Hire Employees & Contractors


Compliantly hire your distributed team members in


Person working on laptop

Hiring in


isn't so simple. Borderless can help.

To hire new employees in


, your business must have a local legal entity or an Employer of Record like Borderless in place already. Then there’s the management of local employment compliance, taxes, benefits, payroll, and more. Hiring contractors poses similar challenges.

Borderless handles all of that for you, so you can focus on getting to work with your new team member in


while staying fully compliant with local laws and compliance.

Primary Language



Panamanian Balboa (B/, PAB) and USD

Payroll Frequency

Every 15th and 30th of the month

Public Holidays

12 days

Employer Taxes


Cost of Living Index

$$$ (58 of 140, 2023)

Statutory Leave

30 days

Sick Leave

18 days

Maternity Leave

14 weeks

Important: Risks of misclassification

In many countries like


, the treatment of employees and contractors is different. If you misclassify a new team member, you could be subjected to penalties and fines. Let Borderless get this right for you, so you don’t have to worry.

Payment Information

Minimum Wage

The minimum wage in Panama is USD 275 - 970 per month.

Overtime Pay

Overtime payment is mandatory. Overtime is defined as any time worked beyond the normal working day, which can amount to a maximum of three hours per day. Compensation is as follows: 

  • 125% on regular days 
  • 150% after 6PM 
  • 175% during night shifts 

Standard working hours are eight hours per day, 40-48 hours per week. The standard work week is from Monday to Friday or Saturday.

Additional Pay

Employees received a mandatory thirteenth-month salary. 

Payroll Cycle

For Borderless customers, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.

Employer Costs & Taxes

  • 12.50%: Social Security Contribution
  • 8.33%: Decimo Tercer Mes (13th Salary)
  • 1.50%: Educational Insurance
  • Varied: Accident insurance
  • 0.90%: Social Security on thirteenth-month salary

Employee Costs & Taxes

  • 9.75%: Social Security
  • 0.98%: Riesgo Profesional (Accident insurance)
  • 1.25%: Educational Insurance
  • 0%: 0 - $11,000
  • 15%: $11,000 - $50,000
  • 25%: $50,001 and above

Employment Information

Termination Process

According to Panamanian labor law, long-term employment contracts can only be terminated with a written notice citing a just cause, such as fraud, negligence, dishonesty, or any other offenses relating to the employee's job. If employees believe their termination was made without cause, they may seek justice in a labor court.

Notice period

If the employee resigns, the typical notice period is 15 days. In case of termination, it’s usually 30 days. 

Probation Period

The maximum length of probation is 3 months.

Severance Details

Every employee on an indefinite contract is entitled to seniority premiums upon the termination of a contract. These amount to one week’s pay for every year of service and are paid no matter the reason for termination. 

Employees fired without just cause are also entitled to severance pay. This is calculated based on tenure, ranging from two weeks to seven months.

Benefits of working in a country abroad

Borderless Benefits Packages in


When the world is your competition, it pays to incentivize new hires and existing alike. Borderless benefits packages typically include:

Medical Insurance
Dental Insurance
Vision Insurance
Life Insurance
Retirement Contributions

Learn how to hire quickly and easily in


Book your demo of Borderless to help you hire, pay, and take care of new employees and contractors in 170+ countries.

Book a demo