Countries › Panama › Guide › 7. Labor and employment › Social security contributions in Panama: Caja de Seguro Social rates of 13.25 percent for employers rising to 15.25 percent, 9.75 percent for employees, and what is not salary

Social security contributions in Panama: Caja de Seguro Social rates of 13.25 percent for employers rising to 15.25 percent, 9.75 percent for employees, and what is not salary

Last verified: 2026-10-29 · Status: Changing

Employers register with the Caja de Seguro Social and pay 13.25 percent of salaries until 28 February 2027, 14.25 percent until 28 February 2029 and 15.25 percent after that, while withholding 9.75 percent from employees. Thirteenth month installments carry their own special rates of 10.75 and 7.25 percent, and payments such as notice pay, indemnities, the seniority premium and per diems are not contribution salary. Ley 462 de 2025 kept the reference retirement ages at 57 for women and 62 for men.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates as legal tender; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Employer social security contribution (until 28 February 2027)	13.25 %Ley 51 de 2005 texto único art. 96 (Ley 462 de 2025), as of 2026-10-29 · in force
Employer social security contribution from 1 March 2027	14.25 %Ley 51 de 2005 texto único art. 96, as of 2026-10-29 · pending
Employer social security contribution from 1 March 2029	15.25 %Ley 51 de 2005 texto único art. 96, as of 2026-10-29 · pending
Employee social security contribution	9.75 %Ley 51 de 2005 texto único art. 96, as of 2026-10-29 · in force
Self employed contribution for disability, old age and death	9.36 %Ley 51 de 2005 texto único art. 96, as of 2026-10-29 · in force
Reference retirement age, women	57 yearsLey 51 de 2005 texto único art. 179, as of 2026-10-29 · in force
Reference retirement age, men	62 yearsLey 51 de 2005 texto único art. 179, as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos), as of 2026-10-29 · in force

The rule

1. The Caja de Seguro Social's resources for administration, sickness and maternity, and disability, old age and death include: the employee contribution of 9.75 percent of salary; the employer contribution of 13.25 percent from the reform's entry into force until 28 February 2027, 14.25 percent from 1 March 2027 to 28 February 2029 and 15.25 percent from 1 March 2029; and, for self employed workers, 9.36 percent of insurable income for disability, old age and death plus 8.5 percent for voluntary sickness and maternity coverage.
Cost to do it: Employer cost per B/.1,000 (US$1,000) of monthly salary: B/.132.50 now, B/.142.50 from March 2027, B/.152.50 from March 2029.
Example: Salary B/.1,000: employee B/.97.50 withheld; employer B/.132.50. / US$1,000 salary: US$97.50 employee, US$132.50 employer.Texto único de la Ley 51 de 2005 with the reforms of Ley 462 de 2025, art. 96 numerals 1 to 3, 2025-05-22 official text · verified 2026-10-29 · changed: Ley 462 of 18 March 2025 raised the employer rate in steps from 13.25 percent to 15.25 percent by March 2029; the texto único was published on 22 May 2025.

2. Each of the three thirteenth month installments carries a special employer contribution of 10.75 percent and a special employee contribution of 7.25 percent.Texto único de la Ley 51 de 2005, art. 96 numerals 4 and 5, 2025-05-22 official text · verified 2026-10-29

3. For social security purposes the following are not salary: the three thirteenth month installments (which carry their own special rates), notice pay, termination indemnities, profit sharing that reaches at least 70 percent of staff and does not exceed or replace annual salary, dividends that do not replace salary, bonuses up to one month's salary (the excess is salary), the seniority premium, per diems, and production premiums up to 50 percent of a month's salary.Texto único de la Ley 51 de 2005, art. 86, 2025-05-22 official text · verified 2026-10-29

4. The Caja de Seguro Social decides whether employers report through payroll lists (planillas) or another system; a list with errors that prevent identifying workers is returned for correction within seven working days.Texto único de la Ley 51 de 2005, art. 87, 2025-05-22 official text · verified 2026-10-29

5. The reference age for the old age pension remains 57 for women and 62 for men.Texto único de la Ley 51 de 2005, art. 179, 2025-05-22 official text · verified 2026-10-29

6. If the worker is denied social security benefits because of the employer's arrears or fault, the employer must pay the corresponding subsidy. The employer also tops up the maternity subsidy to full pay.Código de Trabajo art. 200 and art. 107 as worded by Ley 44 de 1995, arts. 107 and 200, 1995-08-12 official text · verified 2026-10-29

Period	Employer	Employee	Total
Until 28 Feb 2027	B/.132.50 (13.25 percent)	B/.97.50 (9.75 percent)	B/.230.00
1 Mar 2027 to 28 Feb 2029	B/.142.50 (14.25 percent)	B/.97.50	B/.240.00
From 1 Mar 2029	B/.152.50 (15.25 percent)	B/.97.50	B/.250.00

Monthly contributions on a B/.1,000 (US$1,000) salary, Ley 51 de 2005 texto único art. 96.

Worked example

A company with 20 employees and a monthly payroll of B/.40,000 (US$40,000) pays B/.5,300 a month in employer contributions now, B/.5,700 from March 2027 and B/.6,100 from March 2029, an increase of B/.9,600 a year by 2029.
A one off bonus of one and a half months' salary paid to an employee earning B/.2,000 is contribution salary only for the B/.1,000 above one month's pay (art. 86 numeral 6).

Step by step

Register the company as an employer with the Caja de Seguro Social before the first hire.
File the monthly payroll list and pay employer and employee contributions together.
Apply the special rates to each thirteenth month installment.
Classify bonuses, profit sharing and per diems using art. 86 so that excluded items are not over reported and excess bonuses are not under reported.
Update payroll systems for 1 March 2027 and 1 March 2029.

Common traps

The employer rate rises twice; multiyear budgets built on 13.25 percent understate cost.
Bonuses above one month's salary and production premiums above half a month's salary become contribution salary for the excess.
If benefits are refused because the employer was in arrears, the employer pays the subsidy itself.
Occupational risk premiums are set separately by activity and are not included in the rates above.

Sources

← Termination and severance in Panama: just cause, stability after two years, the seniority premium, 3.4 weeks per year indemnity and the cesantía fundUnions, collective bargaining and strikes in Panama: one company union, a duty to bargain on request, agency fees and strikes that close the workplace →

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