What are payroll taxes in Panama?

The minimum taxable base is US$11,000 (tax exempt) per year:

• Employees that earn between US$11,000 and US$50,000 per year are taxed at a rate of 15% on the amount over US$11,000.
• Employees who earn more than US$50,000 pay US$5,850 on earnings up to US$50,000, plus a tax rate of 25% on the amount earned over US$50,000.

Social security contributions

9.75% on wages and other compensation paid, including compensation in kind, for employees. There is no maximum limit on the taxable amount.

Educational insurace tax

The employee contributes 1.25% of their salary, to the Social Security Fund.

Employer Burden

Social security contributions

13.5% on wages and other compensation paid, including compensation in kind. There is no maximum limit on the taxable amount.

Educational insurance tax

The employer contributes 1.5% of the employee’s salary to the Social Security Fund.