The Income Tax in Peru affects employees and companies, but some workers are exonerated if their income does not exceed the new limit.
By 2025, the increase in Tax Tax Unit (UIT) A S/5,350 It has modified the income threshold exempt from Income Tax in Peru. This change directly influences the fifth category workers, who could be free of retentions if their income does not exceed the new established limit.
Although both employees and companies must comply with the payment of this tax, not all workers are subject to this obligation, since those with salaries below the legal threshold are exonerated.
Fifth Category Income Tax: What is the maximum amount you should win per month to not pay?
The Fifth Income Tax applies to those who have annual income greater than 7 UIT, which is equivalent to S/37.450 in 2025. Consequently, workers who receive up to S/2,675 per month, considering 14 salaries per year, will not be subject to this retention.
Tax Law specialist Jorge Picón explained that legislation defines a threshold based on the “Poverty line” to ensure that workers with lower income are not affected by this tax. “The standard establishes that the tax applies from a point called Poverty Line,” he added.
Fifth Category Income Tax: How to calculate?
The procedure for determining this tax includes several steps:
- Calculation of annual income: All the worker’s income is added during the year, including bonuses and bonuses.
- 7 UIT deduction: This amount of the total income is subtracted. If the result is less than that limit, the worker is exempt.
- Application of rates according to income sections:
- 8% for revenues from 0 to 5 UIT.
- 14% for income from 5 to 20 UIT.
- 17% for income from 20 to 35 UIT.
- 20% for income from 35 to 45 UIT.
- 30% for income greater than 45 UIT.
- Monthly tax distribution:
- From January to March, the annual tax is divided by 12.
- In April, the remaining balance is divided by 9.
- From May to July, the remaining balance is divided by 8.
- In August, it is divided by 5.
- From September to November, it is divided by 4.
- In December, it adjusts according to previous withholdings.
Source: Larepublica
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