Expand your global workforce in Panama
Your guide to the employment landscape, working customs and local labor laws in Panama
Capital
Panama City
Currency
Panamanian Balboa (PAB) or US Dollar (USD)
Languages
Spanish
GDP per Capita
$15,388.06
Employer Tax
13.75%
Payroll Frequency
Monthly
Talent overview
Panama is the country that links Central and South America. It is ranked 65.4 in the freedom score, thus making it the 56th freest country. Panama has seen significant growth in GDP, with the country’s major contributors from services and industries. Out of 32, Panama holds the rank of 11th in the Americas region for economic development.
Major economic hubs:
Panama City, Chitre and Santiago
Skills in demand:
Engineer, HR Manager, Software engineer
Panama
Top local universities in Panama
Universidad de Panamá (University of Panamá)
Ranking
Local: 1
World: 1665
Universidad Tecnológica de Panamá (Technological University of Panamá)
Ranking
Local: 2
World: 1907
Universidad Latina de Panamá (Latina University of Panamá)
Ranking
Local: 3
World: 4581
Universidad Católica Santa María La Antigua (Santa María La Antigua Catholic University)
Ranking
Local: 4
World: 6268
Florida State University Panama City
Ranking
Local: 5
World: 6462
Top Local Job Boards:
Konzerta, Panama Jobs, LinkedIn
Number of LinkedIn users:
1,034,000
Top Recruitment Agencies:
Where to find talent
Top Local Job Boards:
Top Local Job Boards
Number of LinkedIn users:
Number of LinkedIn users
Top Recruitment Agencies:
Top Recruitment Agencies:
Salary Data
The salary of some of the common jobs in Panama are as follows:
| Job Title | Average Monthly Salary (PAB) | Average Monthly Salary (USD) |
| Financial Manager | 4170 PAB | 4170 USD |
| General Manager | 3460 PAB | 3460 USD |
| Business Development Manager | 3360 PAB | 3360 USD |
| Financial Analyst | 2690 PAB | 2690 USD |
| Business Analyst | 2640 PAB | 2640 USD |
| Project Manager | 2310 PAB | 2310 USD |
Employ in Panama
Employing in Panama
It is important to know about the employment laws, benefits, social security, deductions, and allowances in Panama before onboarding an individual. This section contains all the necessary information.
Employee Contract
The language of the employment contract must be in Spanish or any other language both parties can understand, as stated by the Panama Labor Law.
Probation Period
The probation period in Panama is 30 to 90 days.
Public and Provincial Holidays
| Date | Name | Type |
| January 1 | New Year’s Day | National Holiday |
| January 9 | Martyrs’ Day | National Holiday |
| March 3 | Carnival / Shrove Monday | Local Holiday |
| March 4 | Carnival / Shrove Tuesday / Pancake Day | National Holiday |
| March 5 | Carnival / Ash Wednesday | Local Holiday |
| April 17 | Maundy Thursday | National Holiday |
| April 18 | Good Friday | National Holiday |
| April 19 | Holy Saturday | National Holiday |
| May 1 | Labor Day / May Day | National Holiday |
| August 15 | Foundation of Old Panama City | Local Holiday |
| November 3 | Independence Day | National Holiday |
| November 4 | National Symbols Day | National Holiday |
| November 5 | Colón Day | National Holiday |
| November 10 | Shout in Villa de los Santos | National Holiday |
| November 28 | Independence from Spain | National Holiday |
| December 8 | Mother’s Day | National Holiday |
| December 20 | National Day of Mourning | National Holiday |
| December 24 | Christmas Eve | National Holiday |
| December 25 | Christmas Day | National Holiday |
| December 31 | New Year’s Eve | National Holiday |
Employee Leaves
| Type of Leave | Time Period | Mandatory |
| Annual/Earned Leave | 30 days | Yes |
| Sick Leave | 18 days | Yes |
| Maternity Leave | 14 weeks | Yes |
Leave Compliance
Payroll in Panama
Payroll cycle
The payroll cycle in Panama is Monthly.
Overtime pay
The overtime pay in Panama is 125% of the regular wage if the overtime is done in a working day, whereas the 150% for the work on a holiday or rest day. If the overtime is done at night shift, the pay increases to 175% of the regular wage.
How taxes work
Employer Payroll Tax:
| Scheme | Contribution |
| Old-age, Invalidity, and Survival Regime | 4.25% |
| Old-age, Invalidity, and Survival Regime (13th Month) | 10.75% |
| Work Risks | Premiums established according to the risk category of the activity carried out |
| Sickness and Maternity Benefits | 8% |
| 13th Month pay | 10.75% |
Employee Payroll Tax:
| Scheme | Contribution |
| Old-age, Invalidity, and Survival Regime | 9.25% |
| Old-age, Invalidity, and Survival Regime (13th Month) | 7.25% |
| Work Risks | |
| Sickness and Maternity Benefits | 0.5% |
| 13th Month pay | 7.25% |
Employee Income Tax:
| Annual Income
(US Dollars) |
Income Tax Rate |
| 0 to 11,000 | 0% |
| 11,000 to 50,000 | 15% |
| More than 50,000 | 25% |
VAT:
The standard rate of Value Added Tax in Panama is 7%.
Bonus
13th Month Pay:
The 13th-month pay is mandatory in Panama, and it is given in three installments, April 15, August 15, and December 15.
Employee Benefits:
- Leaves
- Social Security benefits
- Education Insurance
- Accidental Insurance
Employee offboarding
Termination in Panama depends on the employment agreement between both parties or a collective agreement. Both the parties can terminate the contract based on mutual agreement or with a proper reason of dismissal from the employer.
The notice period in Panama is 30 days.
In Panama, the severance pay is 3.4 weeks for each year worked. However, severance pay is only provided if there is an unjustified dismissal.
Visa and
immigration
According to the National Immigration Service Panama, any individual who needs a work visa or permit, needs to present all the personal documents along with an employer offer letter. However the documents must be translated into spanish language. The work permit allows an individual to stay for 9 months within the country, which further can be renewed.
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Overtime Pay
Minimum Wage
- Hourly Minimum Wage: Varies from PAB 1.64 for small-scale agricultural workers to PAB 4.95 for international flight cabin crew.
- Domestic Workers’ Minimum Wage:
- Region 1: PAB 340 per month
- Region 2: PAB 315 per month
Overtime Pay
Visa and Immigration