Salaried workers are waiting to receive the Compensation for length of service, a benefit provided by their employers on a semiannual basis, specifically in May and November. Funds deposited this year, along with those previously accumulated in beneficiaries’ accounts, can be withdrawn in full until December 31. Despite this, some workers do not know the exact date of their payment, which is why in this Depor note we provide details about it. Have you already been deposited?
Compensation for Time of Service (CTS) is a work benefit provided by the company to each employee on its payroll. Its purpose is to protect the worker at the end of their employment relationship. It is important to note that these deposits are made twice a year, with the first payment in May and the second in November. It is relevant to note that the amount assigned may vary depending on the labor regime of the company in which the employee works.
Who charges the CTS?
- Employees of the private regime who work, at least, a day of four hours a day.
- Small business workers who receive 15 daily payments per full year of services. The maximum daily remuneration is 90.
- In the case of agricultural workers, the CTS is included in the daily remuneration at a rate of 9.72% of the basic salary. However, the employee can request the payment in a differentiated and semi-annual manner, as in the common labor regime.
- Domestic workers have recently been included. They must be paid the CTS under the same conditions as the common labor regime.
When is the last day to pay the CTS?
Companies make the deposit of Compensation for Time of Service (CTS) on two annual occasions: the first takes place in May (it has already been completed), and the next is scheduled for November, with the 15th of that month as the deadline. . It is crucial to keep in mind that the amount allocated can fluctuate, as it is linked to your seniority in the company and the salary you receive.
Calculate how much you will receive in your CTS
According to what was explained by associate partner from the Labor Area of EY Peru, Mauricio Matos, to the Andina agency, the calculation of the CTS is carried out as follows:
- If the worker receives an imprecise or variable main remuneration, the CTS will be the result of the average salary received by the worker in the six months that comprises each period. This means that the salary is averaged from November to April (for the May CTS) or from May to October (for the November CTS).
- If the worker receives a fixed remuneration, but has imprecise or variable complementary remuneration (for example, he receives overtime), these amounts will be included in the calculation as long as they have been received 3 or more times in the November period of the year prior to April (for the May CTS) or in the period from May to October (for the November CTS), in which case the concepts are added and divided by 6.
- To calculate the amount, take into account your monthly salary, then add 1/6 of the bonus (divide your bonus by six). Divide that amount by 360 and then multiply it by the days worked (for the entire semester, it would be 180).
Does the work modality (in-person or remote) influence CTS?
No because the payment should be the same for those who work in person, semi-in person or even remotely. It is important to keep in mind that this labor benefit corresponds to every worker in the private labor regime who has an indefinite, fixed-term contract.
What is the amount you can withdraw from your CTS?
Currently, there is no specific amount that workers can withdraw. In reality, the amount depends on the balance you have in the account and the money you need to have available. Remember that as long as the law remains in force and you have a balance in your account you can withdraw the amount you want and also as many times as you want.
Until when can you have your CTS?
The last day to withdraw the CTS is December 31, 2023. Remember that if you resigned or were fired you do not need to rely on the rule to do this procedure. Likewise, after that date, workers will be able to obtain their CTS if they have accumulated an excess of four salaries.
What do you need to withdraw your CTS?
You can do this procedure in person or online (through the bank’s app). To choose the right one you must take into account the amount you want and also the bank where your money is located.
- In person: Go to the bank where you have your CTS account and use their ATMs or go to the counter if the amount is greater than 2,500 soles. Remember that to complete the process with an advisor you must bring your ID and the account card.
- From a website or app: Download the app of the bank where your money is and look for the alternative transfer between accounts. You should know that if the money will be sent to another bank, they will probably charge you a commission that will be deducted from your compensation for service time. To carry out the procedure online, you only need to enter the bank’s website.
Will you be able to withdraw your CTS in 2024?
Yes and you won’t have to quit to do it. You only need to have accumulated four salaries (depending on your salary) to be able to request the surplus. To request the money you only have to go to the bank where your money is and request it.