Social security and taxation

What expats should expect to pay

Social security and taxation

Everyone has to pay taxes once they are a resident of Peru, i.e. after 183 days of living and working there legally.

Social security payments

Peru’s social security system reflects its status as a developing country and is still in its fledgling stage. Social security payments currently come in at 13% of gross earnings, which goes to the government-sponsored pension fund (Oficina de Normalización Previsional, or ONP). A resident of Peru is eligible for social security payments in cases of disability or unemployment, or if that person is being paid less than the minimum wage.

Taxes go straight to the health and pension systems - private or public. A person receives a pension plan once they hit the age of 60 and have been employed by a Peruvian or foreign company for a minimum of 20 years worth of contributions. In the event of early retirement at the age of 55, the retiree is required to have paid at least 30 years of contributions.

Peruvian income tax

The rates of net taxable income are 15%, 21% and the maximum of 30%. The following table shows the salary ranges for each income tax band:

Salary range (in tax units, UIT)

Income tax rate

0 - 7 UIT


8 - 27 UIT


28 - 54 UIT


+ 54 UIT


Note: In 2013 1 UIT = PEN 3,700 (US$1,457)

Salaries and remuneration received by non-residents for services provided in Peru are taxed at a rate of 30%. Self-employed workers pay taxes equal to their gross income, minus a deduction of 20%.

Residents of Peru are taxed on their worldwide income, while non-residents pay taxes on their Peruvian-source income only. As explained before, residency in Peru is achieved once an individual has been in Peru for more than 183 days in the previous calendar year.

Property-owners are subjected to a tax rate ranging from 0.2% to 1% as of 2012. Vehicle tax comes in at 1%.

Colombia, Chile, Ecuador, Brazil, Bolivia and Canada all have a double-taxation treaty with Peru to facilitate overseas business and trade. If you are not a resident of these six countries, be sure to visit your country’s tax bureau to make sure that you pay your taxes accordingly.

Further reading

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