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Hiring guidelines in Panama
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Hiring guidelines in Panama
Pay & taxes
Leave policy
Termination
Time-off
Additional info
Minimum Wage Requirements
The minimum wage will depend on the sector of the company and can range from USD 275 to USD 970.
Individual Income Tax
The individual income tax ranges from 0% to 25%. Income tax is calculated according to progressive rates.
| Gross Annual Income | Tax Rate (%) |
|---|---|
| Up to USD 11,000 | 0% |
| Up to USD 50,000 | 15% |
| Over USD 50,000 | 25% |
Payroll Cost
The employer cost is generally estimated at 38% of the employee salary (inclusive of work-from-home allowance).
- Social security - 12.25%
- Educational security - 1.50%
- Professional risks - 2.10%
- 13th Salary - 8.33%
- Vacation pay - 9.09%
- Seniority premium - 1.92%
- Compensation - 0.33%
- Work-from-home Allowance USD 50
Overtime Pay & Maximum Hours
Overtime payment is mandatory. Hours outside of standard work hours are considered overtime. Employees can work up to three extra hours per day. For additional hours, employees are paid:
- 125% of the hourly rate, on a standard day
- 150% of the hourly rate, after 6 pm
- 175% of the hourly rate for the night shift employees
Standard working hours are eight hours per day, 40 hours per week. The standard workweek is from Monday to Friday. However, the standard workweek can be extended to 48 hours per week from Monday to Saturday.