Hiring in Peru

The terms set out role, salary in PEN, working time, leave, probation and any restrictive covenants. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Spanish is the standard contract language, and bilingual versions are common for international employers.

Fixed-term contracts need a specific statutory cause and are capped at five years in total. Misuse converts them to indefinite terms, so most EORs default to indefinite contracts.

Set probation from day one. An extension needs the employee's agreement and a role that qualifies for it.

Probation is the only window in which an exit needs no just cause, which matters more here than in most markets. Ask how the EOR handles it before you agree a start date.

Overtime is paid at a 25% premium for the first two hours a day and 35% beyond that, and it must be voluntary on both sides.

Senior professional hires often sit outside the limits, so overtime becomes a contractual matter rather than a statutory one. Put the position in writing either way.

The statutory 30 days is already generous by regional standards, so market practice rarely goes further and the statutory figure is the one to budget. Leave not taken within the year after it accrues triggers a penalty of an extra month's pay.

The employer pays the first 20 days of sick leave each year, after which the national health insurer (EsSalud) pays a subsidy. Maternity leave runs 98 days and is funded by EsSalud, while 10 days of paternity leave are paid by the employer, so confirm how the EOR handles the reimbursements.

There is no right to terminate on notice or pay in lieu. Dismissal for cause follows a formal procedure, with a pre-dismissal letter giving the employee at least 6 calendar days to respond, or 30 for poor performance.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, unused leave, pro-rated bonuses and any CTS accrued since the last deposit. Courts can order reinstatement where a dismissal has no valid cause, which is why most exits are negotiated as mutual separations with a payment on top.

Group life insurance (Vida Ley) is mandatory from the first day of work. Private health cover through an EPS is standard for professional roles even though it is not mandatory.

EORs often bundle benefits through a group scheme. Ask what is included in the fee, what is billed on top and whether statutory profit sharing, which applies to employers with more than 20 staff, reaches your hires.

Employer health contributions (EsSalud) add 9% on top of gross salary. With the bonuses and CTS included, statutory costs reach roughly 35 to 40% of salary, before the EOR fee.

Tax residency is the trap. A foreign employee is taxed at a flat 30% until they have spent more than 183 days in Peru in a 12-month period, and the progressive rates only apply from the following 1 January, so model first-year net pay carefully.

Ask whether the EOR sponsors directly or refers to a partner. A partner-model EOR often cannot sponsor at all, and the caps of 20% of headcount and 30% of payroll for foreign workers apply to the sponsor, not to you.

Set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. Cross-border transfers need a lawful basis and adequate safeguards, and must be notified to the data protection authority.

Ask where payroll data is hosted and who in the partner chain can see it.

Incorporation here takes several weeks, and the running cost is the real consideration: a locally resident legal representative, at least two shareholders, monthly tax filings, electronic books and payroll software set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.