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Panama Payroll Services & Solutions

Simplify your expansion into Panama, with Horizons

Establishing and running payroll in Panama

If your organization is interested in expanding into Panama, one of your initial steps will probably be to hire employees locally and establish payroll in Panama. This can be a lengthy and difficult process for many businesses, often taking several months to complete and resulting in unexpected delays. 

At Horizons, we specialize in providing Panama payroll outsourcing to foreign businesses aiming to build a presence in the region. We will handle the setup, running, and any associated administration for your Panama payroll, simplifying the whole process and empowering you to focus on the important job of a successful expansion, even if you don’t have an established entity in Panama.

Why choose the Horizons payroll solution?

If you have an entity

If your organization has already established an official entity in Panama, then you can outsource your payroll setup and management to Horizons to simplify your expansion. 

This level of outsourcing is well-suited to larger organizations that are interested in expanding into Panama on a long-term basis.

If you don’t have an entity

For organizations that have not already registered an entity in Panama, we offer our standard payroll outsourcing service with the additional use of our Panama subsidiary. We will act as employer of record for your new employees, so you won’t have to go through the long process of registering an entity in Panama yourself.

This service is a low-risk, flexible, and scalable option for businesses looking to expanding into Panama.

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Panama payroll guide

Taxation and withholdings requirements in Panama

Employers and most employees in Panama must both contribute to social insurance for the employees. Contributions equal 6.75% of salary for employees and 2.75% for employers. The government also contributes 1.04%.

Panama’s territorial income tax laws are very favorable for many, particularly foreign workers. Panamanian sourced income is taxed progressively at rates of between 0% and 25%.


Entitlements and terminations in Panama

Employees in Panama are generally entitled to 30 days of notice prior to termination of their employment contract. Severance payments, if applicable, usually equal around three to four weeks of pay for every year of service with an employer. Probation periods are limited to three months.

How to establish a Panama payroll

In most cases, any organization aiming to start a payroll in Panama needs to establish an official entity in the country. This can take longer than expected, as you will need to closely follow Panama’s unique and often complicated business laws.

Alternatively, you can choose to outsource your Panama payroll to Horizons. We provide the use of our Panama subsidiary to act as employer of record for your Panama workforce, so you won’t have to go through the complex process yourself and can benefit from our outsourcing services even without a registered entity in Panama. Additionally, we can build your payroll and manage your HR, compliance, and any other associated administration, enabling you to work on successfully expanding your businesses in Panama.

Manage payroll in Panama

Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.