Peru is a Latin American economy with a workforce of over 32 million people. If you’re looking to hire Peruvian employees or send staff to work in Peru, it’s important to understand how Peru’s tax system works. Peru uses a unitary national tax system; almost all major taxes are levied and administered at the national level by the Superintendencia Nacional de Aduanas y de Administración Tributaria (SUNAT), the national tax authority. 

All personal and corporate income taxes are centralized in Peru; there are no state or provincial income taxes. The Impuesto a la Renta (Income Tax Law) covers personal and corporate taxes. Individuals are taxed progressively on their worldwide income as residents, while non-residents are taxed at a flat rate on Peruvian-sourced income.

The most important obligations for employers doing business in Peru are payroll-related contributions and income tax withholding. You can ensure your Peru operations remain fully compliant and cost-effective as an employer by learning the basics and leveraging local expertise discussed in this guide.

So, let’s get to it.

What is Payroll Tax in Peru?

Payroll taxes in Peru help fund workers’ retirement pensions and medical care. In Spanish, these payroll contributions are known as aportaciones or contribuciones to the Sistema Nacional de Pensiones (public pension fund) and EsSalud (national health insurance). 

Employer Contributions

Employers contribute 9% of each employee’s gross salary to EsSalud. If they provide a private health plan (EPS), the rate can rise to ~9.75%. 

About 9.72% of annual salary must be deposited into a severance fund (compensation for length of service), usually split between May and November. Only private-sector employers with more than one month of employment and averaging at least 4 hours of work per day are required to pay CTS.

Two additional salaries per year (13th and 14th month) in July and December. These bonuses are exempt from the 9% EsSalud contribution. Instead, the employer must pay an extra 9% “extraordinary bonus” directly to the employee, along with each bonus, as compensation.

10% of the monthly minimum wage for family allowance per child under 18. The minimum wage in Peru is currently PEN (Peruvian Sol) 1,130 per month (as of January 2026), so the allowance is about PEN 113 per month per child.

Life Insurance (Seguro de Vida Ley) is mandatory. As of a 2020 law reform, this insurance must be provided from the first day of employment (previously it was after the fourth year). 

Work Risk Insurance (Seguro Complementario de Trabajo de Riesgo) is required for high-risk industries such as mining and construction; premiums vary by sector. Taken together, employers usually spend about 18%–20% on top of gross salaries in mandatory payroll contributions and benefits.

Employers must also register each worker in the electronic payroll system (planilla electrónica) and ensure all social contributions and taxes are paid on time. Failing to enroll a worker or late payment of contributions can lead to fines, so companies need to be diligent in fulfilling these duties.

Employee Contributions

Employees pay around 13% of their salary into either the National Pension System (ONP) or a Private Pension Fund (AFP). AFP contributions include ~10% for the retirement fund, plus insurance and admin fees.

Employers cover healthcare, severance, bonuses, and insurance, while employees cover retirement and personal income tax.

Want to understand what Peruvian employees expect? Explore the essential benefits you need to offer.

Between calculating the right withholdings, depositing contributions to SUNAT/EsSalud/ONP, and tracking bonuses and allowances, there are many moving parts in managing payroll in Peru. Many foreign companies choose to outsource payroll services to local experts. 

Remote People acts as your on-the-ground partner to handle wage calculations, payslips, and all monthly filings in line with Peruvian regulations. Our team ensures that all contributions are correctly computed and paid on time, relieving you of the complicated paperwork and reducing the risk of compliance errors.

For a quick way to estimate employment costs in Peru, you can also use the Remote People Global Payroll Calculator. Input a gross salary, and the tool will output the expected employer contributions and employee take-home pay after Peru’s taxes. This gives you a clear picture of the true cost of hiring a Peruvian employee. 

Income Tax in Peru

Income tax in Peru applies to an individual’s earnings, not just salaries, but potentially business profits, investment income, and other taxable income. Personal income tax rates range from 8% to 30%, applied in bands of income. Foreigners working in Peru become tax residents after ~6 months; until then, they are non-domiciled. 

Personal Income Tax

Non-resident employees are taxed at a flat 30% rate on any income earned in Peru, with no exemptions or brackets. Once they become residents, they switch to the progressive rate system with thresholds and can enjoy the tax-free allowance. 

Peru’s income tax is expressed in tax units (UIT, Unidad Impositiva Tributaria), set by the government each year to adjust for inflation. As of 2025, one UIT is PEN 5,350. The UIT was PEN 5,150 in 2024. The first 7 UIT of annual income (5,350 × 7) are exempt from income tax for individuals. 

After that, the following rates apply on the excess:

Bracket Taxable Income Range (in UIT) Taxable Income Range (PEN) Marginal Tax Rate (%)
First Up to 5 UIT Up to PEN 25,750 8%
Second Over 5 UIT to 20 UIT PEN 25,751 to PEN 103,000 14%
Third Over 20 UIT to 35 UIT PEN 103,001 to PEN 180,250 17%
Fourth Over 35 UIT to 45 UIT PEN 180,251 to PEN 231,750 20%
Fifth Over 45 UIT Over PEN 231,750 30%

The tax calculation also allows each individual up to 3 additional UIT of deductions if the individual has receipts for expenses such as rent, professional services, or contributions to social security of independent workers. It’s an incentive that is claimed at year-end. 

Employers account for the standard 7 UIT annual deduction when withholding tax from monthly salaries. The employee claims the additional 3 UIT deduction when filing their annual tax return (since it depends on personal spending receipts).

Business Income Tax

Dividends received by individuals from Peruvian companies are subject to a 5% withholding tax at source, which is a final tax. For non-residents, Peruvian-source capital gains are usually taxed at 30% flat. While the focus is on employment income, it’s good for employers and expat employees to know Peru’s taxes on other income types. If you or your employees have additional income streams, those may need to be reported in the annual Peru tax return.

Withholding and remitting income tax can be significantly easier with expert support. But first, you need to hire the right employees. Remote People’s International Recruitment Agency helps employers to source and onboard Peruvian talent efficiently and compliantly. This service ensures hiring processes adhere to local regulations while matching you with skilled professionals suited to your needs. 

After onboarding, our Peru Professional Employer Organization (PEO) handles every aspect of payroll and tax compliance. If you’ve already established a business in Peru, our PEO service steps in as a co-partner, processing income tax, social contributions, and statutory bonuses and ensuring all filings are made accurately and on time. PEO takes the admin burden off your plate and lets you remain focused on your core business operations.

Industry-Specific Taxes and Profit Sharing

Peru’s tax system includes special rules that depend on company size and industry. The most important is the compulsory profit-sharing scheme, Participación en las Utilidades. This law requires any company with more than 20 employees that earns taxable income in a fiscal year to share part of its pre-tax profits with its workers.

The share of profits is not the same for every business. For example: 

  • Companies in the fishing, telecommunications, and industrial sectors must distribute 10% of their pre-tax profits. 
  • Companies in mining, wholesale and retail trade, and restaurants must share 8%. 
  • Companies in all other sectors must share 5%.

The law also sets rules for how employees receive their share. Half of the total fund is divided according to the number of days each employee actually worked during the year. The other half is divided based on each worker’s annual salary, which means higher earners receive a larger portion.

Employer of Record in Peru

Setting up a business in a new country is no small feat. You must comply with local labor laws, register for taxes, run payroll, and manage benefits according to Peruvian regulations. A Peru Employer of Record (EOR) service is the best solution for companies that want to hire employees in Peru without establishing a legal entity locally. 

An EOR becomes the legal employer for your staff in Peru, handling all payroll, tax, and HR compliance on your behalf, with no need to pay registration fees and corporate taxes. 

How Remote People’s Peru EOR service works: 

  • We hire employees, draft employment contracts, register with SUNAT and social security, and ensure all contributions and taxes are paid. 
  • We manage payroll processing, income tax withholding, social security contributions, and statutory benefit payments for your employees.

Remote People already has a fully compliant entity in Peru authorized to employ staff. This also means you won’t incur corporate income taxes in Peru, since you’re not operating a profit-generating entity there – you are simply using our service to employ people. The employment costs (salary, employer contributions, service fee) are invoiced to you, and you pay them as a business expense.

This EOR model is especially useful for companies testing the market or with small teams in Peru. Some of the benefits: 

  • You can onboard an employee in Peru in a matter of days, rather than spending months setting up a company and obtaining all the registrations. 
  • Remote People stays up-to-date with all Peru tax and labor law changes, and we adjust payroll in real time.

At just $199 per employee per month, an EOR can set your business up and without needing to become experts in Peruvian tax law. With local experts at your beck and call, you can rest assured you will avoid fines or penalties caused by missed or late registrations, late or incorrect tax filings, and employee misclassification (full-time employees or contractors). 

Start fast, easy, and correctly. Contact Remote People now!