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Peru gratificaciones and CTS: mandatory bonus and severance fund obligations for employers

Peru gratificaciones and CTS: mandatory bonus and severance fund obligations for employers
Emmanuel Amegah

Emmanuel Amegah

September 11, 2026

Two of Peru's most significant employer obligations are not monthly contributions but semi-annual cash events: the mandatory gratificaciones paid twice per year and the CTS (Compensación por Tiempo de Servicios) deposited into the employee's personal severance fund account twice per year. Together they add approximately 26% to the true annual employer cost above base salary — yet both are consistently undercalculated or missed by international operators entering Peru for the first time.

Gratificaciones — Mandatory Bonuses

What they are

Statutory semi-annual bonuses equivalent to one month's gross salary, paid twice per year to all private sector employees:

  • Gratificación de Fiestas Patrias: By 15 July (covers January to June service)
  • Gratificación de Navidad: By 15 December (covers July to December service)

Governed by Law 27735 (2002). Not discretionary — a statutory entitlement.

Calculation

Each gratificación equals one month's gross remuneration, including basic salary and any regular, permanent allowances paid for at least 3 months in the prior semester. Variable or occasional payments (one-off bonuses, irregular commissions, overtime) are excluded.

For incomplete semesters, prorated at 1/6 per complete month of service.

Example: Employee earning PEN 5,000 basic + PEN 500 housing allowance (paid regularly), completing 6 full months in the January to June period. Gratificación = PEN 5,500.

EsSalud exemption

Since Law 29351 (2009), extended permanently by Law 29714 (2011), gratificaciones are exempt from EsSalud contributions and pension deductions. They are paid gross. Employers who apply EsSalud (9%) and pension deductions to the July and December bonus payments are over-calculating contributions and underpaying employees.

Bonificación Extraordinaria: When the EsSalud exemption was enacted, a compensatory payment equivalent to 9% of the gratificación was introduced, paid by the employer directly to the employee alongside the bonus. Verify the current legal status of this payment via SUNAT and MTPE — the legislation has been updated multiple times.

Income tax on gratificaciones

5th category retención applies. The gratificación is annualised and added to projected annual salary when computing the monthly tax withholding for July and December.

CTS — Compensación por Tiempo de Servicios

What it is

A statutory severance fund deposited by the employer into a bank account held in the employee's name, twice per year. The employee cannot freely withdraw CTS during employment — it is reserved for the end of the employment relationship (with some partial withdrawal exceptions).

Governed by Legislative Decree 650 (1991).

Calculation

The CTS base is broader than the gratificación base:

CTS monthly base = Basic salary + regular allowances + one-sixth of annual gratificaciones

The inclusion of one-sixth of annual gratificaciones is the critical difference from the gratificación calculation.

One-sixth of annual gratificaciones = (Monthly gratificación base x 2) / 6

Semi-annual CTS deposit = CTS monthly base x 0.5

Worked example

Basic salary: PEN 5,000. Housing allowance (regular): PEN 500. Gratificación base: PEN 5,500.

One-sixth of annual gratificaciones: (PEN 5,500 x 2) / 6 = PEN 1,833.33

CTS monthly base: PEN 5,000 + PEN 500 + PEN 1,833.33 = PEN 7,333.33

Semi-annual deposit: PEN 3,666.67

Deposit deadlines

Deposit Period covered Deadline
May deposit November to April By 15 May
November deposit May to October By 15 November

The employee chooses the bank or financial institution. CTS must be deposited directly to the employee's account — employers cannot hold CTS funds internally.

True Employer Cost Impact

Obligation Monthly cost as % of base salary
Gratificaciones (2 months / 12) 16.67%
CTS (including gratificación component) ~9.72%
Vacaciones accrual 8.33%
EsSalud 9%
Total above-base employer cost ~43.7%

Common Mistakes

1. Not including one-sixth of annual gratificaciones in the CTS base. The most widespread CTS error. Omitting the gratificación component understates each deposit by 16 to 25% depending on salary structure. The shortfall accumulates each semester and must be corrected at termination.

2. Applying EsSalud and pension deductions to gratificaciones. Since 2009, gratificaciones are paid gross. Payroll engines that apply these charges to July and December payments are overcalculating employer EsSalud and underpaying employees.

3. Not prorating gratificaciones for incomplete semesters. An employee who started in March is entitled to 4/6 of the July bonus — not a full month. Paying a full bonus to all employees regardless of start date overpays recent hires.

4. Using the wrong CTS semester periods. The May deposit covers November to April; the November deposit covers May to October. Treating these as calendar half-years miscalculates proration for employees who joined or left mid-period.

5. Omitting the Bonificación Extraordinaria. The 9% employer payment to the employee alongside each gratificación (to compensate for the EsSalud exemption) is frequently omitted by payroll engines built after the exemption was introduced. Verify current legal status before processing.

How Cadana Supports Peruvian Payroll Compliance

Computing gratificaciones on the correct base, applying the EsSalud exemption and Bonificación Extraordinaria correctly, calculating CTS with the one-sixth gratificación component, depositing to the employee's chosen institution by the 15 May and 15 November deadlines, and accruing both obligations as monthly provisions — Cadana's global payroll tax engine handles the full Peruvian statutory benefit cycle at the API layer.

Book a demo at cadanapay.com/book-demo to see how it works in practice.

Sources and References

Emmanuel Amegah

Emmanuel Amegah