How to Use An Employer of Record in
Peru

Peru requires all employers to contribute 9% to the national pension system (ONP or AFP) plus 9% to EsSalud for healthcare, with mandatory profit-sharing (participación en las utilidades) for companies exceeding certain revenue thresholds. An Employer of Record in Peru lets you hire employees fast and stay fully compliant without registering a local entity. The Employer of Record removes the risk of misclassifying workers under Peru's strict employment protection rules, which carry fines and back-payment liabilities enforced by SUNAFIL (Superintendencia Nacional de Fiscalización Laboral).

What Is an Employer of Record in Peru?

An Employer of Record in Peru is a third-party organisation that becomes the legal employer of your staff under Peruvian law, handling all statutory obligations, payroll, and compliance while you retain full operational control. The EOR signs the employment contract, processes monthly payroll, withholds income tax, remits social security contributions, and ensures every hire meets the requirements set out in the Ley de Productividad y Competitividad Laboral (Supreme Decree 003-97-TR). You manage the employee's daily work, performance, and deliverables.

Under Peru's employment law framework, every employment contract must include mandatory clauses covering job description, remuneration, working hours, and duration. Fixed-term contracts are permitted only for specific temporary causes defined in the law, and employers must comply with collective agreements (convenios colectivos) that apply to the sector or company. Employers also face obligations to pay gratificaciones (two statutory bonuses per year in July and December), CTS (Compensación por Tiempo de Servicios, a mandatory severance fund deposited biannually), and profit-sharing if applicable.

You retain day-to-day management, performance reviews, role scope, and strategic direction. The EOR owns payroll execution, employment contracts, statutory filings with SUNAT (tax authority) and EsSalud, compliance with SUNAFIL inspections, and termination procedures including severance calculations.

How Does an Employer of Record Work in Peru?

When you hire through an Employer of Record in Peru, the EOR becomes the legal employer while you control the employee's work. The process involves contract drafting, government registrations, payroll setup, and ongoing compliance management. Here's how it works step by step.

Step 1: Define Role and Employment Terms

You provide the job description, salary, work location, and whether the role is indefinite or fixed-term. If a collective agreement (convenio colectivo) applies to the sector or company, the EOR confirms the hire meets those minimum terms. You also specify the probation period, which cannot exceed three months for most roles or six months for management positions under Peruvian law. The EOR confirms the proposed salary meets or exceeds the Remuneración Mínima Vital (RMV), which is PEN 1,025 per month as of 2026.

Step 2: EOR Compliance Check

The EOR verifies the role classification under Peruvian employment law to ensure it qualifies as an employment relationship and not a contractor arrangement, which SUNAFIL actively polices. They confirm working time does not exceed eight hours per day or 48 hours per week, as mandated by Article 25 of the Peruvian Constitution and the Ley de Jornada de Trabajo. They also check whether the employee should be enrolled in the ONP (national pension system) or an AFP (private pension fund), which the employee chooses. Misclassification or failure to register employees correctly can result in fines from SUNAFIL and back-payment of benefits.

Step 3: Employment Contract

The EOR drafts a written employment contract in Spanish, as required by Peruvian law. The contract must include the employee's full identity details, job title and description, start date, salary and payment frequency, working hours and location, probation period (if applicable), and whether the contract is indefinite (a plazo indeterminado) or fixed-term (a plazo fijo). Fixed-term contracts are only lawful for specific temporary causes listed in Article 53 of the Ley de Productividad y Competitividad Laboral, such as project work, seasonal demand, or temporary replacement. The maximum probation period is three months for most roles, extendable to six months for management and trust positions, and must be stated in the contract from day one.

Step 4: Government Registrations

The EOR registers the employee with SUNAT (Superintendencia Nacional de Aduanas y de Administración Tributaria) for income tax withholding and issues a digital employment contract through the Planilla Electrónica (T-Registro), Peru's mandatory online payroll registry. The employee must also be registered with EsSalud (Seguro Social de Salud del Perú) for healthcare coverage and with either the ONP or an AFP for pension contributions, based on the employee's choice. These registrations must be completed before or on the employee's first working day. Late or missing registrations can trigger penalties from SUNAFIL, including fines and potential suspension of business operations.

Step 5: Payroll in Local Currency

The EOR processes payroll in Peruvian Soles (PEN) on a monthly basis, which is the standard pay cycle in Peru. They calculate and withhold income tax (Impuesto a la Renta de Quinta Categoría) using the progressive rates published by SUNAT, with brackets starting at 8% for annual income above PEN 33,950 (2026 threshold) and rising to 30% for income over PEN 195,250. The EOR remits withheld tax to SUNAT by the deadline, typically the middle of the following month via the Virtual Tax Form 621 (PDT Planilla Electrónica - PLAME). They also deduct the employee's pension contribution (around 13% for AFP or 13% for ONP) and any applicable union dues if the employee is unionised.

Step 6: Ongoing Compliance

The EOR files the monthly Planilla Electrónica (PLAME) declaration with SUNAT, reporting all payroll, contributions, and withholdings by the legal deadline (usually the 15th of the following month). They pay employer contributions: 9% to EsSalud for healthcare, submit biannual CTS deposits (May and November) to the employee's chosen bank account (equivalent to one month's salary per year), and pay gratificaciones in July and December (one month's salary each time). If your company exceeds the revenue thresholds, the EOR calculates and distributes profit-sharing (participación en las utilidades) based on the sector-specific percentages set by law. They also ensure compliance with any applicable collective agreements and respond to SUNAFIL inspections, maintaining all employment records in the Planilla Electrónica system.

Step 7: Termination

Termination in Peru requires just cause unless you agree on a mutual termination or pay severance in lieu of notice. Just cause is governed by Article 22 (employee misconduct) or Article 23 (employer-related causes) of the Ley de Productividad y Competitividad Laboral, and dismissal without lawful cause exposes you to a claim for reincorporation or severance at 1.5 times the standard rate. Notice periods are not mandated by statute for indefinite contracts, but collective agreements or the employment contract may require notice. The EOR calculates and pays any owed severance, accrued vacation, pending gratificaciones, and CTS withdrawal. They issue the final payslip, complete the termination declaration in the Planilla Electrónica, and provide the employee with a Certificate of Work (Certificado de Trabajo) and a CTS withdrawal letter.

Employment Laws and Compliance an Employer of Record Handles in Peru

When you hire through an Employer of Record in Peru, they assume full legal responsibility for employment compliance so you don't need to establish an in-country HR function or navigate Peruvian labour law yourself. The EOR ensures every statutory obligation is met, on time, under the oversight of SUNAFIL, SUNAT, and EsSalud.

• Employment Contracts: Every hire requires a written contract in Spanish specifying job title, salary, working hours, probation period, and contract type (indefinite or fixed-term). Fixed-term contracts are only lawful for the temporary causes listed in Article 53 of the Ley de Productividad y Competitividad Laboral, and unlawful use results in automatic conversion to an indefinite contract. The EOR drafts, registers, and updates contracts in the Planilla Electrónica to avoid SUNAFIL fines and employee claims.
• Payroll Tax and Income Tax Withholding: Employers must withhold Impuesto a la Renta de Quinta Categoría (fifth-category income tax) using SUNAT's progressive brackets, starting at 8% for annual income above PEN 33,950 and rising to 30% for income exceeding PEN 195,250. The EOR calculates withholding monthly, remits payments to SUNAT by the deadline (typically mid-month following payroll), and files the PLAME declaration. Late or incorrect filings trigger penalties, interest, and audits.
• Social Security and Pension Contributions: Employers pay 9% of gross salary to EsSalud for healthcare coverage. Employees contribute approximately 13% to either the ONP (state pension) or an AFP (private pension fund), which the employer deducts and remits. The EOR registers employees with the correct system, files monthly declarations, and ensures timely payment to avoid fines from SUNAT and loss of healthcare coverage.
• Statutory Leave and Holidays: Employees accrue 30 calendar days of paid annual leave after one year of service, governed by Legislative Decree 713. Peru has 12 public holidays, including Fiestas Patrias (July 28-29), and employees working on public holidays must receive double pay or a compensatory day off. The EOR tracks accrual, approves leave in line with Peruvian law, and ensures accurate payment of holiday premiums.
• Termination and Severance: Dismissal without just cause under Articles 22 or 23 of the Ley de Productividad y Competitividad Laboral entitles the employee to severance of 1.5 times monthly remuneration per year worked or reinstatement. The EOR manages the termination process, calculates severance and all final payments (CTS, vacation, gratificaciones), and ensures the dismissal is documented in the Planilla Electrónica. Failure to follow procedure can result in labour court claims and damages.
• Working Time Regulations: The standard workweek is 48 hours (eight hours per day, six days per week) under Article 25 of the Constitution and the Ley de Jornada de Trabajo. Overtime is paid at 125% for the first two hours and 135% thereafter, and employees are entitled to at least 24 consecutive hours of rest per week. The EOR monitors working hours, calculates overtime premiums, and maintains time records to comply with SUNAFIL inspections.
• Health and Safety: Employers must comply with Ley de Seguridad y Salud en el Trabajo (Law 29783) and maintain a workplace safety committee if they employ 20 or more workers. Annual medical exams and risk assessments are mandatory. The EOR registers the company with the Sistema Informático de Notificación de Accidentes de Trabajo, implements safety protocols, and ensures all required documentation is available for SUNAFIL audits.
• Data Protection and Employee Privacy: Peru's Personal Data Protection Law (Law 29733) governs the processing of employee personal data, enforced by the Autoridad Nacional de Protección de Datos Personales. Employers must obtain consent, maintain a registry of personal data banks, and implement security measures. The EOR ensures payroll and HR data is processed lawfully, files the required declarations, and safeguards employee information against unauthorised access.
• Collective Agreements: If a collective agreement (convenio colectivo) applies to the company or sector, it supersedes the statutory minimums on wages, leave, and working conditions. Non-compliance with collective agreements can lead to union disputes, strikes, and SUNAFIL enforcement. The EOR identifies applicable agreements, ensures all terms are reflected in contracts and payroll, and monitors for changes negotiated at sector or company level.
• CTS and Gratificaciones: Employers must deposit Compensación por Tiempo de Servicios (CTS) biannually in May and November, equivalent to one-twelfth of annual remuneration per month worked, into a bank account chosen by the employee. Gratificaciones (bonuses) must be paid in July and December, equal to one month's salary each time. The EOR calculates, deposits, and reports CTS and gratificaciones to SUNAT via the PLAME system, and failure to pay on time incurs interest and fines.

How Much Does It Cost to Use an Employer of Record in Peru?

The total cost of hiring through an Employer of Record in Peru has two components: the EOR service fee and the statutory on-costs mandated by Peruvian law. Statutory on-costs are fixed percentages of gross salary and apply to every employer in Peru, whether you use an EOR or operate your own entity. Playroll's EOR service fee starts from $399 per employee per month and is billed separately from payroll. The service fee covers contract drafting, payroll processing, government filings, compliance monitoring, and ongoing employment law support.

Let's look at an example that includes a base salary and the EOR service fee.

The EOR service fee covers all employment contract drafting and updates, monthly payroll processing in PEN, SUNAT and EsSalud filings via the Planilla Electrónica, ongoing compliance with Peruvian employment law including changes, and support for employee queries and terminations. You pay the statutory on-costs and the EOR fee separately, giving you full transparency over employer costs.

Employer of Record vs Setting Up an Entity in Peru

If you want to hire in Peru, you can use an Employer of Record or establish your own local entity. Most foreign companies choose to incorporate a Sociedad Anónima Cerrada (S.A.C.), a closed corporation that requires at least two shareholders and minimum share capital of PEN 1,000. Registration involves notarising articles of incorporation, obtaining a RUC tax number from SUNAT, publishing the incorporation in the official gazette El Peruano, and registering with the local municipality for operating licenses. The process typically takes 8 to 12 weeks and costs between $3,000 and $6,000 in legal, notary, and registration fees, not including ongoing accounting and legal counsel.

For companies hiring fewer than 10 employees in Peru, an Employer of Record is almost always the faster and more cost-effective route.

Playroll also supports your long-term growth through its Global Entity Setup product, which handles entity incorporation and local payroll in 120+ countries: so you can transition from EOR to your own compliant entity in Peru when the time is right, without switching providers or rebuilding your HR processes.

How Long Does It Take to Hire Someone in Peru Through an Employer of Record?

The typical timeline to onboard an employee in Peru through an Employer of Record is 7 to 12 business days from contract signature to the employee's first working day.

• Stage 1: Contract preparation and signing (2 to 3 business days): The EOR drafts the employment contract in Spanish, including all mandatory clauses under Peruvian law (job title, salary, working hours, probation period, contract type). You review and approve the terms, and the employee signs. Timing depends on how quickly you and the employee return the signed documents and provide required identity and tax information.
• Stage 2: Government registrations (3 to 5 business days): The EOR registers the employee with SUNAT for income tax withholding, EsSalud for healthcare coverage, and the employee's chosen pension system (ONP or AFP) via the Planilla Electrónica (T-Registro). These registrations must be completed before or on the employee's first day of work. Delays in registration can result in SUNAFIL fines and expose your company to penalties for non-compliance.
• Stage 3: Payroll configuration and first cycle (1 to 2 business days): The EOR configures the employee in the payroll system, setting up salary, deductions for income tax and pension contributions, and employer contributions (EsSalud, CTS, gratificaciones). Payroll in Peru runs monthly, and the first payslip arrives at the end of the employee's first full month of work. Setup runs in parallel with government registrations.
• Stage 4: Peru-specific requirements (1 to 2 business days): If the role is subject to a collective agreement (convenio colectivo), the EOR verifies compliance with sector-specific terms, which may include additional leave, bonuses, or union reporting. This step typically runs in parallel with contract drafting but can add time if the agreement requires consultation with a union representative or additional documentation.

The timeline can extend if the employee does not provide complete identity documents (DNI or passport), tax identification (RUC if applicable), or pension fund choice, or if the role is fixed-term and requires documentation of the lawful temporary cause under Article 53 of the Ley de Productividad y Competitividad Laboral. Public holidays or delays in SUNAT or EsSalud processing can also push the timeline by 2 to 3 business days.

By comparison, establishing a Sociedad Anónima Cerrada (S.A.C.) and hiring your first employee through your own entity typically takes 8 to 12 weeks from incorporation to first payroll.

How Playroll's Employer of Record Process Works in Peru

Playroll's Employer of Record service in Peru is built for speed and compliance, letting you hire employees without the cost or delay of setting up a local entity.

1. You define the hire

You tell us who you want to hire, the role, salary, and whether the contract is indefinite or fixed-term. We confirm the terms meet Peru's Remuneración Mínima Vital (PEN 1,025 per month) and check if a collective agreement applies.

2. We prepare a compliant contract

Playroll drafts a written employment contract in Spanish under the Ley de Productividad y Competitividad Laboral, including all mandatory clauses: job title, remuneration, working hours, probation period (maximum three months or six for management roles), and contract type. We register the contract in the Planilla Electrónica before the employee starts work.

3. Employee onboarded and payroll goes live

We register the employee with SUNAT for income tax withholding, EsSalud for healthcare, and their chosen pension system (ONP or AFP) within 5 to 7 business days. Playroll processes monthly payroll in Peruvian Soles, withholds income tax and pension contributions, and files the PLAME declaration with SUNAT by the legal deadline.

4. Ongoing compliance and growth support

Playroll manages all statutory filings, deposits CTS biannually, pays gratificaciones in July and December, and ensures compliance with working time, health and safety, and SUNAFIL inspections. As your team grows, we can support your transition from EOR to your own entity through our global entity setup service, which handles incorporation and payroll setup in Peru without switching providers.