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Payroll in PePeru.






Country Capital



Peruvian sol (PEN)

Peru is a promising place to establish a business presence in South America, thanks to a large workforce and growing GDP.

Companies thinking of scaling their business to Peru, must establish payroll in the country. A complicated tax structure and regular auditing means that securing the required HR and legal expertise is vital to ensuring compliance with local laws.

Taxation rules in Peru

Employers must make multiple contributions, which include giving 9% of their payroll to the National Health System (RPS). If employers offer an additional health plan, they can get a credit for part of that expense. Employers may 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 expenses. If companies operate in an industry that involves a higher risk of physical work-related incidents, they are required to offer supplementary insurance for employees.

Professionals contribute 13% of their salary to the national public pension system (ONP), or approximately 14% to the national private pension system (AFP).

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:

  • 18% of gross earnings for VAT.
  • 29.5% for corporate income tax.
  • 13% for social security.

Peru payroll options for companies

When establishing a company in Peru, it is important to consider various payroll options:

  • Peru payroll processing company: One option is working with a local payroll processing company to establish payroll on your company’s behalf. However, the employer is still liable for any inaccuracies made by the payroll processing company.
  • Internal: Larger companies may have more resources to operate internal payroll at the office of their subsidiary in Peru. However, this option can be more expensive because companies need to hire additional employees with payroll expertise.
  • G-P: It is possible to work with a global EOR provider such as G-P. We take the stress out of establishing compliant payroll in Peru as your scale your business.

How to establish a payroll in Peru

It is necessary to establish a subsidiary or choose an alternative way of setting up a legal business presence before picking a payroll option. Start by registering the name of the company with the Peruvian Public Registry, after which it will be necessary 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.

Entitlement and termination terms

The standard probationary period is 3 months. However, this can be extended up to 6 months or 1 year for management/trust positions. During the probationary period, an employer may terminate an employee without reason, as long as it is not prohibited by the constitution.

Following a probationary period, employees may be terminated with just cause, with documentation, or by mutual agreement. In general, an employer must send the employee a pre-notice letter of dismissal, and the employee has 6 calendar days to respond, or, in the case of capability, 30 calendar days to prove their capability. The employer must also provide in writing to the employee, and trade union if applicable, the dismissal decision and the reason for the dismissal.

Dismissed employees are entitled to severance pay in the amount of 50% of the regular monthly salaries for each full year of employment capped at a maximum of 12 salaries. In case of a non-completed year, this is prorated accordingly.

Streamline global payroll management with G-P.

G-P streamlines each step of the payroll management process with our market-leading Global Growth Platform™. Pay your team with confidence anywhere in the world in 150 currencies with our 99% on-time automated payroll system — all with just a few clicks. Our products also integrate with leading HCM solutions, syncing employee payroll data across platforms automatically to create one reliable, convenient source of truth for HR teams.

Contact us to learn more about how we can support you.


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.

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