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Hiring international employees can be an attractive option for growing companies. Countries like Peru offer more cost-effective skilled talent than the US and Canada along with other benefits.  

While salaries are important, there are many other costs to keep in mind when it comes to global hiring. For example, employers are typically required to make mandatory social security contributions. They may also provide staff with additional benefits like healthcare when competing for top talent. 

This article will walk you through the fixed and variable costs of hiring in Peru

Costs to Consider When Hiring Around the World

The basic hiring costs in Peru include: 

  • Employee’s gross salary 
  • Taxes and benefits
  • Vacation pay and other leaves 
  • Overtime pay 
  • Severance pay 


Plus, you may want to add certain optional costs like benefits, bonuses, and extras. 

Mandatory Costs of Hiring an Employee in Peru 


Peru offers an increasingly educated workforce with many new graduates in key industries like engineering and technology. A remarkable tech talent pool makes Peru an excellent nearshoring destination for software developers and other IT specialists. 

The minimum wage in Peru is PEN 1,025 per month (about USD 278).  

However, salaries for skilled workers and sophisticated IT talent will vary greatly. You can get an idea of average salaries by doing some market research or partnering with a local staffing agency. 

Mandatory Taxes and Benefits 

Payroll costs in Peru add up to 9% of the employee's gross salary, which goes towards the National Health Insurance Scheme. Employers must also offer private life insurance coverage after four years of service. 


Employers and employees both contribute to taxes and funds. So, employers must also withhold: 

  • 8-30%: Personal Income Tax
  • 12-13%: Pension Fund 
  • 2.25%: Health Insurance (voluntary)

Mandatory Bonuses  

Like in many other countries in the region, employers in Peru must pay thirteenth and fourteenth-month bonuses to all employees. These are paid in July and December each year. 

Paid Leave

There are several types of paid leave entitlements according to labor laws in Peru

    • Public holidays: There are 12 public holidays in Peru. 
    • Paid time off: Full-time employees are entitled to 30 calendar days of paid vacation after their first year of service. 
  • Sick leave: Peruvian employees can consecutively take up to 11 months and 10 days of paid sick leave. The employer must pay for 20 days of sick leave per year. Any other time is covered by social security.    
  • Parental leave: New mothers are entitled to 90 days of paid maternity leave. They can take 45 days before and after the child’s birth. Fathers can take ten days of paid leave after the child is born. 
  • Care leaves: There are several types of care leaves in Peru, which employees can take to care for sick family members. 

Overtime Pay 

The standard work week in Peru is between 40 and 48 working hours per week. Employees receive an additional 25% on top of their hourly rate for the first two hours of overtime. Anything beyond that is compensated at an extra 35%. Some managerial positions do not qualify for overtime pay. 

Severance Pay 

If an employee is terminated without just cause and after their probation period, they are entitled to severance pay. The employer must pay 1.5 months of salary for each year worked. The maximum severance pay in Peru is 12 months

Additional Costs of Hiring Peruvian Talent 

Today’s talent market is extremely competitive. To hire top Peruvian talent, employers may also want to offer a benefits package, which can help both search and retention. Here are some benefits you might consider offering Peruvian employees along with other possible costs. 


Offering the right benefits package can help you stand out from the competition. 

In Peru, many employers offer private health insurance for employees and their families. Prices for this vary greatly, depending on the type and extent of coverage. However, one report puts the average cost of private health insurance in Peru at USD 211 per year. 

For highly competitive roles, you may also want to consider added vacation time, flexible schedules, extra pension benefits, and so on. 

Bonuses and Extras 

Finally, you’ll want to think about smaller expenses like gifts for special occasions, comped meals, or coffee for meetings. 

If you hire one or two employees in Peru, they’ll likely do remote work. Even so, you may want to pay for a coworking space or provide funding to set up a home office. Daily rates for coworking spaces in Peru start at about USD 4. 

However, you might be hiring an entire team to work on larger projects such as software development. If so, it can be wise to rent an office space to facilitate collaboration among your staff in Peru. 

Average Cost of Hiring One Employee in Peru (Annual in USD)

Below is an estimate based on a salary of $100,000 for an employee in Peru. This salary is for ease of calculation only. It will change depending on your hiring goals, the employment contract, the candidate’s experience, and the type of position. 

  • Salary: $100,000
  • Employer Taxes: $9,000
  • 9%: National Health Insurance
  • Annual Bonuses: $16,667
  • TOTAL: $125,667 + Benefits (discretionary) 

Note that these totals do not include other standard costs like soft benefits commonly offered in Peru.

A Global EOR Can Help You Manage International Payroll 

With so many costs to consider, it may feel overwhelming to start hiring globally. An Employer of Record (EOR) can help. An EOR like Borderless can help you compliantly hire and pay employees in Peru.

If you’d like to begin global hiring but aren’t sure where to start, book a demo with Borderless. We’ll walk you through every step, so you can reap all the benefits without the added headaches. 


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