prepaid cards, vouchers, or cash allowances specifically earmarked for food, sometimes with favourable tax treatment if structured correctly under local rules.

Employers offer meal benefits to support employees’ daily living costs and to differentiate themselves from companies that only deliver the legal minimum. Typically, eligibility is tied to days worked, and the value is set as a fixed daily or monthly amount. Consistent communication about how and where vouchers can be used helps maximise the benefit’s perceived value.

Transportation Allowance

Some employers provide transportation allowances to help employees cover commuting costs, particularly in cities with long travel times or limited public transport. This can take the form of a fixed monthly cash allowance, company-arranged shuttle buses, or reimbursement of actual travel expenses.

While not compulsory, transportation benefits can significantly improve employees’ daily experience and help with punctuality and retention. When structuring this allowance, you should consider whether to treat it as taxable remuneration or as a reimbursed expense, and maintain receipts or attendance records as appropriate to support your tax position.

Supplemental Retirement Savings or Pension Top-ups

Beyond mandatory pension contributions to the National Pension System (SNP) or Private Pension System (SPP), some employers voluntarily contribute extra amounts to employees’ retirement savings. These can be additional percentages of salary, matched contributions, or one-off long-service awards directed into pension accounts.

This type of benefit is more common in senior or executive packages and in multinational organisations looking to align Peruvian benefits with global retirement strategies. It reinforces long-term commitment and can be framed as part of a broader financial wellness program.

Performance and Retention Bonuses

In addition to the legally mandated July and December bonuses, many companies in Peru offer variable pay such as annual performance bonuses, project completion bonuses, or retention incentives. These payments are generally discretionary and based on meeting individual, team, or company targets.

Well-designed bonus schemes can drive performance and align employees with your business objectives. You should clearly define eligibility criteria, performance metrics, and payment timing in internal policies or employment contracts. Careful structuring and documentation also help determine whether such bonuses count toward the base for calculating some statutory benefits.

Flexible Work Arrangements and Remote Work Support

Flexible working hours, hybrid schedules, and fully remote roles have become more common in Peru, especially in technology, services, and multinational organisations. While flexibility itself is not a monetary benefit, employees increasingly view it as a core element of total rewards.

To support remote workers, employers may provide equipment such as laptops, monitors, and ergonomic chairs, as well as monthly stipends to cover internet or utilities. Clear telework policies aligned with Peruvian teleworking regulations are important to manage expectations, data security, and occupational health responsibilities.

Wellness, Mental Health, and Employee Assistance Programs

Some employers invest in wellness initiatives such as gym memberships, wellness stipends, mental health support, and employee assistance programs that provide confidential counselling. These programs help prevent burnout and support employees in managing work and personal challenges.

Implementation can range from simple reimbursements for wellness activities to comprehensive programs contracted with specialist providers. Communicating the availability and confidentiality of these services is key to encouraging utilisation.

Education Support and Training Allowances

Education-related benefits, such as funding for professional certifications, language courses, or postgraduate studies, are attractive to Peruvian professionals who prioritise career growth. Some employers also offer scholarships or tuition discounts through partnerships with local universities and institutes.

These benefits are typically subject to conditions, such as relevance to the employee’s role or commitment periods where the employee agrees to remain with the company for a specific time after completing funded studies. Written agreements and clear policies help manage expectations and protect your investment.

Tax Implications of Employee Benefits in Peru

How Are Employee Benefits Taxed for Employers?

For employers in Peru, most mandatory benefits such as statutory bonuses, CTS contributions, and social security payments are treated as deductible expenses for corporate income tax purposes, provided they are duly documented, reasonable, and related to generating taxable income. Employer contributions to EsSalud, EPS, and mandatory life insurance generally qualify as deductible payroll-related costs.

Supplemental benefits like health insurance upgrades, meal vouchers, and bonuses can also be deductible if they are properly supported by invoices, contracts, and payroll records, and if they are offered on a non-discriminatory basis or in compliance with transfer pricing principles for related parties. Failure to document benefits correctly or to withhold and pay associated taxes can lead to disallowance of deductions and tax assessments.

How Are Employee Benefits Taxed for Employees?

From the employee’s perspective, many cash benefits and allowances form part of taxable remuneration for Peruvian income tax, including statutory bonuses and most regular bonuses. Some benefits may enjoy partial or conditional tax advantages, particularly when they are provided in kind or under specific incentive regimes, but this depends on current tax rules and how the benefit is structured.

Mandatory social security contributions made by the employer to EsSalud are not treated as taxable income for the employee, whereas voluntary cash allowances such as general-purpose transportation or meal allowances may be taxable. You should work with local payroll and tax specialists to classify each benefit correctly and ensure that appropriate income tax and social security withholdings are applied.

Are There Tax Advantages to Offering Specific Benefits?

Certain benefits in Peru may be more tax efficient than equivalent cash salary, for example, employer-funded health insurance plans under recognised schemes or duly documented training and education expenses linked to the employee’s job. In some cases, providing benefits in kind, such as meal vouchers used at authorised establishments, can lead to more favourable treatment than simply increasing taxable salary.

However, the rules are technical and subject to change, and the tax authority may challenge arrangements that are primarily tax driven. To leverage any tax advantages safely, your company should rely on up-to-date advice, maintain clear documentation, and ensure that benefits have genuine business and HR rationales.

What Documentation Is Required for Tax Compliance?

To support the tax treatment of employee benefits in Peru, you must maintain comprehensive documentation. This typically includes employment contracts and internal policies describing benefits, detailed payroll records, invoices from insurers and other providers, CTS deposit receipts, and proof of social security contributions.

You should also keep calculations for statutory bonuses, profit sharing, and any variable pay, as well as evidence that benefits are provided consistently across comparable employees. Good documentation not only supports your corporate tax position but also prepares you for reviews by SUNAT (the tax authority) and SUNAFIL (the labour inspection authority).

Legal Considerations for Employee Benefits in Peru

Employee benefits in Peru are primarily governed by the Political Constitution, the Labour Productivity and Competitiveness Law and its regulations, sector-specific statutes on CTS, bonuses, profit sharing, and social security laws covering EsSalud, pensions, and insurance. Teleworking, occupational health and safety, and anti-discrimination rules also shape how you design and administer benefits.

Non-compliance with mandatory benefits can lead to significant financial liabilities, including back payments, interest, and administrative fines, as well as potential claims for damages and reputational harm. SUNAFIL is empowered to conduct inspections, request documentation, and sanction employers that breach labour and social security obligations.

For international employers, it is wise to conduct regular internal audits of payroll and benefits at least annually, or more frequently when entering the market or undergoing rapid growth. Periodic reviews with local counsel or trusted payroll providers help ensure that contracts, policies, and actual practices remain aligned with current law and case interpretations, reducing the risk of disputes, misclassification, or unexpected penalties.

How Benefits Impact Employee Cost

Mandatory benefits in Peru add a substantial margin on top of base salary, so understanding the total cost of employment is essential when planning headcount. When you account for employer social security contributions, CTS deposits, statutory bonuses, potential profit sharing, and paid leave, your total payroll cost can reach 30–40 percent or more above the employee’s gross monthly salary, depending on company sector and specific circumstances.

Effective cost management strategies include carefully structuring fixed versus variable pay, ensuring accurate classification of employees and contractors, and using supplemental benefits that deliver high perceived value relative to their cost, such as flexible work, targeted health upgrades, and development opportunities. In a competitive labour market, investing in a well-designed benefits package can pay off through higher retention, better engagement, and improved productivity, which ultimately offset the additional payroll burden over time.