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Panama Employment

Panamanian taxes in relation to employement are very complex and high. It requires a very detailed level of administration as advances are commonly paid, bonuses depend on the accumulated salary in the past four months, vacation can be paid out of taken. Deductions vary depending on filing status and also type of work performed.

A tax professional should always be consulted before hiring employees in Panama. The employeer will need to follow so many rules that the administration can in itself be a full time and unnecessary job. Having a package with all the information up front, such as standard forms used will be a great time saver.

The additional tax on 100 dollar in salary in Panama is in general 55 % and that does not include employee deductions and personal income tax. In other words, the overall tax pressure in Panama in relation to employment is by international standards quite high.

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