Countries › Peru › Guide › 7. Labor and employment › Employment contracts in Peru: the indefinite default, the nine fixed term types and their caps, trial periods and integral pay

Employment contracts in Peru: the indefinite default, the nine fixed term types and their caps, trial periods and integral pay

Last verified: 2026-10-28 · Status: Stable

Any paid, personal and subordinate service is presumed to be an indefinite employment contract; fixed term (modal) contracts are allowed only for the causes the law lists, must be written in triplicate with the term and objective cause, and together cannot exceed five years with the same worker. The trial period is three months, extendable in writing to six months for qualified or trust staff and one year for management. Ending a fixed term contract early without cause costs 1.5 monthly salaries per month left, capped at 12, and staff earning at least 2 UIT a month (S/ 11,000 in 2026) can agree an all in annual integral pay.

USD figures use S/ 3.452 per US dollar, the banking system selling rate published by the Superintendencia de Banca, Seguros y AFP for 27 October 2026, from the Banco Central de Reserva del Perú statistics series PD04640PD. UIT based amounts use the 2026 UIT of S/ 5,500 (Decreto Supremo Nº 301-2025-EF, as cited by SUNAT Resolución de Superintendencia Nº 000016-2026). Conversions are for orientation only.

Key facts

Contract type presumed by law	Indefinite typeTUO DL 728 (DS 003-97-TR) art. 4, as of 2026-10-28 · in force
Maximum combined duration of successive fixed term contracts	5 yearsTUO DL 728 (DS 003-97-TR) art. 74, as of 2026-10-28 · in force
Maximum term of a new activity contract	3 yearsTUO DL 728 (DS 003-97-TR) art. 57, as of 2026-10-28 · in force
Maximum term of a business reconversion contract	2 yearsTUO DL 728 (DS 003-97-TR) art. 59, as of 2026-10-28 · in force
Maximum term of an occasional contract per year	6 monthsTUO DL 728 (DS 003-97-TR) art. 60, as of 2026-10-28 · in force
General trial period	90 daysTUO DL 728 (DS 003-97-TR) art. 10 (three months), as of 2026-10-28 · in force
Maximum agreed trial period, qualified or trust staff	6 monthsTUO DL 728 (DS 003-97-TR) art. 10, as of 2026-10-28 · in force
Maximum agreed trial period, management staff	12 monthsTUO DL 728 (DS 003-97-TR) art. 10, as of 2026-10-28 · in force
Indemnity for ending a fixed term contract early, per month left	1.5 monthly salariesTUO DL 728 (DS 003-97-TR) art. 76, as of 2026-10-28 · in force
Monthly salary needed to agree integral annual pay (2 UIT, 2026)	11000 PENTUO DL 728 (DS 003-97-TR) art. 8; DS 301-2025-EF UIT, as of 2026-10-28 · in force

The rule

1. In any personal, paid and subordinate service, an employment contract of indefinite duration is presumed. An indefinite contract may be verbal or written; fixed term contracts only in the cases and with the requirements the law sets; part time contracts may be agreed in writing without limitation.
Cost to do it: No filing fee in the law text; the cost of getting it wrong is that an undocumented or badly documented hire is treated as indefinite.
Example: A consultant paid S/ 6,000 a month who follows a manager's schedule and instructions is presumed an indefinite employee even without a written contract. / About US$1,738.12 a month of pay that carries full employee benefits.Texto Único Ordenado del Decreto Legislativo Nº 728, Ley de Productividad y Competitividad Laboral (Decreto Supremo Nº 003-97-TR), Art. 4, 1997-03-27 official text · verified 2026-10-28

2. Fixed term (modal) contracts come in three groups. Temporary: start or launch of a new activity (up to three years), market needs (renewable within the five year overall limit) and business reconversion (up to two years). Accidental: occasional needs outside the usual activity (up to six months a year), replacement of a worker whose contract is suspended, and emergencies (as long as the emergency lasts). Work or service: a specific work or service (as long as needed, renewable), intermittent work and seasonal work.
Cost to do it: No fee; drafting a cause specific contract for each hire is the cost.Texto Único Ordenado del Decreto Legislativo Nº 728, Ley de Productividad y Competitividad Laboral (Decreto Supremo Nº 003-97-TR), Art. 53 to 64 and 67, 1997-03-27 official text · verified 2026-10-28

3. Fixed term contracts must be in writing, in triplicate, stating their duration, the objective causes for hiring on a fixed term and the other conditions. The labor authority may verify these formal requirements and fine the employer for breaches. Within each type's maximum, shorter contracts can be signed as long as the total stays within the limit, and successive contracts of different types with the same worker cannot exceed five years in total.Texto Único Ordenado del Decreto Legislativo Nº 728, Ley de Productividad y Competitividad Laboral (Decreto Supremo Nº 003-97-TR), Art. 72, 73 (as amended by Decreto Legislativo Nº 1246, 10 November 2016) and 74, 1997-03-27 official text · verified 2026-10-28

4. A fixed term contract becomes indefinite if the worker keeps working after the term or after renewals that exceed the maximum, if the worker continues after the specific work ends without renewal, if the replaced worker does not return and the replacement keeps working, or if the worker proves simulation or fraud. Permanent workers who leave cannot be rehired on a fixed term contract until one year after they left.Texto Único Ordenado del Decreto Legislativo Nº 728, Ley de Productividad y Competitividad Laboral (Decreto Supremo Nº 003-97-TR), Art. 77 and 78, 1997-03-27 official text · verified 2026-10-28

5. The trial period is three months, after which the worker is protected against arbitrary dismissal. The parties can agree a longer period in writing when the job needs training or adaptation or the level of responsibility justifies it, up to six months in total for qualified or trust staff and one year for management staff. The legal or agreed trial period also applies to fixed term contracts.
Cost to do it: No fee; extended trial periods must be written into the contract.Texto Único Ordenado del Decreto Legislativo Nº 728, Ley de Productividad y Competitividad Laboral (Decreto Supremo Nº 003-97-TR), Art. 10 and 75, 1997-03-27 official text · verified 2026-10-28

6. If, after the trial period, the employer ends a fixed term contract early and arbitrarily, it must pay an indemnity of 1.5 ordinary monthly salaries for each month left until the agreed end date, capped at 12 monthly salaries. Fixed term workers have the same benefits as indefinite workers at the same workplace.
Cost to do it: Up to 12 monthly salaries; on S/ 4,000 a month the cap is S/ 48,000.00 (about US$13,904.98).
Example: A two year market needs contract on S/ 4,000 a month is ended without cause with 16 months left: 1.5 x S/ 4,000 x 16 = S/ 96,000.00, reduced to the cap of S/ 48,000.00. / About US$13,904.98 on a salary of about US$1,158.75 a month.Texto Único Ordenado del Decreto Legislativo Nº 728, Ley de Productividad y Competitividad Laboral (Decreto Supremo Nº 003-97-TR), Art. 76 and 79, 1997-03-27 official text · verified 2026-10-28

7. Workers earning a monthly salary of at least two UIT can agree an integral annual pay that includes all legal and agreed benefits except profit sharing.
Cost to do it: Threshold: 2 UIT, S/ 11,000.00 a month in 2026 (about US$3,186.56).
Example: A finance director on S/ 15,000 a month can agree an integral pay of S/ 210,000 a year that already includes the two bonuses and CTS, but profit sharing remains on top. / About US$60,834.30 a year.Texto Único Ordenado del Decreto Legislativo Nº 728, Ley de Productividad y Competitividad Laboral (Decreto Supremo Nº 003-97-TR), Art. 8, 1997-03-27 official text · verified 2026-10-28

8. Management staff represent the employer or share administration and control functions; trust staff work in direct contact with the employer or management with access to confidential information. These categories matter for working time and collective agreements, and the law does not protect abuse or simulation in the designation.Texto Único Ordenado del Decreto Legislativo Nº 728, Ley de Productividad y Competitividad Laboral (Decreto Supremo Nº 003-97-TR), Art. 43 and 44, 1997-03-27 official text · verified 2026-10-28

Type	Use	Maximum
New activity	Start of a business, new establishment or market, new or expanded activity	3 years
Market needs	Temporary and unforeseeable rise in demand, not seasonal swings	Renewable within the 5 year cap
Business reconversion	Replacement or change of activities, technology, systems or processes	2 years
Occasional	Transitory needs outside the usual activity	6 months a year
Replacement (suplencia)	Covering a worker whose contract is suspended	As long as needed
Emergency	Needs caused by acts of God or force majeure	As long as the emergency
Specific work or service	A defined work or service	As long as needed, renewable
Intermittent	Permanent but discontinuous activities	Not fixed in the law
Seasonal	Needs arising only in certain periods each year	The season; rehiring right after two consecutive or three alternate seasons

Fixed term contract types and maximum terms (TUO DL 728, DS 003-97-TR art. 54 to 67 and 74; five year overall cap with the same worker).

Worked example

A Colombian software group opens a Lima S.A.C. and hires a sales lead on a written new activity contract for 12 months at S/ 4,000 a month (about US$1,158.75), stating the opening of the Peruvian operation as the objective cause (DS 003-97-TR art. 57 and 72).
It renews for another 12 months; the total stays inside the three year cap for that type and the five year overall cap (art. 57 and 74).
If the company ends the second contract after 8 months without cause, 4 months remain: it owes 1.5 x S/ 4,000 x 4 = S/ 24,000.00 (about US$6,952.49) (art. 76).
If instead the sales lead simply keeps working after the end date without a new written contract, the relationship becomes indefinite and only a proven cause or the arbitrary dismissal indemnity can end it (art. 77 and 34).

Step by step

Decide whether the role is permanent; if so, use an indefinite contract (verbal is valid, written is better evidence) (DS 003-97-TR art. 4).
For a fixed term hire, pick the contract type that matches a real cause, write it in triplicate with the term and the objective cause, and keep a copy for inspection (art. 53 to 72).
Track each worker's cumulative fixed term time against the type cap and the five year overall cap (art. 74).
Agree any extended trial period in writing at hiring: up to six months for qualified or trust staff, one year for management (art. 10).
Before each end date, decide to renew in writing or let the contract lapse; do not let the worker continue without paperwork (art. 77).
For staff on S/ 11,000 a month or more in 2026, consider an integral annual pay clause (art. 8).
Register the hire in the electronic payroll and set up EsSalud and pension withholding from the first month (see social security).

Common traps

A generic cause such as 'needs of the company' does not justify a fixed term contract; without a specific objective cause the contract can be treated as indefinite (DS 003-97-TR art. 72 and 77 d).
Letting a worker keep working one day after the term ends converts the contract into an indefinite one (art. 77 a).
A former permanent employee cannot be brought back on a fixed term contract until a year after leaving (art. 78).
Ending a fixed term contract early can cost up to 12 monthly salaries, the same cap as the arbitrary dismissal indemnity (art. 76).
An extended trial period that is not in writing is not valid beyond three months (art. 10).
Integral pay does not absorb profit sharing, which remains due on top for companies above 20 workers (art. 8).

Sources

← Employing people in Peru: contracts, the S/ 1,230 minimum wage, hours, statutory bonuses, CTS, EsSalud, profit sharing, dismissal and foreign staff limitsMinimum wage in Peru: S/ 1,230 from October 2026, the S/ 1,300 step for 2027, family allowance and the night work floor →

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