Paying salaries in cash is not prohibited in Peru. However, there are banking compliance rules that can result in tax consequences when certain limits are exceeded.
According to Law No. 28194, the Law to Combat Tax Evasion and Formalize the Economy, payments exceeding PEN 2,000 or USD 500 must be made through banking channels (deposits, transfers, checks, cards), even if they are paid in installments less than that amount.
This issue is relevant for companies because the method of payment must be consistent with labor, accounting, and tax documentation.
What is the risk?
Companies that make payments that must be processed through the banking system but do not use the appropriate methods could face objections during a tax audit.
Among these challenges is the potential questioning of the deductibility of such expenses for third-category income tax purposes.
What should a company do?
Companies should establish internal procedures to:
- Pay wages using appropriate methods.
- Retain receipts of payment.
- Balance payroll records with bank transactions.
- Verify bank transfer limits.
- Document exceptions when applicable.
Bank transfers should not be considered just a financial obligation, but also a mechanism for preventing tax contingencies.
Source: Gestión (Peruvian Newspaper) — Information on cash salary payments and bank transfers, August 30, 2026.
VAG GLOBAL — Legal, Tax, and Business Consulting.