Countries › Peru › Guide › 16. What is normal abroad but not here › Severance is prefunded twice a year: the CTS deposits

Severance is prefunded twice a year: the CTS deposits

Last verified: 2026-10-29 · Status: Changing

Abroad severance is usually paid only when a job ends; in Peru employers deposit a severance fund, the compensación por tiempo de servicios (CTS), every May and November. Each deposit is about half a month of pay, including one sixth of the gratificación, into a bank account the worker chooses, and once deposited the employer's obligation is settled. Until 31 December 2026 workers may withdraw 100 percent of their CTS balances, so the fund is not a retention tool for employers.

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 amounts use the 2026 UIT of S/ 5,500 set by Decreto Supremo Nº 301-2025-EF, as cited in SUNAT Resolución de Superintendencia Nº 000016-2026/SUNAT. Conversions are for orientation only.

Key facts

CTS severance fund deposits (May and November)	2 depositsDS 001-97-TR art. 21 and 22, as of 2026-10-29 · in force
Days to make each CTS deposit (from 1 May and 1 November)	15 calendar daysDS 001-97-TR art. 22, as of 2026-10-29 · in force
Temporary free withdrawal of 100 percent of CTS balances until	2026-12-31 dateLey 32322 sole transitory provision, as of 2026-10-29 · in force

The rule

1. The CTS accrues from the first month of employment, and fractions are computed by thirtieths. It is deposited every six months at the institution the worker chooses; the deposit settles the obligation, without prejudice to top ups if it was short. Only workers under the common private regime who work on average at least four hours a day are covered.
Cost to do it: About one monthly salary a year per employee.
Example: An employee on S/ 5,000 who works the full May to October semester earns six twelfths of computable pay; one hired on 16 August earns two full months (September and October) plus 16 thirtieths for the days worked in August. / A full semester deposit for that employee is about US$845.Decreto Supremo Nº 001-97-TR, Texto Único Ordenado del Decreto Legislativo Nº 650, Ley de Compensación por Tiempo de Servicios (El Peruano 1 March 1997), Art. 2 (as amended by Ley Nº 30408, 8 January 2016) and art. 4, 1997-03-01 official text · verified 2026-10-29

2. Employers deposit in May and November as many twelfths of the computable remuneration of April and October respectively as full months worked in the semester. Semi annual pay such as the gratificaciones enters the computable remuneration at one sixth.
Cost to do it: Half a month of computable pay per full semester.
Example: For an employee on S/ 5,000, computable pay is S/ 5,000 plus one sixth of the S/ 5,000 gratificación, S/ 5,833.33; a full semester deposit is six twelfths, S/ 2,916.67. / About US$845 per deposit, US$1,690 a year.Decreto Supremo Nº 001-97-TR, Art. 18 and 21, 1997-03-01 official text · verified 2026-10-29

3. Deposits must be made within the first 15 calendar days of May and November; if the last day is not a business day, on the next business day. A worker who leaves after less than a semester is paid the accrued CTS directly by the employer within 48 hours of the termination.
Cost to do it: No fee; late deposits are an inspection risk.
Example: The November 2026 deposit is due by 15 November 2026 on the October computable pay.Decreto Supremo Nº 001-97-TR, Art. 3 and 22, 1997-03-01 official text · verified 2026-10-29

4. CTS deposits and interest are intangible and cannot be attached except for child support up to 50 percent. As a general rule the worker can freely withdraw up to 50 percent of the balance, and 100 percent if diagnosed with a terminal illness or cancer. As a one off measure until 31 December 2026, workers may freely dispose of 100 percent of their CTS deposits.
Cost to do it: No cost to the employer; the balance belongs to the worker.
Example: A worker with S/ 5,833.33 accumulated can withdraw all of it before 31 December 2026. / About US$1,690.Decreto Supremo Nº 001-97-TR art. 37; Decreto Legislativo Nº 650 art. 42 as amended by Ley Nº 32322 (El Peruano 9 May 2025), DS 001-97-TR art. 37; DL 650 art. 42; Ley 32322 sole transitory provision, 2025-05-09 official text · verified 2026-10-29 · changed: Ley Nº 32322 of 9 May 2025 rewrote art. 42 (free partial withdrawals up to 50 percent, 100 percent for terminal illness or cancer) and allowed free withdrawal of 100 percent of CTS balances until 31 December 2026.

Monthly salary	Computable remuneration	Deposit per semester	Deposit in USD
S/ 1,230	S/ 1,435.00	S/ 717.50	US$208
S/ 3,000	S/ 3,500.00	S/ 1,750.00	US$507
S/ 5,000	S/ 5,833.33	S/ 2,916.67	US$845
S/ 10,000	S/ 11,666.67	S/ 5,833.33	US$1,690

CTS deposit for a full semester by monthly salary, including one sixth of the gratificación (USD at S/ 3.452)

Worked example

A S/ 5,000 employee hired on 1 August 2026 has three full months (August to October) in the May to October semester; the July gratificación was paid before the hire date, so computable pay is S/ 5,000 and the November deposit is three twelfths, S/ 1,250, about US$362.
Over a full year the same employee costs two deposits of S/ 2,916.67, S/ 5,833.33, about US$1,690.

Step by step

Ask each new hire in writing which bank and currency to use; if the worker does not answer by 30 April or 31 October the employer deposits in a fixed term account at a permitted institution (DS 001-97-TR art. 23).
Compute April and October computable pay including one sixth of the gratificaciones received in the semester.
Deposit by 15 May and 15 November and keep the bank receipts for inspections.
Pay any CTS accrued for a partial semester directly within 48 hours of an exit.
Do not count on the CTS balance as a retention or set off tool: it belongs to the worker, and until 31 December 2026 it can be withdrawn in full.

Common traps

Leaving the gratificación out of the base understates every deposit.
The CTS is in addition to the indemnity for arbitrary dismissal; it is not a substitute for it.
Part time workers averaging under four hours a day are outside the CTS, but misclassifying hours invites claims.
Depositing late or at a bank the worker did not choose does not discharge the obligation cleanly.

Sources

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