Commissions and variable pay in Peru: when they're owed, and how they count toward your CTS, bonus and vacation pay

Commissions do count — the law includes them through a specific formula

A widespread assumption is that only fixed salary counts toward CTS, the statutory bonus, and vacation pay, and that commissions are separate income an employer may or may not recognize when settling up. That’s not the case. Article 17 of the Compensation for Time of Service (CTS) Law (Supreme Decree N.° 001-97-TR) specifically addresses “commission-based workers, piece-rate workers, and in general workers who receive imprecise main pay,” and establishes that their computable pay is calculated on the average of what they received during the relevant semester.

That same formula doesn’t stop at CTS: the vacation regulation (Supreme Decree N.° 012-92-TR, Article 17) expressly points to that same Article 17 to calculate the vacation pay of commission-based workers, and the bonus regulation (Supreme Decree N.° 005-2002-TR, Article 3.1) does the same for variable main pay. In practice, Peru uses a single semester-averaging formula for the three most important settlements a commission-based worker can receive.

How the average is calculated

The calculation is straightforward: the commission amounts you received during the six months of the relevant period are added up, and the result is divided by six. If you worked less than six months in that period — say, you recently joined the company — the daily average of what you received during that shorter period is used instead.

That means one exceptionally good month doesn’t set your settlement, but neither does one exceptionally bad one: the average smooths out both extremes across the semester.

When the commission is complementary pay, not your main salary

If your commission isn’t your main pay but an extra payment on top of a fixed base salary — a sales incentive, for example — the rule shifts slightly. Article 16 of the CTS Law requires that complementary payment, “of a variable or imprecise nature,” to have been received “at least three months within each six-month period” for it to count as regular and be included in your computable pay. The bonus regulation repeats that same threshold for complementary pay of an imprecise nature.

In other words: you don’t need to have earned that commission all six months. Receiving it in three of those six months already meets the regularity requirement, and from there the same average applies (the sum divided by six).

What doesn’t count: occasional, discretionary payments

Article 19 of the CTS Law expressly excludes from computable pay “extraordinary bonuses or other payments the worker receives occasionally, as a discretionary gift from the employer.” This is the real distinction to draw: it isn’t that a payment labeled a “bonus” is automatically excluded — it’s that a genuinely sporadic, discretionary payment, something the employer chooses to give once, outside your usual pay structure, isn’t computed.

If a payment repeats with the regularity the law requires, it stays computable no matter what your employer calls it on the pay stub.

A special case: exclusive insurance agents

The vacation regulation includes an additional rule for one specific group: exclusive insurance agents must have the average of their policy-renewal commissions from the semester before their vacation added to their vacation pay. It’s a concrete example of how the law has had to adapt the general formula to particular commission structures, and it’s worth checking if you work in that field.

What to do if your settlement didn’t include the average of your commissions

If, checking your CTS, bonus, or vacation settlement, you don’t find the average of your commissions reflected in the calculation, you have the right to ask for it to be corrected. The first step is raising it directly with your employer, backed by your pay stubs from the months in the relevant semester. If they don’t correct it, you can file a complaint with SUNAFIL.