If you would like to establish a business presence in South America, Peru is a fantastic place to do so. The country is home to the Andes Mountains and Machu Picchu. With...
Read MoreIf you would like to establish a business presence in South America, Peru is a fantastic place to do so. The country is home to the Andes Mountains and Machu Picchu. With a large workforce and growing GDP, a variety of businesses enjoy plenty of opportunities, especially those in manufacturing, fishing, mining, and tourism.
Reading Time: 2 minutes
If you would like to establish a business presence in South America, Peru is a fantastic place to do so. The country is home to the Andes Mountains and Machu Picchu. With a large workforce and growing GDP, a variety of businesses enjoy plenty of opportunities, especially those in manufacturing, fishing, mining, and tourism.
When you decide to expand to Peru, you’ll need to set up your Peru payroll. Although this task sounds relatively simple, a complicated tax structure and a high chance of being audited means you’ll need to pay extra attention to matters of compliance or choose Peru payroll outsourcing. Globalization Partners can help you stay compliant and set up your Peru payroll quickly.
Employers must make multiple contributions, which include giving 9% of their payroll to the National Health System (RPS). If you offer an additional health plan, you can get a credit for part of that expense. Employers also contribute an average of 11.5% of their gross salary to ASPs, which are private entities that manage pension funds for retirement, disability pensions, and funeral costs. If you operate in an industry with risky work, you are required to have supplementary insurance for employees.
Peru operates under a progressive personal income tax scale with rates ranging from 8% to 30%. However, tax rates typically change every year. Non-residents in the country only have to pay taxes on income earned in Peru at a rate of 30%. Other tax rates include:
You can choose from four main Peru payroll options when setting up your payroll:
You will need to establish a subsidiary or choose a subsidiary alternative before you can pick a Peru payroll option. Start by registering the name of your business with the Peruvian Public Registry. You’ll then need to get a deed, minutes, and accounting books notarized by the Portal Servicios Ciudadano y Empresas. Employers must also receive a Certificate of Registration and a tax ID number to pay employees.
Peru allows a standard probationary period of three months; this can be extended to six months to high-level/management positions. If you terminate an employee, you’ll need objective grounds or cause to do so with documentation. Try to give employees at least six calendar days of written notice. An employee who is dismissed without cause typically receives up to 12 months of severance pay.
Globalization Partners offers a Peru payroll outsourcing option that frees up your time and reduces stress. Contact us today to learn more about our services.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
If you’re ready to grow your business, or you have questions about a specific country, complete the form. One of our experts will be in touch shortly.
