Panama

Last Update by Katie, 14 Jun 2024

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Exchange Rate

23 Jun 2024

 

Cost of Living

Indicative value for a working adult in a city: Panama CIty

Publicly available data (Numbeo, etc..), verified by Marco’s in-country staff

Living Requirement Indicative Amount (USD)
McDonalds Set Meal 8
Monthly Train and Bus Tickets 25
3 Bedrooms Rental (City Center) 1,991
3 Bedrooms Rental (Outskirt) 1,303

Current Inflation Rate

3.4%

Wage

Minimum Wages

  • From January 2024 for domestic workers: Region 1- 340 USD per month, Region 2, 315 USD per month

Median Salary

Estimated based on general positions such as HR, Accounting, Admin roles, in tier one cities.

Job Level Monthly Salary (USD)
Entry-Level
Fresh Graduate
900
Mid-Level
5 Years
1200
Experienced & Managerial Level
10 Years
1800
Specialized & Senior-Level
15 Years
2600

Annual Salary Growth

3.5%

Statutory Contribution

Country Level

Type Employer Rates Employee Rates Notes
Social Security (CCS)
(Includes health, sickness, maternity and pension or retirement)
12.25%
No capping
9.75%
No capping
All staff
Unemployment 1.92% - All staff
Worker's Accident Insurance (CSS) 0.98-5.67%
Rate Determined by CSS
- All staff
Payroll Taxes
(Education Insurance and Professional Risk)
1.5%- Education Insurance
0.33% - 6.25% - Professional Risk
1.25% - Education insurance All staff and companies
13 Month Salary (Mandatory) 1 month gross salary
Paid in 3 installments on15th April, August and December
- All staff

Other Benefit

Other common employment benefits in Panama include:

  • Life Insurance: Up to 100 USD per month
  • Private Medical Insurance: Up to 300 USD per month
  • Dental Vision Insurance: Up to 40 USD per month
  • Public Transportation Pass: 25 USD per month
  • Phone: 30 USD per month
  • Internet: 50 USD per month

Income Tax

Residents

  • Tax period: 1st January - 31st December
    Filing Due Date: 31st March the following year

Country Level

Taxable Income Rate
0-11,000 0%
11,000 - 50,000 15% on excess
Over 50,000 5,850 USD on income + 25% on excess

Non-residents

  • Flat rate 15% or resident rate, which ever is higher.

Working Hours

Statutory

48 hours
8 hours a day, 6 days a week

Night work: 42 hours- 7 hours a day, 6 days a week

Typical practice

48 hours
Monday - Saturday

Overtime

Capped 3 hours a day

  • Daytime: 125% regular hourly pay
  • Rest Days and Holidays: 150% regular hourly pay
  • Night work: 175% regular hourly pay

Employment Contract

Fixed-Term

Used for independent contractors, freelancers or positions that require specialised technical skills

Contract Format

Must be written in Spanish or a mutually understandable language

Payroll Currency

USD preferred

Probation

For most collective agreements- typically up to 3 months

Contract Period

Independent contractors and freelancers: Up to 1 year- can be renewed as many times as required long as the total duration does not exceed 1 year
Roles with specialised technical skills: up to 3 years- can be renewed as many times as required long as the total duration does not exceed 3 years

Termination

  • Voluntary notice
    - 15 days
  • Involuntary notice after probation:
    - Under 2 years' service: 30 days
    - 2 - 5 years of service: 60 days
    - 5+ years of service: 90 days
  • Severance:
    Dismissal with cause (not economic): no severance
    Dismissal withour cause: Severance due
    - 0 – 6 months’ service: 0.5 months’ salary
    - 6 – 9 months’ service: 0.75 months’ salary
    - 9 months – 1 year service: 1 month’s salary
    - 1 – 2 years' service: 3 months’ salary
    - 2 – 4 years' service: 4.5 months salary
    - 4 – 5 years' service: 5.2 months' salary
    - 5 – 10 years' service : 9.75 months' salary
    - 10 – 20 years' service: 14.8 months' salary

Public Holiday

11 days

Country Level

Date Name
01 Jan New Year's Day
09 Jan Martyrs' Day
13 Feb Carnival
29 Mar Good Friday
01 May Labor Day
03 Nov - 04 Nov Separation Day
05 Nov Colón Day
10 Nov - 11 Nov Uprising of Los Santos Holiday
28 Nov Independence Day
08 Dec - 09 Dec Mother's Day
20 Dec National Mourning Day
25 Dec Christmas Day

Leave

Leave Type Entitlement Notes
Annual Leave 30 Calendar days All Staff after 11 months' service
Sick Leave 18 working days All full- time staff after 3 months' service
Maternity Leave 14 weeks
6 weeks before birth, 8 weeks after
Staff full-time staff with 9 months Social Security contributions
Paternity Leave 3 working days All full time expectant fathers
Unpaid Infant Care Leave 6 working days All staff with a citizen baby
National Reserve Service Leave Up to 90 days per year for active duty All staff aged 18 - 45 are part of the National Reserve

Reference

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