How to Calculate CTS in Peru: Complete Guide 2026

CTS (Compensacion por Tiempo de Servicios), or Compensation for Time of Service, is a mandatory labor benefit in Peru regulated by Supreme Decree 001-97-TR (Consolidated Text of the CTS Law). Its primary purpose is to act as an unemployment insurance: a savings fund that accumulates during the employment relationship and that the worker can use when their employment ends.

CTS has the following legal characteristics:

• It is a non-waivable right of every worker subject to the private sector regime
• It is deposited semi-annually in a financial institution chosen by the worker
• Deposits are made in May (for the November-April semester) and November (for the May-October semester)
• The employer is required to deposit CTS within the first 15 calendar days of May and November
• Deposits earn interest in favour of the worker

Who is entitled to CTS:

• Private sector workers with indefinite or fixed-term contracts
• Workers who work at least 4 hours per day (or 20 hours per week)
• Workers who have worked at least 1 complete month in the corresponding semester

Not entitled to CTS: workers with less than 4 hours per day, those who earn 30% or more of the establishment's tariff revenue, and workers under the special micro-enterprise regime. Calculate your CTS with our CTS Peru calculator.

The CTS formula considers the computable remuneration and the time of service during the semester:

Basic formula:

CTS = (Computable remuneration + 1/6 of last gratification) x Complete months / 12 + (Computable remuneration + 1/6 of last gratification) / 12 / 30 x Days

Simplified:

Semester CTS = (Salary + 1/6 gratification) x Months worked in semester / 12

Computable remuneration:

Includes all regular remunerative concepts received by the worker:

• Monthly base salary
• Family allowance (if applicable): equivalent to 10% of the minimum wage (RMV)
• Regular commissions (average of the last 6 months)
• Regular overtime (average of the last 6 months)
• Main meals provided in kind by the employer

NOT included:

• Legal gratifications for July and December
• Profit sharing
• Working conditions (transport, per diem, representation)
• Christmas basket or similar
• Education bonus

The sixth of the gratification (1/6):

This component is crucial and frequently overlooked. Take the last full gratification received (July or December) and divide by 6. This amount is added to the salary to form the calculation base. If the gratification was proportional, the proportional amount divided by 6 is used.

Let us walk through a detailed example of CTS calculation for the May deposit (November-April semester):

Case details:

• Monthly base salary: S/ 3,500
• Family allowance: S/ 103 (10% of 2025 minimum wage: S/ 1,025)
• December gratification received: S/ 3,603 (salary + family allowance)
• Period worked in semester: November to April complete (6 months)

Step 1: Calculate computable remuneration

• Base salary: S/ 3,500
• Family allowance: S/ 103
• Total base remuneration: S/ 3,603

Step 2: Calculate 1/6 of the gratification

• December gratification: S/ 3,603
• 1/6 of gratification: S/ 3,603 / 6 = S/ 600.50

Step 3: Determine total computable remuneration

• Computable remuneration = S/ 3,603 + S/ 600.50 = S/ 4,203.50

Step 4: Calculate the semester's CTS

• CTS = S/ 4,203.50 x 6/12 = S/ 2,101.75

Example with incomplete period (started in February):

• Months worked: February, March, April = 3 months
• CTS = S/ 4,203.50 x 3/12 = S/ 1,050.88

Example with additional days (started on January 15):

• Complete months: February, March, April = 3 months
• January days: 16 days (15th to 31st)
• CTS = (S/ 4,203.50 x 3/12) + (S/ 4,203.50 / 12 / 30 x 16)
• CTS = S/ 1,050.88 + S/ 186.82 = S/ 1,237.70

Verify your calculations with our CTS calculator which applies the formula automatically.

CTS deposits are made twice a year, and the employer has strict deadlines to comply with:

May deposit (November-April semester):

• Covers the period from 1 November to 30 April
• Maximum deposit deadline: 15 May
• Reference remuneration: April salary and December gratification

November deposit (May-October semester):

• Covers the period from 1 May to 31 October
• Maximum deposit deadline: 15 November
• Reference remuneration: October salary and July gratification

Employer obligations:

• Deposit CTS in the financial institution chosen by the worker
• Deliver a signed CTS settlement statement to the worker within 5 business days of the deposit
• The settlement must include: computable remuneration, service period, deposited amount, and name of the depository institution
• If the employer does not deposit CTS on time, interest accrues at the highest rate in the financial market

Choosing the depository institution:

The worker has the right to choose the financial institution (bank, municipal savings bank, finance company) where their CTS will be deposited, as well as the currency: soles or dollars. If the worker does not communicate their choice, the employer deposits in any permitted institution. The worker can change institutions once a year by notifying the employer.

Non-compliance:

If the employer fails to deposit CTS within the established deadlines, the worker can:

• Demand payment with statutory labour interest
• File a complaint with SUNAFIL (National Superintendency of Labour Inspection)
• Penalties for non-compliance vary according to company size and number of affected workers

CTS has specific rules about when and how much the worker can withdraw:

Temporary free availability (Law 31480 and its extensions):

In recent years, the Peruvian government has approved temporary laws allowing 100% withdrawal of CTS. These measures, initially adopted during the pandemic, have been extended several times. It is important to verify whether this measure is still in effect at the time of reading this guide, as it has an expiration date.

General rule (when free availability does not apply):

The worker can withdraw up to 70% of the excess over 6 gross monthly salaries deposited in their CTS account. The calculation works as follows:

• Determine the equivalent of 6 gross salaries
• Calculate the total CTS balance (deposits + interest)
• If the balance exceeds 6 salaries, the worker can withdraw 70% of the excess

Example:

• Monthly gross salary: S/ 4,000
• 6 salaries: S/ 4,000 x 6 = S/ 24,000 (untouchable)
• Total CTS balance: S/ 32,000
• Excess: S/ 32,000 - S/ 24,000 = S/ 8,000
• Amount available for withdrawal: S/ 8,000 x 70% = S/ 5,600

Withdrawal upon employment termination:

When the employment relationship ends (resignation, dismissal, mutual agreement), the worker can withdraw 100% of their accumulated CTS plus interest. To do so, the employer must provide a termination letter that the worker presents to the financial institution. The employer has 48 hours to issue this letter upon request.

Several special situations affect CTS calculation and deposit:

Truncated CTS:

When a worker leaves employment before the semi-annual deposit, they are entitled to truncated CTS for the period worked. The employer must pay it directly to the worker (not deposit it in the financial institution) within 48 hours of termination. Truncated CTS is calculated using the same formula but only for the months and days actually worked in the incomplete semester.

Small business regime CTS:

Workers under the special small business regime (companies with annual sales of 150 to 1,700 UIT) are entitled to CTS but with a distinction: they receive 15 daily salaries per complete year, equivalent to half of what a general regime worker receives. The deposit is made semi-annually just as in the general regime.

Micro-enterprise regime workers:

Micro-enterprise workers (annual sales up to 150 UIT) are not entitled to CTS under Legislative Decree 1086. This is one of the most significant differences between the general regime and the MYPE regime.

Household workers:

Under Law 31047, household workers are entitled to CTS equivalent to 15 days of salary per year of service, capped at 90 days of salary.

CTS and judicial attachment:

CTS can only be judicially attached for alimony obligations (child support). No other type of debt allows attachment of CTS deposited in the financial institution. However, the employer can withhold CTS for worker debts to the employer at the time of termination.

To calculate the gratification that affects your CTS, use our Peru gratification calculator.

Both employers and workers make frequent errors in CTS calculation. Knowing them will help you verify that your deposit is correct:

Error 1: Not including the sixth of the gratification

This is the most common error. The computable remuneration for CTS must always include 1/6 of the last gratification received. Omitting it significantly reduces the deposited amount. If your gratification was proportional, the proportional amount is used.

Error 2: Not including the family allowance

The family allowance (10% of minimum wage) is a remunerative concept that is part of the computable remuneration for CTS. Some employers mistakenly omit it.

Error 3: Including non-computable concepts

Gratifications, profit sharing, working conditions, and extraordinary bonuses are not part of the computable remuneration. Including them creates an excess CTS that the employer cannot easily recover.

Error 4: Not averaging commissions and overtime

When the worker regularly receives commissions or overtime, the average of the last 6 months must be calculated and added to the computable remuneration. Using only the last month's amount is incorrect.

Error 5: Calculating days incorrectly

For CTS, each month counts as 30 days, regardless of whether it has 28, 29, or 31 days. Days are counted from the day after the last deposit or the start of the employment relationship. A common error is counting calendar days instead of the fictitious 30-day months.

Error 6: Not depositing on time

The deposit must be made by 15 May and 15 November at the latest. Depositing late generates default interest calculated at the highest rate in the financial market. Always verify the deadline.

If you have doubts about your CTS, compare your employer's calculation with our CTS Peru calculator.

CTS receives special tax treatment in Peru:

Income Tax on CTS:

CTS is exempt from Income Tax up to an amount equivalent to the first 4 gross monthly salaries withdrawn annually. The excess is subject to the fifth category income tax rate. However, during free availability periods, total withdrawal is usually exempt under the applicable temporary regulations.

CTS interest:

The interest earned by CTS in the financial institution is exempt from Income Tax. This makes it a tax-efficient savings vehicle.

Tips to maximise your CTS:

1. Choose the right currency:

You can deposit your CTS in soles or dollars. If the exchange rate trend favours the dollar, depositing in dollars can give you additional returns through currency appreciation. But if the sol strengthens, you will lose value. Evaluate the current situation with our Peru IGV calculator.

2. Compare interest rates between institutions:

Financial institutions offer different interest rates for CTS deposits. Municipal savings banks and finance companies usually offer higher rates than commercial banks, although with lower FSD (Deposit Insurance Fund) coverage.

3. Use CTS as an emergency fund:

CTS is designed as unemployment insurance. Resisting the temptation to withdraw it (when free availability applies) and letting it grow with interest will give you an important financial cushion if you lose your job.

4. Verify your CTS settlement statement:

Your employer must deliver a settlement statement within 5 business days of the deposit. Review it carefully: verify the base salary, family allowance, 1/6 of gratification, and the computed period. If you find errors, claim immediately.

5. Do not forget your CTS when changing jobs:

When you change jobs, your accumulated CTS remains in the financial institution. You do not need to withdraw it; it can continue earning interest. You will only need the termination letter to withdraw 100% whenever you wish.