Employer of Record in Panama: 15 Providers Compared (2026)

Employing someone in Panama: key facts

Rules sit in the Código de Trabajo, social charges go through the CSS; figures are national and checked 2026-10-29.

Minimum wage

There is no single national minimum. Decreto Ejecutivo 13 of 2025-12-31 sets 59 hourly rates for 74 activities, in force from 2026-01-16 for 2026-2027. Region 1 is Panama, Colón, San Miguelito, David, Santiago, Chitré, La Chorrera and Arraiján; Region 2 is every other district.

Source: EY, checked 2026-10-29. The decree PDF did not open, so the information, professional and lawyer rates come from secondary tables. At 48 hours a week, 3.16 x 48 x 4.33 = USD 656.77 a month (our calculation).

Employer contributions

No contribution ceiling was found in the sources reviewed.

Sources: Morimor for the CSS schedule, Mercans for Seguro Educativo and the risk range, Softland for the 13th-month rates, Código de Trabajo for the fund, checked 2026-10-29.

• The headline without the risk premium and the fund is 14.75% of regular pay.
• The 13th-month split rests on a secondary table; another source puts the employee’s share at 9.75%.

Working hours and overtime

• Day shift: 8 hours a day and 48 a week over six days; night shift 7 and 42; mixed shift 7.5 and 45 (arts. 30-31).
• Overtime premium: +25% by day, +50% at night or extending a mixed shift, +75% extending a night shift (arts. 33, 36). Cap of 3 hours a day and 9 a week; beyond that an extra 75%.
• Work on the weekly rest day +50%; on a national holiday +150% (arts. 48-49).

Source: Código de Trabajo, checked 2026-10-29.

Annual leave and public holidays

• 30 calendar days of paid vacation for every 11 continuous months of work, paid as one month’s salary (art. 54).
• Art. 46 lists 1 Jan, 9 Jan, Carnival Tuesday, Good Friday, 1 May, 3 Nov, 10 Nov, 28 Nov, 8 Dec, 25 Dec and the presidential inauguration day, paid as an ordinary day (art. 45).
• Later laws may add days; we did not check them, so no total is stated.

Source: Código de Trabajo, checked 2026-10-29.

Probation

• Up to 3 months, only where the job requires a special skill and only if written into the contract; either side may end the relationship in that period without liability (art. 78).

Source: Código de Trabajo, checked 2026-10-29.

Notice and severance

• Under an indefinite contract the employer may end the relationship only for a justified cause (art. 211).
• Exceptions (art. 212), including workers with under 2 years of service: dismissal without cause with the art. 225 indemnity plus 30 days’ notice or pay in lieu. A general notice period was not found.
• Prima de antigüedad: one week of salary per year of service, owed on termination of any indefinite contract whatever the cause (art. 224).
• Indemnity for unjustified dismissal (art. 225, relationships begun after the 1995 reform): 3.4 weeks of salary per year for the first ten years, one week per year after that; a court may add up to 3 months of back pay.
• Employers fund both through the cesantía fund (arts. 229-A to 229-B).

Source: Código de Trabajo, checked 2026-10-29.

13th salary and bonuses

• Décimo tercer mes is mandatory: one month’s pay a year, in three instalments on 15 April, 15 August and 15 December (Decreto de Gabinete 221 of 1971).
• Employer CSS of 10.75% and employee CSS of 7.25% apply to it; Seguro Educativo is not charged (secondary source).

Source: Softland, checked 2026-10-29.

Mandatory benefits

• CSS cover for health, maternity and sickness, disability, old age and death, through the contributions above.
• Occupational-risk insurance is employer-paid.
• Cesantía fund deposits (prima de antigüedad plus the indemnity share) are a mandatory employer obligation under arts. 229-A to 229-F.

Source: Código de Trabajo, checked 2026-10-29. Maternity, paternity and sick-pay details were not researched for this page.

Work permits

• Foreign staff of a Panamanian employer need a MITRADEL work permit inside quotas: 10% of staff for ordinary roles, 15% for trusted staff and 15% for technicians or specialists, each also subject to salary and headcount limits. Permits under these quotas are valid two years.
• SEM visa holders (multinational headquarters) and foreign technicians working up to 90 days, extendable to 12 months, are outside the quotas.
• Whether an EOR can sponsor a permit for a client’s hire was not confirmed.

Source: Chambers Corporate Immigration 2026, a search excerpt rather than the full page; checked 2026-10-29.

Currency and payroll

• USD is the working currency; the balboa (PAB) is the legal-tender name, pegged 1:1, with only coins issued locally (Mercans, secondary source, checked 2026-10-29).
• Pay periods may not exceed a fortnight (arts. 142, 148); monthly-salaried staff are in practice paid twice a month.
• The CSS payroll (planilla) is filed monthly through SIPE.

Is Employer of Record legal in Panama?

Grey area. Panama has no statute or licence for an employer of record. A local entity that employs staff who work in a foreign client’s operation sits in a grey area that leans towards joint liability for the client. No MITRADEL ruling or court case on EOR was found, and the Code text we used is the Justia consolidation, not the Gaceta (Código de Trabajo, checked 2026-10-29). The rules that matter:

• Art. 63: simulated contracts, interposed persons as supposed employers and a simulated legal person as employer are disregarded.
• Arts. 62, 64, 66: an employment contract is any agreement to work under subordination, whatever its name; an employment relationship is presumed between whoever personally provides a service and whoever receives it.
• Art. 89: contractors with their own capital, equipment and direction are employers, but the direct beneficiary is jointly liable for outstanding obligations to workers when the work is inherent, related or connected to its business.
• Art. 90: where a company works exclusively or mainly for another, the other is deemed the employer, and both are jointly liable for all benefits and indemnities.
• Art. 67: a written contract in three copies, one sent to the labour directorate.

What this means for a client:

• Recharacterisation as direct employer under arts. 63 and 90, if the EOR entity works exclusively or mainly for you and you direct the work.
• Joint liability under arts. 89-90 for unpaid wages, 13th month, vacation, prima de antigüedad and indemnity, plus dismissal remedies.
• Misclassifying a worker as a contractor triggers retroactive CSS contributions, income tax, the 13th month and prima de antigüedad (BizLatinHub, a vendor statement and not a primary source, checked 2026-10-29).

Who actually employs your hire in Panama

The table shows what each provider’s own Panama page says. The Registro Público de Panamá search is paid or account-based and no open mirror turned up by vendor name (checked 2026-10-29), so no row is registry-confirmed.

Twelve of 15 providers do not say who employs your hire in Panama, and for the two that claim their own operation the evidence is the vendor’s own wording. That matters because the employer is the party registered with the CSS and answerable under arts. 63 and 90. Before signing, ask: which legal entity will employ my hire, is it registered with the CSS, and does it work for other clients or mainly for me?

How to choose an EOR in Panama

Do you need the entity question settled first? Only Remote, Rivermate and Papaya Global speak to it for Panama, and none names the entity. Start with them and ask for the name in writing; for everyone else treat it as open.

Will you direct the work like any employee? Borderless AI’s Panama page warns that continuing work under client direction through a provider needs Panama-specific legal analysis, citing Labor Code arts. 89-95. If the person will be integrated into your team, take that analysis before signing.

Is the hire a foreign national? No source we read confirms that an EOR can sponsor a MITRADEL permit in Panama. Get the provider’s position on sponsorship in writing before you promise a start date.

Price or completeness of data? Published prices span $199 to $599, but most are global list rates. Only Remote, Deel, Multiplier, Skuad and Borderless AI show a figure on a Panama-specific page.

What it costs to employ someone in Panama through an EOR

The statutory charges below apply to the hire’s pay however the EOR bills you. The two examples are an ordinary private-sector employee in IT or office work at a large-payroll EOR entity, paid 13 equal payments a year (12 regular salaries plus the mandatory 13th month). Panama uses the US dollar, with the balboa pegged 1:1, so no conversion applies (Mercans, checked 2026-10-29).

Source: Morimor, Mercans, Softland, checked 2026-10-29. The fund deposit is 2.25% of the 12 regular salaries (art. 229-B); that base is our assumption. Line sums differ from totals by USD 0.01 through rounding.

Not in the table:

• Occupational-risk premium. The rate for office or IT work was not confirmed. At the lowest vendor-quoted rate, 1.05%, it would add USD 484.62 and USD 969.23 respectively.
• Severance paid on exit beyond the fund deposits, and the EOR’s fee.

Employer CSS was 12.25% until Ley 462; since the April 2025 payroll it is 13.25%. On the same USD 50,000 the CSS and Seguro Educativo lines rose from USD 6,346.16 in 2021 to USD 6,807.69 in 2026, about 7% more.

The EOR’s own fee comes on top, quoted per month. Published prices run from $199 to $599 per employee per month: RemoFirst from $199 (global), Rivermate from $349 (global), Playroll from $399, Multiplier Core $459 and Growth $519 on annual billing, Skuad $499 on its Panama page, Remote People from $499, Borderless AI $579, Deel, Remote, G-P and Atlas from $599. Papaya Global, Justworks, Pebl and Safeguard Global publish nothing we could find. Most figures are global list prices, not Panama rates.

Hidden costs: none of the 15 providers publishes a setup fee, deposit, minimum term or termination fee for Panama. Where the field is blank, treat it as unpublished, not zero.

When you don’t need an EOR

• A genuinely independent contractor. Arts. 62, 64 and 66 presume an employment relationship with whoever receives personal services under direction, so a contractor who works for one client under instructions is a misclassification risk; see contractor misclassification. For the tax and payout side see how to hire contractors in Panama and paying contractors in Panama.
• Your own Panamanian employer. If you employ directly you are the employer, with no intermediary between you and the worker; you sign a written contract in three copies and send one to the labour directorate (art. 67). Our data holds no setup cost or timeline for this route.
• A PEO. G-P’s Panama page says the hire goes through “G-P’ Panama PEO” without saying whether that is its own entity; the term is used loosely. See EOR vs PEO, the PEO glossary entry and co-employment.

What changed in 2026

• 2026-01-16: Decreto Ejecutivo 13 of 2025-12-31 (Gaceta Oficial 30438, 2026-01-06) sets new minimum wages: 59 hourly rates for 74 activities for 2026-2027, repealing Decreto Ejecutivo 1 of 2024 (EY, checked 2026-10-29).
• 2027-03-01 (scheduled): employer CSS rises from 13.25% to 14.25% under Ley 462, and to 15.25% from 2029-03-01. The first step applied from the April 2025 payroll, so 2026 itself has no new step (Morimor, checked 2026-10-29).

Numbers vendors haven’t updated

• Employer CSS. Rivermate’s Panama tax guide still shows 12.25%, the rate before Ley 462; the current rate is 13.25% (Morimor, checked 2026-10-29).
• Employer cost. Deel’s calculator shows an “Estimated Employer Cost” of 38.60% and Playroll’s guide 18-22.7%. Our statutory figure is 16.52% before the risk premium; we could not reconcile the three.
• Public holidays. Remote’s page says 13, Skuad, Playroll and RemoFirst 11, and G-P 10. The Código de Trabajo art. 46 lists ten fixed dates plus inauguration day; later laws may add days and we did not check them.
• Working week. G-P’s page gives 42 hours a week. The Code sets 48 hours for the day shift; 42 is the night-shift limit (arts. 30-31).
• Minimum wage. G-P’s page shows PAB 198 a month, which matches no rate in the 2026 decree data we have (lowest monthly figure: USD 320, domestic work in Region 2).

How we built this page

Facts were collected and checked on 2026-10-29 against the Código de Trabajo (Justia consolidation), the 2026 minimum-wage decree as reported by EY and La Prensa and, for the CSS schedule, a law-firm summary and payroll guides, because the CSS tables did not open. Provider entity claims come from each provider’s own Panama-facing page; the Registro Público could not be searched by vendor name, so none is registry-verified, and some pages were read from archived copies. Providers that say they operate Panama themselves come first, then the partner claim, then the rest by published Panama price and completeness of data. Nobody pays for placement on this page.