Expatries Network
Country profile

Local payroll and social security compliance in Panama

The network covers Panama within the Central America and the Caribbean region. Payslips there are drawn up in PAB, and dealings with a local firm are conducted in Spanish.

The business centres where the network is looking for a correspondent as a priority are Panama, Colón, David, Santiago.

The country lies outside the European Union and outside the European Economic Area: the A1 certificate has no standing there. Whether the employee remains in the scheme of origin then depends on the bilateral social security agreement, if any, concluded with the sending country; where no such agreement exists, dual affiliation must be expected and budgeted into the assignment.

Region
Central America and the Caribbean
Payroll currency
PAB
Working languages
Spanish
European status
Outside the European Union and the European Economic Area
Capital
Panama
Dialling code
+507
Country code
PA / PAN

Who may run payroll in Panama

The answer to this question changes everything: it determines to whom you may entrust your payslips locally, and what you must ask for before signing. It has been verified country by country with the local authorities.

In Panama, running payroll on behalf of third parties is reserved by law to no registered profession: any company may take it on. The absence of a legal barrier shifts the checking onto you, and that is why the network itself verifies the registration, the tax and social security standing and the insurance cover of every firm before listing it.

Consult the official register

What to check on the ground

Au Panama, la comptabilité publique est réglementée par la loi 57 de 1978 : établir et certifier des états financiers exige une idoneidad de CPA délivrée par la Junta Técnica de Contabilidad. Le simple traitement de la paie n'est pas en soi une activité réservée, mais un partenaire sérieux doit disposer d'un CPA idóneo, seul habilité à signer les déclarations comptables et à représenter le client.

Payroll in Panama in practice

Panama holds a distinctive position: an outward-facing services and logistics hub, it has built targeted incentive regimes, notably for multinational headquarters, alongside a general labour law that remains fairly protective of employees. A foreign company should therefore begin by identifying which regime it is employing under, because the obligations differ appreciably.

Mandatory cover sits with the Caja de Seguro Social (CSS), which administers sickness, maternity, disability, old age and occupational risks, and with which the employer registers before any hire. It covers foreign employees engaged locally.

The legal currency is the balboa, whose peculiarity is that it circulates in the form of United States dollar notes at a fixed parity: payroll is handled in dollars in practice without that amounting to payment in a foreign currency. Spanish is the language of contracts, payslips and administrative filings.

Payroll is not a reserved activity, but public accountancy is: the idoneidad of Contador Público Autorizado, issued by the Junta Técnica de Contabilidad, governs the signing of statements and representation of the client.

Employing staff in Panama

Registration of the employer with the Caja de Seguro Social governs employee affiliation and opens the monthly reporting cycle; it comes after tax registration and the issue of the RUC, but before any hire is made.

Existing at the Registro Público is not enough in itself. A company is lawfully constituted there yet cannot carry on a business activity in the country until it holds an Aviso de Operación. Many Panamanian structures are entirely in order at the registry yet hold no such notice: it is that notice, not the registry certificate, which evidences genuine activity.

The work permit issued by the Ministerio de Trabajo y Desarrollo Laboral is examined together with the proportion of national staff the company must maintain, which caps how many foreign nationals may be employed and admits exceptions under certain special regimes. The two questions belong together.

Filed with the labour ministry, the written employment contract is the rule. Grading, duration, the probationary period and the termination rules repay close review, Panamanian law distinguishing justified from unjustified dismissal with clear consequences in compensation.

Day-to-day operations combine three flows: wage tax withheld and remitted to the Dirección General de Ingresos, monthly CSS returns, and the décimo tercer mes, the statutory thirteenth month, which is settled in several instalments spread across the year.

Panama

The documents required of a partner in Panama

The network asks 9 documents of any firm wishing to represent it in Panama. The table gives, for each of them, the exact wording in use locally, the body that issues it and the period during which it remains admissible. These are the terms to use in an application to the local administration.

Of these 9 documents, 7 are required of every applicant and 4 have a limited period of validity, the shortest being 3 months. 1 of these documents exist only in Panama and have no equivalent in the common core of the network.

Local wordingIssuing bodyValiditySource
Certificado de Registro Público (Persona Jurídica)Public Registry certificate of good standing

Le certificat indique l'existence, les dirigeants (dignatarios), les administrateurs et le représentant légal, ainsi que le statut « vigente » ou non. C'est la pièce d'identité de la société panaméenne.

Registro Público de Panamá3 months
Required
Official website
Aviso de OperaciónNotice of Operation (business licence)

Remplace l'ancienne licence commerciale : sans Aviso de Operación, une société ne peut pas exercer d'activité lucrative au Panama. Vérifier que l'activité déclarée couvre les services comptables et administratifs.

Ministerio de Comercio e Industrias (MICI) — plateforme Panamá EmprendeNo expiry
Required
Official website
Registro Único de Contribuyentes (RUC) y NITSingle Taxpayer Registry number (RUC) and NIT

Le RUC identifie le contribuable, le NIT est le code d'accès aux services en ligne de la DGI. Le RUC des sociétés reprend le numéro de folio du Registro Público.

Dirección General de Ingresos (DGI) — Ministerio de Economía y FinanzasNo expiry
Required
Official website
Paz y Salvo de la Dirección General de Ingresos (refrendado)Tax clearance certificate (paz y salvo)

Attention à la distinction entre le paz y salvo simple, imprimable en ligne, et le paz y salvo refrendado (visé) exigé pour les démarches formelles. Le document porte sa propre date de validité — la contrôler.

Dirección General de Ingresos (DGI) — Ministerio de Economía y Finanzas3 months
Required
Official website
Paz y Salvo de la Caja de Seguro Social (CSS)Social security (CSS) clearance certificate

Si le cabinet n'a pas de salarié, la CSS délivre à la place un « Certificado de No Obligado a Inscribirse al Régimen de la CSS » — accepter ce document équivalent.

Caja de Seguro Social (CSS)3 months
Required
Official website
Póliza de responsabilidad civil profesionalProfessional liability insurance policy

Aucune obligation légale panaméenne identifiée pour les cabinets comptables ou les prestataires de paie ; pièce d'usage à exiger contractuellement.

Assureur agréé, sous supervision de la Superintendencia de Seguros y Reaseguros12 months
Where applicable
Official website
Idoneidad de Contador Público Autorizado (CPA) — carné de idoneidadCertified Public Accountant (CPA) licence

La JTC délivre l'idoneidad et un carné d'identification distinct. Un cabinet qui signe des états financiers ou intervient devant la DGI doit compter au moins un CPA idóneo ; la paie seule n'est pas expressément réservée.

Junta Técnica de Contabilidad (JTC) — Ministerio de Comercio e IndustriasNo expiry
Required
Official website
Cédula de identidad personal o pasaporte del representante legal, y certificación de dignatariosID or passport of the legal representative plus officers certification

Le pouvoir de représentation se lit sur le certificat du Registro Público ; la cédula ne sert qu'à identifier le signataire.

Tribunal Electoral (cédula) et Registro Público (dignatarios)No expiry
Required
Official website
Cumplimiento de la Ley 81 de 2019 sobre protección de datos personales — no existe registro obligatorioCompliance with Law 81 of 2019; no mandatory registry

La loi 81 de 2019, en vigueur depuis mars 2021, n'organise pas de registre des responsables de traitement : demander la politique de confidentialité et l'engagement contractuel de confidentialité plutôt qu'un certificat.

Autoridad Nacional de Transparencia y Acceso a la Información (ANTAI)No expiry
Where applicable
Official website

What sets Panama apart

Paz y salvo is the generic name for Panamanian clearance, issued separately by each administration: the Dirección General de Ingresos for tax, the Caja de Seguro Social for social security, the municipality for local levies. Each issues its own and none stands in for another. Two versions circulate as well, one printed from the portal and one refrendada, endorsed by the administration; only the latter carries full evidential weight.

The thirteenth month is not paid in a single sum but in instalments spread over the year, which calls for regular provisioning rather than a year-end charge.

Fixed parity between balboa and dollar removes currency risk, not local regulation. Salary payments, withholdings and supporting records remain governed by Panamanian law, whatever the banknote used, and a payroll run from abroad in dollars is still a Panamanian payroll in every respect that matters.

Points to watch in Panama

Le mot-clé panaméen à retenir est « paz y salvo » : c'est le nom générique du quitus, décliné par administration (DGI, CSS, municipalité). Deux pièges. D'abord, le paz y salvo imprimé en ligne n'a pas la même force que le paz y salvo refrendado — exiger la version visée. Ensuite, beaucoup de sociétés panaméennes sont des coquilles offshore parfaitement en règle au Registro Público mais dépourvues d'Aviso de Operación : c'est cet Aviso, et non le certificat du registre, qui prouve une activité réelle sur le territoire.

The network in Panama

The network opens 3 partner slots in Panama, not one more. No firm is listed there yet: all 3 slots therefore remain open to applications.

Listed firms in Panama

No listed partner in Panama has asked to appear in the public directory. The contact details of a firm are passed on to the client only when an assignment is awarded.

Filing an application does not amount to admission: every request is reviewed one by one. There is no minimum turnover requirement, and the partner selected invoices its fees directly.

You run payroll in Panama

Submit an application: we review your file, we check the documents required on the ground and we give you an answer, whether it is positive or not.

We expect a Panamanian firm to include a Contador Público Autorizado holding an idoneidad issued by the Junta Técnica de Contabilidad, the only person entitled to sign and to represent the client. The file brings together the Registro Público certificate, the Aviso de Operación evidencing genuine activity, the RUC, and endorsed paz y salvo certificates from the DGI and the Caja de Seguro Social. To that we add professional indemnity cover and the undertakings given under Law 81 of 2019 on personal data protection.

Submit an application

You employ staff in Panama

Describe your requirement. No firm is listed in Panama yet: we review the request, then entrust it to a local firm that the network identifies and vets, or to the partner of a neighbouring country covering this territory. Your contact details are passed on to the selected firm alone.

Request a provider in Panama

The other countries in the Central America and the Caribbean region

Mobility is rarely arranged one country at a time. The neighbouring profiles follow the same outline.

The twenty leading countries of the network

These countries account for most of the requests received: each one has, in addition to its profile, six pages devoted to a single aspect of local payroll.

See the 120 countries of the network

Sources of this profile

The information gathered on this page comes from the registers, administrations and bodies listed below, consulted when the reference base was compiled. It is given for guidance and does not replace the advice of a professional established in Panama.