Multiplier Logo
Loading Animation Image

Panama Employment Guide

Your quick guide on talent and labor compliance norms in Panama


Panama City


Panamanian Balboa (PAB) or US Dollar (USD)



Payroll Frequency


GDP per Capita


Employer Tax


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 in 2022. Panama has seen significant growth in GDP in 2021, 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 Map

Local Universities

The top local universities in Panama are as follows:

Panama Uni1

Universidad de Panamá (University of Panamá)


Local: 1

World: 1665

Panama Uni2

Universidad Tecnológica de Panamá (Technological University of Panamá)


Local: 2

World: 1907

Panama Uni3

Universidad Latina de Panamá (Latina University of Panamá)


Local: 3

World: 4581

Panama Uni4

Universidad Católica Santa María La Antigua (Santa María La Antigua Catholic University)


Local: 4

World: 6268

Panama Uni5

Florida State University Panama City


Local: 5

World: 6462

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
Panama Talentsource

Talent Sourcing Tips

Top Local Job Boards:

Konzerta, Panama Jobs, LinkedIn

Number of LinkedIn users:


Top Recruitment Agencies:

Konzerta, Panama Jobs

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 2023

Date Name Type
1 Jan New Year’s Day National holiday
9 Jan Martyr’s Day National holiday
13 Feb Carnival / Shrove Tuesday / Pancake Day National holiday
29 Mar Good Friday National holiday, Christian
1 May Labor Day / May Day National holiday
3 Nov Independence Day National holiday
4 Nov National Symbols Day National holiday
5 Nov Colón Day National holiday
10 Nov Shout in Villa de los Santos National holiday
28 Nov Independence from Spain National holiday
8 Dec Mother’s Day National holiday
20 Dec National Day of Mourning National holiday
25 Dec Christmas Day National holiday, Christian

Employee Leaves

Type of Leave Time Period Mandatory
Annual/Earned Leave 30 days Yes
Sick Leave 18 days Yes
Maternity Leave 14 weeks Yes



Payroll 1

Payroll Cycle

The payroll cycle in Panama is Monthly.

Payroll 2

Minimum Wage

The minimum wage in Panama ranges from 1.91 PAB to 3.20 PAB per hour.

Payroll 3

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.


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


Employer Payroll Tax:

Fund Contribution
Social Security Tax 12.25%
Education Insurance Tax 1.5%

Employee Payroll Tax:

Fund Contribution
Social Security Tax 9.75%
Education Insurance Tax 1.25%

Employee Income Tax:

Annual Taxable Income Tax on Column 1 Tax on excess
0 to 11,000 PAB 0 0
11,000 to 50,000 PAB 0 15%
Above 50,000 PAB 5,850 25%


The standard rate of Value Added Tax in Panama is 7%.

Offboarding & Termination

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.

Panama Visa
Footer 24x5 New Img2x

Streamline payroll and compliance for your international workforce


Minimum Wage

Overtime Pay

Visa & Immigration