Payroll in Peru: A Comprehensive Guide for 2026

Introduction

Payroll in Peru requires registering each worker with the Superintendencia Nacional de Aduanas y de Administración Tributaria (SUNAT), filing monthly Planilla Mensual de Pagos (PLAME) declarations, and withholding fifth-category income tax.

Employers must also remit Seguro Social de Salud (EsSalud) health contributions plus Administradora de Fondos de Pensiones (AFP) or Oficina de Normalización Previsional (ONP) pension deductions.

Getting any of this wrong carries real cost. Late filings or missed deposits draw fines and interest, and misclassifying a worker invites a labor audit. Much of that risk is avoidable with the right setup, whether that means an in-house team that knows the local rules, a payroll provider, or an employer of record that takes on the filings for you.

This guide walks you through each payroll phase, employer and employee taxes, contributions, gratifications, and CTS, and the leave and termination rules, so you can run payroll in Peru compliantly and decide which setup fits your team.

What are the different phases of payroll processing in Peru?

Payroll processing in Peru runs through three main phases: pre-payroll, payroll calculation, and post-payroll. Throughout all three, payroll staff keep accurate records of employee hours worked and stay current on changes in legislation and deduction rules to remain compliant.

Pre-payroll Phase

During the pre-payroll period, you'll need to focus on gathering documentation, confirming HR policies, and ensuring your business is ready to pay employees while staying compliant.

Setting up the organization

Initially, you need to set up your organization to be able to pay remote employees, set policies in place, such as leave policies, pay frequency, and attendance.

Business profile

Your company should be registered with SUNAT (National Superintendency of Customs and Tax Administration) and hold a RUC (Registro Único de Contribuyentes, or Single Taxpayer Registry) number, which you need to issue payslips, withhold taxes, and file payroll declarations.

Work location

Even if the locations are all in the same country, requirements can differ locally or regionally. Each workplace should have its own set of policies.

Leave policy

Make clear policies about leave. Employees are legally entitled to some categories of leave in Peru, including parental leave, sick leave, and paid holidays. Every employee in Peru is entitled to 30 paid days off per year for all employees who have worked at least a year at the same company, in addition to public holidays. Peru has 16 national holidays in 2026 for which employees must be paid and given the day off.

Attendance

Biometric devices can help keep track of hours worked. You'll need to document timesheets, doctor’s notices for sick leave, and supervisor permission for requested time off.

Statutory components

Account for all statutory payroll components such as income tax deductions, contributions to social security and health insurance, benefits, and everything you need to pay or provide your employees by law.

Salary components

When structuring compensation packages, make sure to be compliant with Peruvian labor laws, such as the minimum wage. Flexible benefits plans can be offered based on a policy that you set. A payroll provider in Peru, such as Skuad, can ensure compliance.

Pay schedule

The payroll frequency in Peru is monthly. Employers must pay a 13-month and 14-month salary in addition to the regular salary, paid once at the end of July and again by Christmas for a total of two bonus months’ salary.

Employee information

Gather information like employees’ DOJ, designation, department, job titles, and how they’ll receive their pay.

Payroll Calculation Phase

The main component of the process is the Peru payroll calculation phase. Data from the pre-payroll phase is now input into a system to calculate each employee's paycheck. The result is the salary paid after considering deductions, withholding, and taxes. Partnering with a payroll provider in Peru with an automated system can make this process much easier.

Most companies now run payroll through a system that calculates salaries automatically. If that is you, this phase mostly involves feeding the data gathered during pre-payroll into your payroll system, which returns the exact amount owed to each employee after deductions, withholding, and taxes.

Before you run a full cycle, it helps to know what each hire in Peru actually costs you in total, gross salary plus 9 percent EsSalud health contributions, the two annual gratifications in July and December, biannual CTS deposits, and the family allowance where it applies. Skuad's employee cost calculator gives you a full employer cost breakdown for Peru before your first payroll cycle runs.

Calculate your Peru employee cost

Post-payroll Phase

Salary payments

Once the payroll calculation is complete, you can send your bank advice to your corporate bank for salary disbursements. This is when employees will be paid.

Payroll accounting

After payments have been sent out, make sure to balance the accounts and keep track of total payroll funds spent for your records.

Payroll reporting and compliance

Deductions such as employee and employer contributions to social security must be withdrawn and remitted to the respective government agency. Due dates may vary depending on the agency.

What is payroll management in Peru?

Payroll management means keeping accurate financial records for payroll, paying employees, generating payslips, and obeying labor laws. A payroll provider in Peru, like Skuad, can automate payroll to ensure timely payment to employees, as well as automatic deductions like social security and remittance to the relevant government agency. This way, your company will be fully compliant.

What does payroll compliance in Peru involve?

Part of the process of managing payroll is making sure you are compliant with labor laws and benefits regulations, such as taxes, minimum wage, leave entitlements, and other laws. If you partner with a payroll company in Peru like Skuad, all of the compliance is taken care of to make sure you are fully in line with both foreign and domestic labor laws.

How does payroll outsourcing work in Peru?

Payroll outsourcing in Peru means handing salary calculation, tax withholding, EsSalud and pension contributions, CTS deposits, gratification payments, and monthly PLAME filings to an external provider, while your company stays the legal employer.

For companies without a local entity, this is often paired with an employer of record, which becomes the legal employer and takes on SUNAT registration and reporting. Either way, the provider runs the monthly cycle, issues compliant payslips, and remits contributions to the right agencies on schedule.

Customer story: How PureRED onboarded across six countries with Skuad

PureRED, an integrated marketing and advertising agency serving major retail and consumer brands, needed to onboard staff across the UK, Spain, Croatia, Greece, Colombia, and India, each with its own labor and payroll rules.

Skuad supported localized employment contracts, multi-currency payroll, and ongoing compliance across all six markets. The result was 65 employees onboarded with local compliance assured and payments made on time in local currencies.

"Skuad made our team expansion possible, handling the complex onboarding and payroll processes across six different countries with ease. Their local expertise ensured our compliance, letting us focus on what we do best — serving our clients."

— Brian Butcher, EVP Corporate Development, PureRED

Read the full case study

What are the main payroll components in Peru?

If you partner with payroll outsourcing in Peru, you can be sure all components will be handled by one of the Peru payroll providers.

Compensation

The minimum wage in Peru is S/1,130 (Peruvian sol) per month, in force since 1 January 2025 under Decreto Supremo 006-2024-TR

Working Hours

The working week in Peru is generally no more than 48 hours and eight hours per day.

Overtime Laws

For the first two hours worked over the regular working week, an employee must be paid a surcharge of no less than 25% in addition to their regular salary. For hours worked beyond that, a surcharge of no less than 35% must be paid.

Payroll Taxes in Peru

Taxes are a big part of payroll costs in Peru. Some taxes are deducted from employee pay, such as income tax, while others are paid by both the employee and the company, such as social security.

The Peru corporate tax rate is 29.5%.

For employees, the income tax rate in Peru (fifth category) is progressive, applied after the standard deduction of 7 UIT:

For 2026, one tax unit (UIT, Unidad Impositiva Tributaria) equals S/5,500, set by Decreto Supremo 301-2025-EF.

• Up to 5 UIT: 8%
• Over 5 to 20 UIT: 14%
• Over 20 to 35 UIT: 17%
• Over 35 to 45 UIT: 20%
• Over 45 UIT: 30%

Employee Benefits

Health and Social Security

Employers contribute 9% of the employee's salary to health insurance (EsSalud). Pension is funded by the employee, who chooses between the public system (ONP, a flat 13% of salary) or a private fund (AFP, roughly 11.5% to 13%, including the fund, insurance premium, and administration fee). The employer does not contribute to the pension.

Sick Leave

Employees in Peru are entitled to 20 days of paid sick leave per year, paid by the employer. The employee is entitled to Temporary Disability Insurance after 21 days of sick leave for a maximum of 11 months and 10 consecutive days, as long as they do no paid work.

Maternity Leave

Maternity leave, paid by social security, is 49 days of paid prenatal leave and 49 days of paid postnatal leave. For multiple births, leave is extended to an additional 30 days. If the child is born with a disability, the postnatal leave can be extended by an additional 30 days.

After the postnatal period, employees have the right to one paid hour of breastfeeding time per day.

Paternity leave

Employees are entitled to paternity leave:

• 10 consecutive paid days off must be given to fathers of a child born naturally or by cesarean birth.
• 20 consecutive paid days off must be given to fathers of a prematurely born baby or multiple births.
• 30 consecutive paid days off must be given to fathers of a child born with a congenital illness or severe disability.
• 30 consecutive paid days off must be given to fathers if the mother suffers serious complications from the delivery.

Public holidays

There are 16 national holidays in 2026 for which employees must be given paid time off, in addition to 30 days of annual leave:

• 1 Jan (New Year)
• Maundy Thursday
• Good Friday, 1 May (Labour Day)
• 7 Jun (Battle of Arica and Flag Day)
• 29 Jun (St Peter and St Paul)
• 23 Jul (Peruvian Air Force Day)
• 28 and 29 Jul (Fiestas Patrias)
• 6 Aug (Battle of Junín)
• 30 Aug (Santa Rosa de Lima)
• 8 Oct (Battle of Angamos)
• 1 Nov (All Saints)
• 8 Dec (Immaculate Conception)
• 9 Dec (Battle of Ayacucho)
• 25 Dec (Christmas)

*Dates of these holidays and observances may change based on religious calendars.

If an employee works on a non-working holiday without an extra day of rest to compensate for it, that employee must be paid the regular rate plus a 100% surcharge.

Other Laws

Termination laws

For conduct or capability dismissals, the employer must follow a procedure before terminating. The employer sends a pre-dismissal notice (preaviso) stating the cause. The worker then has a reasonable period of no less than six calendar days to respond to a conduct charge, or thirty calendar days to demonstrate capability. A resigning employee must give the employer thirty days' written notice.

Severance Pay

In Peru, severance pay is paid to employees dismissed without cause. This payment could be up to 12 months’ salary.

Running payroll in Peru means filing monthly PLAME declarations through SUNAT, depositing CTS twice a year, calculating July and December gratifications, and remitting EsSalud and AFP or ONP contributions on time, with penalties from SUNAFIL for late or inaccurate filings.

Skuad supports this on a single platform, acting as the local employer so your team can pay employees in Peru without building in-house payroll infrastructure or tracking every regulatory change.

Here is what Skuad helps with:

• Supports payroll processing in 70+ currencies with accurate tax withholding and statutory deductions
• Supports statutory contribution workflows across supported markets, covering applicable social insurance and pension obligations
• Helps administer statutory bonuses, paid leave, and severance in line with local requirements
• Supports employment contract generation across 160+ countries, aligned with local labor laws
• Helps generate compliant payslips and maintain payroll records across supported markets
• Assists with onboarding and offboarding aligned with local labor requirements

For a company hiring a handful of people in Peru, that removes the need to register with SUNAT, run electronic filings in Spanish, and track UIT and minimum wage changes each year.

Book a demo to see how Skuad supports Peru payroll end-to-end

How to Run Payroll in Peru Compliantly?

Using a payroll company in Peru can help you with all of these payroll components.

Peru payroll covers a lot at once: progressive income tax, EsSalud and pension contributions, two annual gratifications, biannual CTS deposits, and monthly PLAME filings.

Skuad supports the operational complexity of running payroll in Peru, covering income tax withholding, EsSalud and AFP or ONP contributions, July and December gratifications, CTS deposits, and PLAME filings, so your team can focus on the work, not the paperwork.

Companies across SaaS, technology, professional services, and marketing use Skuad to pay teams in Peru, stay aligned with SUNAT and SUNAFIL requirements as rules change, and scale across Latin America without setting up a local entity.

Book a demo to see how Skuad supports your first Peru hire from onboarding to payroll

FAQs

1. What does payroll in Peru involve?

Payroll in Peru involves calculating gross-to-net pay, withholding fifth-category income tax, and remitting EsSalud health contributions plus AFP or ONP pension deductions. Employers also file monthly PLAME declarations through SUNAT, deposit CTS twice a year, and pay mandatory July and December gratifications.

2. How much does payroll outsourcing in Peru cost?

Outsourcing payroll processing to a local Peruvian provider usually costs around USD 30 to 80 per employee each month. Full employer of record services that include the legal entity and compliance are generally higher, often in the low hundreds per employee per month.

3. Can a foreign company run payroll in Peru without a local entity?

Foreign companies can typically pay staff in Peru without a local entity by using an employer of record, which acts as the legal employer and covers SUNAT registration, PLAME filings, and contributions. Running payroll directly usually requires a registered entity, a RUC number, and a local bank account.

4. What happens if payroll filings are late in Peru?

Late or inaccurate filings generally trigger penalties. SUNAT applies fines, surcharges, and interest for late PLAME declarations or income tax remittance. SUNAFIL enforces labor obligations, and missed CTS deposits attract interest and fines that scale with company size, reaching into the tens of thousands of soles for larger employers.

5. Should you run payroll in-house or outsource it in Peru?

In-house payroll suits established entities with Spanish-language capacity to operate SUNAT's PLAME and T-Registro systems. Outsourcing or an employer of record generally suits companies without a local entity, transferring CTS calculations, gratifications, and pension filings to a provider familiar with Peruvian rules.

6. What is CTS in Peru payroll?

CTS, or Compensación por Tiempo de Servicios, is a mandatory severance savings fund. Employers generally deposit roughly one-twelfth of annual pay, about 9.72 percent, into an employee's CTS account twice a year, in May and November. It typically applies to private-sector staff averaging at least four hours daily.