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Last updated: July 26, 2026
Employment Cost Calculator for Panama
Calculate your complete hiring costs for Panama employees, including payroll taxes, social security contributions, employee benefits, and management fees. This salary calculator provides accurate employer cost estimates for informed hiring decisions.
Calculate Employment Costs
Employment Cost Breakdown
Select a country and enter a salary to see the employment cost breakdown
Employer Tax Contributions
| Tax Type | Rate | Base |
|---|---|---|
| Social Security | 13.25% | Gross Salary |
| Education Tax | 1.5% | Gross Salary |
| Professional Risk Insurance | 0.98% - 5.67% (variable by industry) | Gross Salary |
Filing & Compliance
- Monthly payroll tax payments (Social Security, Education Tax, Professional Risk Insurance, Income Tax Withholding) due by the 15th of the following month.
- Annual income tax return detailing employee salaries and withholdings due by March 31st.
- Provide employees with income certificates summarizing annual income and taxes withheld by mid-February.
Income Tax Brackets
| Income Range | Tax Rate |
|---|---|
| Up to USD 11,000 | 0% |
| USD 11,001 to USD 50,000 | 15% on amount over USD 11,000 |
| Over USD 50,000 | USD 5,850 + 25% on amount over USD 50,000 |
Employee Contributions
| Deduction Type | Rate | Cap |
|---|---|---|
| Social Security (CSS) | 9.75% | No maximum limit |
| Education Tax | 1.25% | No maximum limit |
| Professional Risk Insurance | Varies (0.98% to 5.67%) | Varies |
Personal Allowances
- Basic annual allowance for resident taxpayers.
- Allowance for dependents (e.g., spouse, children).
- Interest on mortgage loans for a primary residence (up to USD 15,000 annually).
Written by
Lucas Botzen
Lucas Botzen is the Founder of Rivermate, a global employment platform that helps companies hire, employ, and manage talent internationally. Since founding Rivermate in December 2020, he has focused on building practical solutions that simplify international payroll, benefits, taxes, contracts, and employment compliance for remote teams. Before Rivermate, Lucas co-founded and co-directed Boloo, an e-learning and software company that helped entrepreneurs start and grow e-commerce businesses. He scaled Boloo to more than €2 million in annual revenue before successfully exiting the business in 2020. Lucas holds a Bachelor’s degree in Business Innovation from Avans University of Applied Sciences. His background in entrepreneurship, technology, automation, and remote work continues to shape his approach to making global employment simpler and more human.
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