Business
Panama — Business: Payroll
Payroll contributions for employers in Panama, per PwC Worldwide Tax Summaries. Thirteenth-month pay and severance are not covered by this source.
VerifiedProfessional tax guide — not a government sourcePwC Worldwide Tax Summaries - Panama, Individual: Other taxes (CSS and educational insurance)Last reviewed: 2026-10-27
Key facts
- Social security (CSS): employees pay 9.75% from 1 April 2025.
- Employers pay a progressive CSS rate: 13.25% from 1 April 2025, 14.25% from 1 March 2027 and 15.25% from 1 March 2029.
- CSS applies to wages and other compensation, including compensation in kind, with no maximum taxable amount.
- Educational insurance tax is 1.25% for employees and 1.50% for employers, on salaries and wages with no maximum.
Steps
- Registering for Payroll Taxes — To register for payroll taxes in Panama, businesses must contact the Panamanian Ministry of Economy and Finance and provide required documentation, including a business license and tax identification number.
- Setting Up Payroll Systems — Employers must establish a system for tracking and reporting employee salaries and benefits, as well as for calculating and paying payroll taxes.