An employer of record in Peru employs your hire through a Peruvian entity, runs payroll in soles, and administers a statutory calendar that is unusually deposit-driven: two extra monthly salaries a year as gratificaciones in July and December, semi-annual CTS severance-fund deposits in May and November, an employer health contribution of 9% to EsSalud, and 30 calendar days of paid vacation. Pensions, by contrast, are employee-funded, which changes the cost arithmetic in the employer's favour. The figures below come from published Peruvian payroll and employment guides; contracts and current law control, and nothing here is legal advice.
What an EOR does in Peru
A compliant Peruvian EOR issues the employment contract, registers the employment with the authorities, and runs the monthly cycle: salary, the employer's EsSalud health contribution of 9% of total gross remuneration with no employee share, and the withholding of the employee's pension contribution, either to a private AFP at around 13% of gross salary including fund, insurance and commission elements, or to the public ONP at 13%, with the employer contributing nothing to pensions in either system. It files the monthly PLAME electronic payroll declaration through the tax authority SUNAT, on a deadline staggered by the employer's taxpayer number in the second half of the following month. For a buyer without a Peruvian entity, that filing and deposit machinery is what the fee buys.
The deposit calendar: gratificaciones and CTS
Peru's statutory extras arrive on fixed dates. Gratificaciones are two additional payments, each equal to one month's gross salary, due by 15 July and 15 December, and since 2011 they are exempt from EsSalud contributions and pension deductions, so they land close to gross. CTS, the compensation for time of service, is a separate severance savings mechanism: the employer deposits half a month's remuneration by 15 May and again by 15 November into a bank account the employee chooses, with the calculation base including basic salary plus one-sixth of the annual gratificaciones. Together these mean an annual cost of roughly 15 monthly salaries plus contributions before the EOR fee, and a quote that shows only 12 salaries is understating the year by a wide margin.
Working time, vacation and termination
The standard working week is 48 hours, typically eight hours over six days, with overtime premiums starting at 25% above the regular rate for the first two hours and 35% thereafter. Vacation is 30 calendar days after a year of service, among the longer entitlements in the region. Dismissal requires valid justification under Peruvian labour law, and unjustified termination carries severance that published guides place in the range of one to two months of salary per year of service depending on contract and circumstances, which makes documented performance management and correctly drafted fixed-term contracts more valuable than in at-will jurisdictions. The CTS account the employee has been accumulating exists precisely to cushion unemployment, but it does not replace the employer's severance exposure.
What to check in a Peruvian EOR provider
Confirm the provider employs through a Peruvian entity and files PLAME with SUNAT on time, and ask for the cost build-up in writing: gross salary, EsSalud at 9%, the two gratificaciones and two CTS deposits accrued monthly, and the fee as separate lines. Ask which pension system the employee elects, AFP or ONP, and confirm the provider operates the withholding correctly since the systems differ in structure. Ask how the July, December, May and November deposit dates are funded, because four statutory payment spikes a year is a cash-flow pattern the invoicing should smooth. Finally, ask how the provider documents cause and manages the exit process, since justification requirements make Peruvian terminations a matter of records built long before the decision.
Questions people ask about employer of record peru
What are gratificaciones in Peru?
Two mandatory additional payments, each equal to one month's gross salary, due by 15 July and 15 December. Since 2011 they are exempt from EsSalud contributions and pension deductions, and they accrue pro rata for partial service periods.
What is CTS and when is it deposited?
Compensation for time of service: a severance savings deposit of half a month's remuneration made by 15 May and by 15 November into a bank account the employee chooses, calculated on basic salary plus one-sixth of the annual gratificaciones.
What does an employer contribute in Peru?
The visible statutory line is EsSalud at 9% of total gross remuneration, with no employee share. Pensions are employee-funded: AFP contributions around 13% or ONP at 13% are withheld from the employee's pay, with a 0% employer pension contribution in both systems.
How much vacation do Peruvian employees get?
30 calendar days of paid vacation after completing one year of service, alongside a 48-hour standard working week with overtime premiums of 25% for the first two extra hours and 35% beyond.