Employment contracts in Peru – Quickstart Guide

As an entrepreneur, there are several requirements and processes to consider while setting up a company. Technology and globalization have caused a great effect not only on new market trends but also on the labor force. As your company grows, hiring a team that shares your corporative vision will be necessary.

Regardless of the industry, when incorporating personnel into your company payroll you must be aware of the types of contracts that can be used for this purpose, in accordance with local labor law. You need to know the benefits of your hired collaborators and the economic impact that hiring such a person will have on your company.

What is an employment contract?

An employment contract is an agreement between the employer and the employee. This agreement indicates that the employee will provide certain services in exchange for economic retribution, and it establishes the rights and obligations that both parties must respect.

A contract not only provides employment stability for the employee but also allows the company to benefit from the capabilities, knowledge, and skills of the employees under its direction. In addition, it is very useful to protect the disclosure of confidential information of the company as well as any other risk that may arise.

Specifications of an employment contract

An employment contract must consider the following points:

• The detail of the functions that correspond to the job, in addition to specifying exactly the position’s name.

• Indicate the working hours to be fulfilled by the employee, indicating days and working hours.

• Establish the test time to be considered by the employer in order to verify that the employee meets the qualities and capabilities for the position, before proceeding to hire the employee definitively. By law the probation period is three months; it can be extended to six months for qualified or trusted staff and to one year for management positions.

• Specify precisely the remuneration that the employee will receive, in addition to specifying any bonuses, if any.

• Specify if the contract is for a fixed term or for an indefinite period.

• Specify the vacation time the employee is allowed to take and how it will be established, for the employee’s prior knowledge.

• Specify clearly, which are the infractions that can end the work contract, so that the employee knows which behaviors to avoid.

• Specify the obligations and rights that both the worker and the company must comply with.

• Indicate the procedure for the resolution of conflicts that may arise between the company and the worker, which may be by conciliation, arbitration, or some intermediary entity.

Types of contracts

In Peru, the following types of contracts are presented:

1) Indefinite term contract: This is the default contract under Peruvian law: it has a start date but no end date. It ends only on grounds set by law, such as resignation or dismissal for a just cause related to the employee’s conduct or capacity; an arbitrary dismissal entitles the employee to compensation.

2) Fixed-term contract: Known as a contract “subject to modality”, it must be in writing, state its cause, and be registered with the Ministry of Labor within 15 calendar days of signing. Successive fixed-term contracts with the same employer cannot exceed five years in total. Although the contracts established by law have an indefinite term, this contract can be applied under certain situations and conditions. Here we can consider the following:

2.1. Contracts of a temporary nature:

• Contracts for initiation or increase of activity

• Contract for market needs

  2.2. Contracts for business restructuring: This is performed by substitution, extension, or modification of the activities developed in the company.

  2.3. Contracts of an accidental nature:

• Occasional contract

• Substitution contract

  2.4. Contracts for work or service:

• Contract for specific work or service (duration as necessary)

• Intermittent contract (Only to cover the needs of the company’s activities that are permanent but discontinuous)

• Seasonal contract (Only to attend to needs at certain times of the year)

It is important to consider that contracts may vary depending on your industry, as special contracts may have to be created, as per local labor law.

Key rules for 2026

• Minimum wage (RMV): S/ 1,230 a month from 1 October 2026 (Supreme Decree 015-2026-TR). A second increase, to S/ 1,300, is planned for the first half of 2027.
• Maximum working time: 8 hours a day or 48 hours a week.
• Every employee must be registered in the electronic payroll (T-Registro and PLAME) from the start date.
• Under the general labor regime, employees receive two statutory bonuses (gratificaciones) in July and December, a severance fund (CTS) deposited in May and November, and 30 days of paid vacation a year. Micro and small companies registered in REMYPE have reduced benefits.
• Contracts with foreign workers must be in writing and approved by the labor authority. Foreigners can be at most 20% of the workforce and earn at most 30% of the payroll, with exceptions.

To run payroll in Peru, see payroll outsourcing in Peru.

Get help from Easyco

Easyco handles payroll, employment contracts and employer of record services in Peru, and coordinates company formation up to the issue of the RUC. Read how to set up a company in Peru, or contact us to discuss your project.

Easyco also provides:

• Appointment of a legal representative
• Providing a registered office address
• Handling tax and accounting
• Payroll and employer of record services
• Support with your corporate bank account opening
• Trademark registration with INDECOPI
• Recruiting and hiring