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$249/month
$49/month
2% of gross salary / month
Horizons ensures day-to-day guidance to help your business navigate Panama labor laws and regulations. Horizons also ensures payroll is processed weekly or fortnightly (the standard periods in Panama ), and that taxes are withheld as required.
As the Panama Employer of Record, Horizons is responsible for employee income tax withholding, payment of payroll taxes to state authorities, and submission of tax returns to the Panama Tax Office.
Partnering with our Panama EOR is the quickest and most cost-effective way to enter the Panama market.
Note, a Panama Employer of Record is also known as a Panama Professional Employer Organization (PEO).
Hire in Panama, and pay employees through our platform or app.
Cost Our Panama EOR solution is the most affordable on the market.
Fast onboarding in Panama, hire in as little as 24 hours.
We draft labor contracts compliant with Panama labor law.
We administer all mandatory benefits and contributions in Panama.
It doesn’t stop with Panama — we are an international EOR
Contracts of employment can be either verbal or written in Panama, but we always recommend producing formal written contracts every time you hire. These contracts should contain all necessary details of the employment arrangement, such as working hours, entitlements, benefits, salary, and so on. They should also be written in Spanish and reference either US dollars or Panamanian balboa (although US dollars are generally preferable).
3 months (standard)
30 – 90 days (standard)
0.5 months’ salary: 0 – 6 months’ service
0.75 months’ salary: 6 – 9 months’ service
1 month’s salary: 9 months’ – 1 year’s service
3 months’ salary: 1 – 2 years’ service
4.5 months’ salary: 2 – 4 years’ service
5.2 months’ salary: 4 – 5 years’ service
9.75 months’ salary: 5 – 10 years’ service
14.8 months’ salary: 10 – 20 years’ service
3 months (standard)
30 – 90 days (standard)
0.5 months’ salary: 0 – 6 months’ service
0.75 months’ salary: 6 – 9 months’ service
1 month’s salary: 9 months’ – 1 year’s service
3 months’ salary: 1 – 2 years’ service
4.5 months’ salary: 2 – 4 years’ service
5.2 months’ salary: 4 – 5 years’ service
9.75 months’ salary: 5 – 10 years’ service
14.8 months’ salary: 10 – 20 years’ service
The standard working week for employees in Panama is 44 hours spread across five days. Any time worked beyond this should be compensated at 125% of normal pay, or 175% for evening shifts.
There are several annual public holidays in Panama, and employees generally receive the following as paid leave from work:
Panama has a range of national public holidays that are celebrated annually. In 2025 these holidays are:
| Date | Holiday name |
|---|---|
| 1 Jan Wednesday | New Year’s Day |
| 9 Jan Thursday | Martyr’s Day |
| 3 Mar Monday | Carnival Monday |
| 4 Mar Tuesday | Mardi Gras |
| 5 Mar Wednesday | Ash Wednesday |
| 18 Apr Friday | Good Friday |
| 1 May Thursday | Labor Day / May Day |
| 3 Nov Monday | Separation Day |
| 4 Nov Tuesday | Flag Day |
| 5 Nov Wednesday | Colón Day |
| 10 Nov Monday | Los Santos Uprising Day |
| 28 Nov Friday | Panama’s Independence Day |
| 8 Dec Monday | Mother’s Day |
| 20 Dec Saturday | National Mourning Day |
| 25 Dec Thursday | Christmas Day |
Female employees in Panama are entitled to 14 weeks of paid maternity leave, with up to six weeks before the birth and eight after. Fathers in Panama can take up to three days of paid paternity leave for the birth of a child.
Employees in Panama are generally entitled to 30 days of notice prior to termination of their employment contract. Severance payments, if applicable, usually equal around three to four weeks of pay for every year of service with an employer. Probation periods are limited to three months.
Employers and most employees in Panama must both contribute to social insurance for the employees. Contributions equal 6.75% of salary for employees and 2.75% for employers. The government also contributes 1.04%.
Panama’s territorial income tax laws are very favorable for many, particularly foreign workers. Panamanian sourced income is taxed progressively at rates of between 0% and 25%.
Corporate tax in Panama is also territorial in nature, and Panama-sourced income is taxed at a rate of 25%.
Panama has a public healthcare system, although many employers do provide private insurance as part of their benefits packages.
Minimum wages in Panama vary significantly based on the type of work, such as agricultural, manufacturing, construction, and so on. For instance, it is approximately USD 2.50 per hour for industrial workers. For this reason, it is important to understand which rates apply to your workers whenever hiring in Panama.
It can be difficult to understand and set up employee benefits in Panama, and it can require a lot of time, effort, and investment on the part of employers. However, it is crucial that you adhere to compensation and benefits laws as you can be subject to large fines and legal issues if you fail to.
Horizons can help you bypass this element of your Panama expansion by offering benefit system outsourcing that can save you time and money. Our experts will advise you on the best course of action and take care of your benefit setup and management, helping you focus on the rest of your expansion.
Hire borderless talent with Horizons
With Horizons, you get quick service, transparent pricing, and expert support.
Generally speaking, the terms “Panama PEO” and “Panama EOR” are used interchangeably.
In most cases, Horizons’ Panama EOR can hire & onboard your employee within 24 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Panama.
It is possible to get a work visa in Panama. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Panama are limited, however—get started today to secure your employees’ visa spot.
Holiday Schedule in Panama [2025]
