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Partial: some charges not included, see notes
Mandatory employer contributions in Panama
| Contribution | Employer rate | Monthly cap |
|---|---|---|
| Social security (from 1 April 2025) | 13.2% | none stated |
| Educational insurance | 1.5% | none stated |
Employer cost at three salary levels
| Annual salary | Employer contributions | On-cost % | Total cost | Total in USD |
|---|---|---|---|---|
| 19,800 USD | 2,920 USD | 14.8% | 22,720 USD | $22,720 |
| 39,600 USD | 5,841 USD | 14.8% | 45,441 USD | $45,441 |
| 79,200 USD | 11,682 USD | 14.8% | 90,882 USD | $90,882 |
The examples use 1×, 2× and 4× Panama’s 2025 GDP per person in local currency (19,790 USD, World Bank) as reference salaries. GDP per person is not a wage; it is a neutral, cited yardstick for low, middle and senior pay.
Worked example
For a salary of 39,600 USD a year, the employer adds about 5,841 USD (14.8%) in mandatory contributions, for a total of 45,441 USD, about $45,441 at the 2025 average exchange rate. The rate is roughly flat across salaries (14.8% to 14.8%), so on-costs scale with pay.
What is not included
- Employer social security rises to 14.25% from March 2027 and 15.25% from March 2029. Professional risk tax of 0.33%–6.25% by industry also applies (not included). PwC’s corporate page still lists the older 12.25% rate; the individual page reflects the 2025 reform.
How to budget a hire in Panama
- Start from the gross salary you plan to offer in USD.
- Add the mandatory contributions above. The calculator applies caps and salary bands automatically.
- Add benefits customary in Panama (health cover, bonuses, extra month salaries) as a percentage in the calculator.
- If you have no local entity, add an employer-of-record fee. Deel and Remote both list EOR from $599 per employee per month on their public pricing pages (checked 23 October 2026).
- Convert to your budgeting currency with a current rate. The USD figures here use the World Bank 2025 average.
Compare Panama with other countries in the any-country comparison, or see whether an EOR, contractor or own entity is cheaper.
Source: PwC Worldwide Tax Summaries: Panama, other taxes, last reviewed 04 August 2026 (checked 23 October 2026). Exchange rate and GDP per capita: World Bank (2025, indicators PA.NUS.FCRF and NY.GDP.PCAP.CN). HireCost transcribes the rates; it does not invent or estimate missing ones.
Frequently asked questions
How much does it cost to employ someone in Panama?
On a salary of 39,600 USD, mandatory employer contributions add about 14.8%, for a total of roughly 45,441 USD a year before benefits (PwC, reviewed 04 August 2026).
What are employer social security contributions in Panama?
Social security (from 1 April 2025) 13.2%, Educational insurance 1.5%.
Is the Panama data verified?
Partly. The rates shown are cited, but some employer charges are not included; they are listed under "What is not included".