Employer of Record Peru
Infotree Global Solutions assists organizations planning for expansion in Peru by providing employer of record services in Peru. If you wish to recruit professionals in Peru, you can easily accomplish it with us without even having an establishment in Peru. Our team of dedicated professionals would take up all the recruitment and payroll management responsibilities for your organization. From searching for ideal employees to hiring and onboarding them, we take every step on your behalf with total compliance.
Our Peru employer of record would give you insights into the compensation, benefits, and facilities required for your employees in Peru. Here are some of the important factors you need to know before you start hiring in Peru:
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Hiring in Peru
Peru offers ample opportunities for organizations to expand their business and enjoy growth. However, companies need to understand and follow the work culture as well as business etiquette of Peru if they want to streamline the hiring process. It is recommended to be aware of the legal procedures to avoid discrepancies.
Joining hands with an Employer of Record Peru can make a difference and ease off your compliance worries. To enhance competitiveness, the Peruvian government has introduced structural reforms which help in encouraging foreign participation in the country. The constitution of Peru does not encourage any sort of employment discrimination be it gender, religion, or race during the hiring process and thereafter. Employers are not allowed to ask questions about family status, background, and economic status from an employee as it might lead to discrimination. Being your employer of record Infotree Global will assist you in onboarding talent compliantly.
Employment Compliance
Employment in Peru needs to be documented. It should include all the relevant details of employment like salary, working hours, benefits, and all. They should be written in the Spanish language and use the Peruvian sol as currency. Fixed-term contracts in writing are allowed for five years. These are required to get registered with the Labour Ministry.
Working hours – In Peru, an employee is required to work six days a week. He can devote 8 hours a day and 48 hours total in a week. Overtime is paid usually 1.25x to the normal salary.
Compensation – An employer needs to pay a minimum amount of 930 Nuevo Soles (PEN)PEN850 to its workers in Peru. It is better to check with your Employer of Record in Peru to learn more about the compensation.
Probationary Period – The country has a provision for a 3-month probation period which may extend up to one year. The standard period needs to be mentioned in the employment contract. An employee during this period has temporary employment, however, the employer reserves the right to dismiss him without stating the cause.
Bonuses – An employer requires to pay a bonus to his staff twice a year. One is on Christmas when many employers already have a bonus plan for employees. 2 nd -time bonus is paid on the 1st of July, which signifies Peru’s Independence Day. The bonus amount is equal to a monthly salary of an employee.
Employees are also entitled to a special bonus of 9% of their statutory bonus received in July and December. However, the bonus percentage may vary based on their work industry. Employers with more than 20 employees are required to share profits among their employees. Profits from retail, wholesale, mining, and restaurants are shared at a rate of 8%. Companies dealing in fishing, manufacturing, and telecommunications have a split 10% of their income, while the other companies share 5%. Hiring Infotree Global as your Employer of Record can help you with all the required professional assistance on bonuses and benefits.
Termination and Severance – An employer cannot terminate an employee without having enough ground. There should be a valid reason which should be lawful like involvement in violent acts, drug consumption, damaging office property, or incompetency to perform duties. A 6-day statutory notice period in writing stating the cause of dismissal should be given to the employee to respond. In case of employee incapability at work, he should be given a 30 days notice period to prove his capabilities and worth. For termination without proper cause, the employees are generally entitled to a severance payment of around one and a half months of pay for every year of service, up to one year of pay. Your Peru Employer of Record will help you manage it compliantly.
Employee Entitlements
Most foreign investors face the challenge to understand the employment laws in Peru. Compensation and benefits are two of the most critical parts of any contract or offer letter negotiation. In Peru, while negotiating the terms of a contract with employees, you need to pay even closer attention to compensation and benefits laws to make sure you meet the statutory minimums. Infotree Global as your Peru employer of record can support you with your organization’s benefits strategy and help your company succeed.
Maternity leaves – In Peru female employees are entitled to 14 weeks of paid maternity leave. Maternity leaves can be available 7 weeks before the birth and 7 weeks holiday after the birth.
Vacation – Employees in Peru are entitled to avail of 30 days of paid vacation leaves per year.
Sick Leave – All Employees in Peru are entitled to avail themselves of at least 5 days of paid sick leave annually.
Health Benefits – Peru does have a public healthcare system, but still, most people do prefer to use private services. An employer is required to provide health benefits to his employees in Peru. Country employment laws have a public health insurance service, known as ESSALUD for all the staff and their families. An employer requires to contribute 9% of the worker’s salary to the public health service. Being your Peru employer of record, we help you understand the health benefits and arrangements.
Pension Benefits – According to country Labour laws, workers are eligible to opt for the National Pension Scheme or can join a Private Pension Plan. An employee is entitled to a pension of 13% of his salary.
Paternity Leaves – Employees who are new fathers are entitled to avail of a paternity leave of up to 10 days.
Payroll and Tax in Peru
Setting up payroll requires a sound understanding of the country’s compliance and taxation rules. To set up payroll, employers can choose from a remote, payroll company, an internal, or an Employer of Record Peru. Remote payroll is suitable for businesses that need to process one payroll among multiple locations. A local payroll processing company takes care of everything and processes payroll on your behalf. Established companies can opt for internal payroll which comes as an expensive option because you would require to hire the payroll processing staff. Besides, you can hire Infotree Global which works as your Employer of Record and helps you set up payroll with compliance.
Taxation
Peru follows a progressive taxation system with a tax slab ranging from 8% to 30%. The corporate income tax is levied at the charge of 29.5%. When it comes to the payroll tax, there is no payroll tax in the country. Expat employees staying in Peru for not more than 183 days need to pay 30% income tax. VAT is 18% of gross income.
Employers are required to contribute 9% of salaries to the National Health System (IRS). If a company provides its staff with private insurance, it can get credit for some of those costs. Employers should also contribute an average of 11.5 percent of their staff’s gross salaries to pension fund administrators (AFPs), private entities that manage pension funds that provide employees with retirement plans, disability pensions, and funeral expenditure coverage. Besides, few employers require to pay for workplace accident insurance. Employees need to contribute 13% of their salary to the national pension system, or they can opt for a private pension plan. Hiring an Employer of Record can help you in multiple ways.
Challenges When Expanding into Peru
Organizations planning to expand their business operations in Peru may come across a host of challenges. These include financial, legal, compliance, registration, country labor laws, and employee contracts. However, it is always advisable to hire a Peru Employer of Record to mitigate the challenges that may occur later. The demand for knowledge staff is constantly on the rise around the world. These workers ask for a higher salary due to their skill sets. However, the average salary in Peru is USD 2115 for IT professionals, USD 2146 for finance & accounting, and USD 2357 for marketing. The employment laws in Peru are applicable to foreign nationals as well as citizens. Because an Employer of Record has sound knowledge of relevant labor laws, you will get all the required consultation at any step. It helps you gain peace of mind knowing that your organization is complying with all local regulations.
Benefits of Peru Employer of Record
To simplify your expansion process let Infotree Global assist you to deal with all the complexities. Be it hiring employees or distributing payroll or taking care of expenses, we are there to assist you at every step. Partner with us and start your global business without worries.
Market Access – Relying on the professional expertise of an Employer of Record is the best way to enter an unknown market quickly. By using Employer of Record services, an international organization can avail the expertise of Peru employees to work for its company. Besides quick access to the Peru market, the EOR also enables the client to ease off worries related to payroll and HR.
In Country Laws – It is hard to ignore the importance of regulations and compliance in a foreign country. If you are operating a business in Peru you need to be well aware of the payroll and taxation rules. With Peru Employer of Record services, a company can hire a foreign individual or local employees and deal with the complexities of the country’s rules. Be it income tax, social security contribution, expanse management, withholding charges, or business tax, an EOR company takes care of it all with total compliance.
Diverse Solutions – No matter whether you already have a company in an international location or you are going to establish one, an employer of record can help you significantly. The EOR Company can hire staff on your behalf without having the need of setting up a branch in Peru. If your company is already operating, using EOR for managing payroll tasks can be a great idea as they can present an effective solution to tax and accounting responsibilities in the country.
Why Infotree Global Solutions?
Ensuring total compliance with employment laws comes as a major concern for many companies. The complications of laws make it vital to use Peru Employer of Record services. Right from the drafting of local contracts for workers, we take care of the onboarding and fulfill all the legal formalities for the new country.
Our core objective is to ensure that you can make the most of mobility without a legal entity. Focusing on employee satisfaction, we are committed to delivering increased productivity and high efficiency. Our EOR model is designed in a way that provides you with everything you need at every step of your global expansion journey. Candidates are mobilized in-country quickly, saving you time, energy, and resources. Our dedicated personal support ensures a stress-free transition for employees around the world. Besides, you will also retain complete control over your employees and their day-to-day tasks. That too, without engaging yourself in the administrative hassles because we overcome them for you.
Make the most of our professional services and overcome the challenges associated with international hiring. For Peru Employer of Record details and demo contact us today!