Panama EOR & PEO

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Hire in Panama

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).

Facts & Stats

stay compliant with Panama labor laws

Employment Laws

Employment contracts in Panama

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).

Fixed-term

Indefinite

Working hours in Panama

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.

National holidays in Panama

There are several annual public holidays in Panama, and employees generally receive the following as paid leave from work:

Holiday Schedule in Panama [2024]

Panama has a range of national public holidays that are celebrated annually. In 2024 these holidays are:

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

Vacation in Panama

Employees in Panama are generally entitled to 30 days of paid vacation leave annually.

Panama's healthcare system

Sick leave in Panama

Employees in Panama can usually take up to 18 days of paid sick leave each year.

Maternity and paternity leave in Panama

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.

Employee severance and terminations in Panama

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.

Tax laws and withholdings in Panama

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%.

Health insurance in Panama

Panama has a public healthcare system, although many employers do provide private insurance as part of their benefits packages.

hassle-free Panama compensation & benefits

Compensation & Benefits

Compensation laws in Panama

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.

Benefit management 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.

Panama Employer Of Record Peo

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Hire in Panama

Employment Laws

Working hours in Panama

National holidays in Panama

Compensation & Benefits

Frequently asked questions

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With Horizons, you get quick service, transparent pricing, and expert support.

Frequently asked questions

What is the difference between a Panama PEO and a Panama EOR?

Generally speaking, the terms “Panama PEO” and “Panama EOR” are used interchangeably.

Can an EOR in Panama hire both local and foreign nationals to work in Panama?

An EOR in Panama can feasibly hire both local and foreign nationals to work in Panama.

However, the ability of Horizons to sponsor your foreign national employee in Panama may be limited due to visa quotas practiced in many countries.

Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.

How long does Horizons' Panama EOR service take to hire an employee?

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.

Is it possible to get a work visa 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.

Panama EOR & PEO

Start hiring in Panama

Simple, compliant hiring with Horizons EOR

Hire in Panama

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stay compliant with Panama labor laws

Employment Laws

Employment contracts in Panama

Fixed-term

Probationary period

Termination notice period

Severance

Indefinite

Probationary period

Termination notice period

Severance

Working hours in Panama

National holidays in Panama

Vacation in Panama

Panama's healthcare system

Sick leave in Panama

Maternity and paternity leave in Panama

Employee severance and terminations in Panama

Tax laws and withholdings in Panama

Health insurance in Panama

hassle-free Panama compensation & benefits

Compensation & Benefits

Compensation laws in Panama

Benefit management in Panama

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