Benefits & pensions
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Peru
Family allowance: Employees who have children under 18 years old or older than 18 years old and younger than 24 years old who are attending college/university or other similar educational institutions, or who have children of legal age with a certified severe disability are entitled to an additional monthly allowance payment of 10 percent of the minimum wage.
This is a single monthly allowance payment, regardless of the number of children.
Compensation for time of service: Every May and November, employers must deposit a compensation for time of service (CTS) into a special banking account in the employee’s name for all employees who work at least 4 hours per day and have a month of effective service with the company. The amount is approximately 1 month’s salary per year, though it must be calculated on the basis of the ordinary salary and all the amounts regularly paid to the employee either in cash or in kind (eg, Family Allowance). This is intended to serve as an unemployment insurance scheme for employees.
Legal bonuses: Employees are entitled to a legal bonus twice a year, during the first 2 weeks of July and December, respectively. Each bonus is equal to 1 month’s salary. Employees who are not actively employees in July or December, but have worked at least 1 month in the respective period, are entitled to receive the legal bonus pro-rated to the number of months worked.
Profit sharing: Companies with more than 20 employees must distribute part of the profits earned during the respective year to their employees. The distribution percentage depends on the company’s activities: (i) 10 percent of profits for fishing, telecommunication and manufacturing companies; (ii) 8 percent for mining, commercial companies and restaurants; and (iii) 5 percent for companies that do not fall into the first 2 categories.
The distribution of profits among the employees is made depending upon their effective working days and in proportion to the salary of each employee. The sum awarded to any individual employee may not exceed the equivalent of 18 monthly salaries. Any excess is placed in a special governmental fund.
Pension system: There are 2 systems that an employee may choose from in order to obtain pension. One is a public system; the other is a private system.
Contributions to the public system are equivalent to 13 percent of an employee’s salary. In the private system, the contribution is approximately 12 percent, but it varies depending on the pension fund, the month and the type of commission chosen by the employee.
The contribution is paid by the employee, and the employer must withhold the percentage from the employee’s salary.
Public health insurance – EsSalud: The employer must pay to EsSalud a contribution of 9 percent of the salary to cover health benefits of each employee.