Foreign nationals must obtain a work permit and residency visa before employment in Panama. Employers must sponsor the application and comply with labour quotas, which generally limit foreign employees to a percentage of the workforce.

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Common visa categories include:

• Short-term business visas
• Temporary residence permits
• Work permits tied to specific employment

• Employers must register with the Panamanian tax authority and Social Security Fund (Caja de Seguro Social).
• Payroll is typically processed monthly or bi-weekly. Employers must:
  
  • Withhold income tax
  • Deduct employee social security contributions
  • Pay employer contributions
  • Submit payroll filings
• Social Security Contributions (approximate):
  
  • Employer: ~12.25%
  • Employee: ~9.75%
• Additional contributions include education insurance and occupational risk insurance.

• Contracts may be fixed-term or indefinite. Written contracts are standard and required in many cases.
• Probation Period: Typically up to 3 months.
• Working Hours:
  
  • Standard workweek: 48 hours
  • Overtime paid at premium rates
• Minimum Wage: Varies by sector and region.
• Termination: Termination requires justified cause or payment of severance. Notice or payment in lieu is required.
• Severance: Employees are entitled to severance based on tenure, including seniority premiums and indemnity payments.

• Annual Leave: 30 days of paid leave per year (accrued at 1 day per 11 days worked).
• Sick Leave: Paid sick leave funded through social security after eligibility conditions are met.
• Maternity Leave: 14 weeks paid leave (partially funded by social security).
• Paternity Leave: Typically a few days of paid leave.
• Public Holidays: Approximately 10–12 national holidays.
• Employers must also provide social security and occupational risk coverage.

• Tax Residency: Individuals spending more than 183 days in Panama are generally considered tax residents.
• Residents are taxed on Panamanian-sourced income only (territorial tax system).
• Tax Year: January 1 – December 31.
• Panama applies a progressive personal income tax system with rates up to 25%.