Overview

Capital
Panama City
Currency
United States Dollar (USD)
Date Format
dd/mm/yyyy

Taxes

Employer
12.25% - Social security
2.25% - Workers' severance payments
1.50% - Education contribution
Employee
9.75% - Social security
1.25% - Education contribution
0% - 0 - 11,000 US$
15% - 11,000 - 50,000 US$
25% - 50,000 and above US$

Minimum Wage

General

Minimum wage is $416 per month.

Payroll Contributions

Social Security

Employer: contributes 4.25% of employee’s gross monthly earnings greater than 500 balboas.

Employee: contributes 8.16% of gross monthly earnings above 500 balboas.

Pension Fund
Employee: contributes 9.25% of the first 500 balboas earned per month. No monthly salary ceiling.
Additional Benefits
Employer contributes 1.5%.
Employee contributes 1.25%.

Leave

Public Holidays

There are 13 paid public holidays.

Termination

Termination Process

If the employee has been in the company for less than 2 years, they will receive a month’s notice. If over 2 years, no notice is required.

Notice Period

Employee must provide 15 days written notice.

Severance Pay

Severance pay is counted at the rate of one week’s wages for each year the employee has worked for the company. The employee also receives vacation payment which is 30 days for each 11 consecutive months worked. In additional they also receive the 13th month payment.

VAT

General

VAT is 7% standard rate.