The Republic of Panama lies at the crossroads of the North and South American continents, and the Atlantic and Pacific oceans. Stretching over 75,517 square kilometers, Panama shares a border with Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north, and the Pacific Ocean to the south. The country is known for the Panama Canal which connects the Atlantic and Pacific oceans across the Isthmus of Panama. The canal is one of the two most strategic artificial waterways in the world. Almost 75% of the country’s gross domestic product is accounted for by the services sector, mainly because of offshore banking and canal traffic. The services sector also employs 75% of Panama’s workforce.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Panama.
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The Republic of Panama lies at the crossroads of the North and South American continents, and the Atlantic and Pacific oceans. Stretching over 75,517 square kilometers, Panama shares a border with Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north, and the Pacific Ocean to the south. The country is known for the Panama Canal which connects the Atlantic and Pacific oceans across the Isthmus of Panama. The canal is one of the two most strategic artificial waterways in the world. Almost 75% of the country’s gross domestic product is accounted for by the services sector, mainly because of offshore banking and canal traffic. The services sector also employs 75% of Panama’s workforce.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Panama.
The national holidays mentioned below are valid for the year 2025.
| January 1 | New Year's Day | |
| January 9 | Martyrs' Day | |
| March 4 | Carnival / Shrove Tuesday | Movable |
| April 18 | Good Friday | Movable |
| May 1 | Labor Day | |
| November 3 | Separation Day from Columbia | |
| November 5 | Colon Day | |
| November 10 | Uprising of Los Santos | |
| November 28 | Independence Day from Spain | |
| December 8 | Mother's Day | |
| December 20 | National Mourning Day | |
| December 25 | Christmas Day |
The approximate time for sharing the contract with an employee in Panama is 10 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
The benefits offered by the social security system include:
An overview of employer contributions towards social security is given in the table below:
| Insurance | Employer Contribution |
| Social Insurance | 12.25% |
| Education Tax | 1.5% |
| Unemployment | 2.25% of quarterly payroll |
| Accident Insurance | 0.33% to 6.25% depending on the type of industry |
The maximum daily hours of work is eight hours (maximum 48 hours per week). The maximum night shift is seven hours (maximum 42 hours per week). The maximum duration of a mixed shift (day and night work) is seven-and-a-half hours (maximum 45 hours per week).
Maximum overtime permitted in one day is three hours, up to a maximum of nine hours in one week.
The following overtime pay rates apply for different circumstances:
| Overtime circumstances | Applicable Pay Rate |
| Work is performed between 6 am and 6 pm | Plus 25% of usual rate |
| Work is performed between 6 pm and 6 am | Plus 50% of usual rate |
| An overtime work shift is an extension of a night shift or of a mixed shift that starts between 6 pm and 6 am. | Plus 75% of usual rate |
| Overtime exceeding the maximum permitted limits | Plus 75% on applicable overtime rate |
The probationary period can only be stipulated when the worker requires certain aptitudes or special skills. The maximum allowed period is three months. For other workers, there is no legislated provision for a probationary period.
Only employees that have served an employer for a continuous period that is less than two years (and other categories) can be dismissed without providing just cause provided they are given:
An employee on an open-ended contract must give the employer 15 days’ notice. The notice period is calculated from the payment period following the notification (beginning of a month).
Employees that have been employed for more than two years are not entitled to a notice period but receive an additional indemnity equivalent to 6.54% of all wages received during employment. There is no notice period for fixed-term contracts.
The maximum daily hours of work is eight hours (maximum 48 hours per week). The maximum night shift is seven hours (maximum 42 hours per week). The maximum duration of a mixed shift (day and night work) is seven-and-a-half hours (maximum 45 hours per week).
Maximum overtime permitted in one day is three hours, up to a maximum of nine hours in one week.
The following overtime pay rates apply for different circumstances:
| Overtime circumstances | Applicable Pay Rate |
| Work is performed between 6 am and 6 pm | Plus 25% of usual rate |
| Work is performed between 6 pm and 6 am | Plus 50% of usual rate |
| An overtime work shift is an extension of a night shift or of a mixed shift that starts between 6 pm and 6 am. | Plus 75% of usual rate |
| Overtime exceeding the maximum permitted limits | Plus 75% on applicable overtime rate |
The probationary period can only be stipulated when the worker requires certain aptitudes or special skills. The maximum allowed period is three months. For other workers, there is no legislated provision for a probationary period.
Only employees that have served an employer for a continuous period that is less than two years (and other categories) can be dismissed without providing just cause provided they are given:
An employee on an open-ended contract must give the employer 15 days’ notice. The notice period is calculated from the payment period following the notification (beginning of a month).
Employees that have been employed for more than two years are not entitled to a notice period but receive an additional indemnity equivalent to 6.54% of all wages received during employment. There is no notice period for fixed-term contracts.
The benefits offered by the social security system include:
An overview of employer contributions towards social security is given in the table below:
| Insurance | Employer Contribution |
| Social Insurance | 12.25% |
| Education Tax | 1.5% |
| Unemployment | 2.25% of quarterly payroll |
| Accident Insurance | 0.33% to 6.25% depending on the type of industry |
