2025 Guide to Hiring Remote Software Engineers in Peru

Hiring Peruvian software engineers offers US companies access to a growing tech talent pool, excellent English proficiency, and convenient time-zone alignment. Peru has invested in STEM education, producing a high percentage of engineering graduates (the highest in Latin America at ~29.6% of tertiary degrees). Combined with lower labor costs, Peruvian developers earn roughly 30–50% less than US counterparts. Peru has emerged as an attractive nearshore hiring destination. The country’s proximity to the US (Eastern Time Zone) ensures substantial work-hour overlap, facilitating real-time collaboration. Many Peruvian engineers speak fluent English, reducing communication barriers.

US employers must navigate Peru’s telework laws, contract rules, compensation norms, mandatory benefits, tax regulations, visa requirements, and other HR considerations when hiring local developers. This guide covers those essentials, plus a 2025 holiday and tax-bracket summary, and shows  how CloudDevs’ platform streamlines hiring, vetting, payroll, and compliance for seamless onboarding.

1. Peru’s Remote Work Legal Framework

In 2022–2023 Peru enacted a formal Telework Law (Law No. 31572) to regulate remote work in both public and private sectors. Published Sept 11, 2022, with regulations issued Feb 2023, the law took effect in April 2023. It defines telework as any arrangement where an employee performs their duties outside the employer’s premises using information and communications technology. Key requirements of Peru’s Telework Law include:

Written Telework Agreement:

Employers and employees must sign a written telework contract or addendum specifying all terms of the remote work arrangement (hours, equipment, duties, work location, data security, etc.). US companies hiring Peruvian engineers should ensure they have a clear, bilingual (Spanish/English) contract outlining scope of work, schedule, and deliverables.

Equipment and Costs:

The employer typically provides or reimburses necessary equipment (laptop, monitor, Internet, etc.). Any costs borne by the employee (e.g. higher utility bills) should be agreed in advance.

Health & Safety:

Although traditional workplace health-and-safety laws may not fully apply to remote workers, companies are encouraged to promote ergonomic home-office setups and address any occupational risks. Peru’s telework rules emphasize employer support for a safe remote work environment.

Right to Disconnect:

Peruvian law explicitly grants employees the right to disconnect outside working hours. In practice, this means respecting agreed schedules and avoiding pressuring remote workers with after-hours communication. US managers should set clear expectations around response times and off-hours boundaries (e.g. no mandatory late-night or weekend work) to comply with this principle.

Data Protection:

The employer must comply with Peru’s Personal Data Protection Law (Law 29733). Remote engineers will handle company and client data, so secure IT practices are required. Written consent for any data processing and adequate cybersecurity measures (VPN, antivirus, training) are essential to protect personal and business data.

Note: If the developer is officially hired through an Employer-of-Record (EOR) or local Peruvian entity, all Peruvian labor laws (work hours, social security, benefits, etc.) apply. However, some provisions (like on-site occupational safety) may be less relevant for strictly remote roles. If the person is engaged as an independent contractor (no local contract), many labor regulations technically do not apply. That said, misclassifying an employee as a contractor can create legal and tax risks (e.g. creating a “permanent establishment” or liability for unpaid contributions). US companies should consult Peruvian legal counsel or use an EOR service to determine the appropriate engagement model and ensure compliance.

2. Employment Contracts and Terms

Peru’s labor code requires clear, compliant contracts to protect both employer and employee. Key contract types and terms include:

• Indefinite-Term (Contrato Indefinido): no end date; use a written (Spanish/English) agreement covering salary, role, hours, location, and termination.
• Fixed-Term (Contrato a Plazo Fijo): for specific projects or backfills; must be written and 5 years or converts to indefinite.
• Probation: up to 90 days with shorter notice and limited severance.
• Notice: employees give 30 days; employers give 6–30 days depending on cause.
• Severance: unjustified dismissal costs ~1.5 months’ pay per service year (max 12-months); just cause must be documented.
• Regime: engineers fall under the general labor regime; special regimes apply elsewhere.
  

Best Practice: treat remote hires like on-site, contract, social security, tax withholding, and consider an EOR (e.g., CloudDevs) for full compliance.

3. Working Hours and Overtime

Peru’s default work schedule is 8 hours per day, 48 hours per week. Remote software engineers should typically follow this or an agreed variation (e.g. four 10-hour days). Employers must specify normal hours in the contract (for example, Monday–Friday, 9:00–18:00 Lima time).

Overtime rules: Any hours beyond 48/week or more than 8/day are considered overtime. Overtime pay is calculated as follows:

• First 2 hours of overtime (per day) are paid at +25% above the regular hourly rate.
• Any additional overtime hours beyond the first 2 are paid at +35% above base rate.
• Work on the weekly rest day (usually Sunday) is also considered overtime and must be paid at these enhanced rates.

By law, employees are entitled to at least 24 consecutive hours of rest per week (typically Sunday). Scheduling any work on a Sunday (or scheduled rest day) must be compensated as overtime. There are also provisions for shorter work weeks in certain regions (e.g. Amazonas and parts of Lake Titicaca) but tech employees in Lima or major cities follow the 48/6 model.

4. Compensation and Benefits

source: levels.fyi

When calculating total compensation for Peruvian engineers, US employers should include base salary plus mandated bonuses and contributions. Key points:

Minimum Wage:

As of Jan 1, 2025, Peru’s national minimum wage is 1,130 Peruvian soles (PEN) per month (~US$302). This is the floor for all formal employees. Software engineers typically earn well above this. Note that the minimum wage rose from 1,025 PEN in 2024 to 1,130 PEN in 2025 (a 10% hike).

Typical Salaries:

Peruvian tech salaries vary by experience and city. In general, junior software developers in Peru earn around US$23K–41K per year, mid-level about $39K–63K, and senior $59K–$87K (these figures include local currency conversions and vary by employer). In Lima (the capital), salaries tend to be on the higher end. By comparison, an average US software engineer might earn $100K+, so Peru offers a cost advantage. According to one industry report, Peruvians in tech earn 30–50% less than their US peers.

source: payscale

13th/14th-Month Bonuses (Aguinaldos):

Peruvian law requires two annual bonuses equivalent to one month’s salary each. The first (“Gratificación Fiestas Patrias”) is paid around July (Independence Day), and the second (“Gratificación Navidad”) around December. Each bonus is generally equivalent to one regular salary (capped at a legal limit) and is taxed favorably. These are mandatory for formal employees, though often employers factor them into monthly salary quotes (some quotes say “13-month pay included”). US companies should budget for these extra payouts when calculating total compensation.

Social Security Contributions:

Employers must pay mandatory contributions on top of salary:

• • Health Insurance (EsSalud): Employers contribute 9% of the employee’s gross salary to Peru’s public health insurance fund. (Employees themselves contribute nothing to EsSalud.)
  • Pension Fund (AFP/ONP): Employees contribute to a pension system, but the employer must withhold the appropriate amount each month. If the employee is in the National Pension System (ONP), the employer withholds 13% of salary. If the employee is in a private pension fund (AFP), approximately 13% is withheld as well (10% for the employee’s own account plus ~2.5% for insurance/fees). Note: For AFP plans, employers may also pay additional charges (e.g. 13% life insurance and 1.7% for work accident insurance, known as SCTR).
  • CTS (Severance/Unemployment Fund): Employers must deposit a savings severance account (CTS) twice a year (May and November), equal to 0.5 months’ pay per semester (total ~1 month’s pay per year). CTS is intended to provide income if the employee loses their job. CloudDevs or an EOR typically handles CTS deposits on your behalf.
  • Workers’ Compensation: Accident insurance (SCTR) premiums depend on the job’s risk level (typically 1.0–1.7% of salary). This is also paid by the employer.
  • Social contributions table: For clarity, here are key rates:

Contribution Type	Rate	Paid By
Health insurance (EsSalud)	9%	Employer
Pension (National ONP)	13%*	Employee (withheld)
Pension (Private AFP): account	10%*	Employee (withheld)
Pension (Private AFP): insurance/fee	~2.5%	Employee (withheld)
Pension (Private AFP): employer	~0%	Employer (mostly no match)
CTS (Severance)	~1 month/year	Employer (deposited twice/yr)
Work accident insurance (SCTR)	~1–1.7%	Employer

 

*For ONP, the 13% is withheld from salary. For AFP, 12.5%–13% total is withheld (10% + contributions).

• Tax Withholding: Employers must withhold Peruvian income tax from employee salaries. Peru’s 2025 personal income tax rates are progressive (see Table below). In practice, CloudDevs (as EOR) will handle monthly tax withholding, remittances, and social contributions so you don’t have to manage those details.

5. Leave and Public Holidays

Peruvian labor law mandates a variety of paid leaves. Key entitlements for full-time employees include:

• Vacation: 30 calendar days of paid vacation per year after one year of service. Workers must take at least 15 of those days at one time; the remaining days can be paid out or taken later. Employers must pay vacation pay in advance of leave.
• Sick Leave: Workers can take extended sick leave, but pay is split between employer and social security. Specifically, the employer pays 100% of salary for the first 20 days of sick leave. If the illness continues, Peru’s social security (EsSalud) covers the next 245 days at roughly 66% of salary. Long-term coverage beyond 265 days is generally not required. Employees must provide a medical certificate.
• Maternity Leave: 98 days of fully paid leave (49 days before birth and 49 after). If there are birth complications or multiple births, an additional 30 days can be granted. Peru’s health insurance (EsSalud or a private EPS) pays the maternity salary, but employers must coordinate the leave. Adoptive mothers are also entitled to 30 days paid leave per adoption (child under 12).
• Paternity Leave: 10 business days of paid leave for new fathers. This increases to 20 days in case of multiple births.
• Bereavement Leave: Employees get 5 days of paid leave for the death of a spouse, parent, child or sibling. (Additional days may be granted if travel is needed, as per judicial guidelines.)
• Other Special Leave: Peru also provides leave for jury duty, military service, voting, etc., but these are less common for remote developers.

In addition to leave days, Peru observes national public holidays, when workers are entitled to a day off (or extra pay if they must work). The official 2025 public holidays include (dates in 2025):

Table: Peru’s national holidays for 2025. (Note: the government also often grants additional one-off “puente” holidays after long weekends, but the above are the standard legal holidays.) When a holiday falls on a Sunday, it is often “compensated” with the following Monday off.

Employers must pay normal salary on holidays. If an employee works on a holiday (e.g. for a critical release), law requires overtime pay (typically 100% extra, though often avoided in remote work settings). Holiday pay and leave should be planned upfront when scheduling projects.

6. Taxes and Withholding

If you hire a Peruvian as an employee, the employer is responsible for payroll taxes. Key points:

• Employee Income Tax: As noted, Peru uses progressive rates up to 30%. Employers must withhold this tax from each paycheck based on the brackets shown above.
• Employer Social Security: Per the Social Security code, employers pay 9% to EsSalud, plus the CTS deposits and any work-accident insurance (SCTR) required for the job type.
• Employer Corporate Tax/VAT: These generally apply to companies operating in Peru. A US company with no Peruvian entity usually has no VAT or corporate tax obligations. However, if hiring contractors or risking a permanent establishment (PE) in Peru, corporate income tax (29.5%) and VAT (18%) could theoretically apply to local revenues. Engaging workers as employees through an EOR avoids creating a PE and its taxes.
• Permanent Establishment Risk: Misclassifying employees as independent contractors might trigger PE rules under tax treaties, exposing the US company to Peruvian tax. Using a local payroll provider or EOR (which treats the worker as the EOR’s employee) helps eliminate PE risk.

In summary, a US company hiring Peruvian employees should work with local experts (or CloudDevs) to register with SUNAT (tax authority), and set up proper payroll withholding. The compliance burden is significant for foreign employers, making an EOR solution attractive.

7. Visa and Work Permits

Since this guide assumes hiring Peruvian nationals (or residents) working from within Peru, US employers usually do not need to worry about Peruvian work visas. A Peruvian citizen working remotely for a US company is simply engaged under Peruvian law.

For completeness:

• Work Visas: Foreigners who want to work in Peru for a Peruvian company must obtain a residence and work visa. However, a US employer hiring a Peruvian doesn’t involve this.
• Digital Nomad Visa: Peru has proposed a digital nomad visa (allowing foreigners to stay up to one year while working remotely for non-Peruvian companies). As of early 2025, the visa has not been fully implemented. If a US employer ever hires a non-Peruvian remote worker who will reside in Peru, they should watch for this new visa; but it does not affect Peruvians.
• Tax Residency: Any individual living in Peru for more than 183 days is considered a tax resident. Peruvian citizens are automatically domiciled in Peru. US employers don’t control this – it’s about the worker’s status.

In practice, visa matters are minimal when simply hiring remote Peruvians working from Peru. The real challenges are labor compliance and payroll (addressed above).

8. Best Practices for Hiring Peruvian Developers

When hiring remote Peruvian developers, factor in these best practices:

• Language & Communication: confirm English proficiency; provide docs/orientation in English or Spanish.
• Time Zones: Peru (GMT 5) aligns with U.S. EST/EDT – 3–4 hours overlap with East Coast, plus overlap with Central/Mountain.
• Cultural Fit: favor formality and respect; use Spanish contracts to avoid misunderstandings; Peruvians adapt well to U.S. norms.
• Holidays: account for national holidays (e.g., July 28 Independence Week) when planning sprints.
• Onboarding: onboard as full team members, share materials, include in calls during overlap, and provide clear tech training.
• Contractor vs. Employee: avoid misclassification, full-time direction usually means employee status; using an EOR (like CloudDevs) ensures proper classification.
  

Trial Projects: begin with a small engagement or trial period to assess skills and fit before long-term hiring.

CloudDevs: Simplifying Peru Hiring and Compliance

CloudDevs is your turnkey Employer-of-Record in Peru, handling:

• Pre-vetted Talent: access screened Peruvian engineers without recruiting hassle.
• Local Payroll & Compliance: one USD invoice covers contracts (ES/EN), payroll, taxes, social security, benefits, and Peru’s Telework Law.
• Risk Mitigation: avoids creating a taxable Peruvian entity and ensures full legal compliance.
• Scalability & Flexibility: scale teams up or down with contractor-style ease.
• Cost Efficiency: tap lower Peruvian salary levels without sacrificing quality.
• Nearshore Time Zones: Peru’s GMT 5 alignment with U.S. business hours makes real-time collaboration effortless.
  

Focus on building your product, CloudDevs takes care of the rest.

Ready to expand your team with Peru’s top software engineers?

Learn about hiring Peruvian developers with CloudDevs here.