Working in Panama

The Republic of Panama had a labour force of about 1.83 million in 2014. This Latin American nation has one of the lowest unemployment rates in the region at 4.50%, according to the CIA World Factbook. Nearly half of all male workers, who account for 82.5% of the labour force, received tertiary education.

Panama’s economy has been one of the fastest-growing in the continent since the pre-crisis period. According to the 2015 Latin Business Index, Panama is the second leading country in Latin America when it comes to infrastructure improvements, open foreign trade and expectation of high GDP growth rates. Currently, the Panamanian economy is the second-largest in Latin America, after Brazil. The strength of the Panamanian economy is primarily attributed to the country’s geographical location.

It is the southernmost country in Central America, connecting North and South America. It controls the Panama Canal, which is a key conduit for international maritime trade. The Canal connects the Atlantic Ocean and the Caribbean Sea to the Pacific Ocean. Aside from toll revenues, the Panama Canal provides massive employment to the country.

Major Industries

Jobs in Panama are heavily concentrated in a well-developed service sector. Construction, banking, commerce, tourism and trading companies continuously hire skilled workers as the economy expands. In 2006, Panamanians voted on the building of the third set of locks for the Panama Canal, boosting demand for construction workers, engineers, surveyors, and project managers. According to a recent report, the economy will also add 100,560 new jobs in logistics from 2014 to 2024. Construction companies in Panama are presently in need of project directors, quantity surveyors, monitoring technicians, maintenance and planning engineers, 3D designers, and collections analyst.

Tourism is a vital sector in Panama. The country recorded 1.5 million tourist arrivals at national borders in 2011, up from 702,000 in 2005. More than 2.2 million foreigners visited Panama in 2013, contributing more than $2.5 billion to the national economy. Some of the sought-after tourism jobs include those in housekeeping, catering, baking, and hotel and restaurant managing.

Average Salary

Though the average salary in Panama has reached an all time high of 1,238 PAB (Panamanian Balboa) in 2016, it is still considered low compared to the United States where the average monthly salary is USD 3,769. The wage in this county also varies depending on one’s academic and professional background but those who don’t have a college degree earn around USD 400 per month. Thirteenth month pays in Panama can be paid once to employees or on an instalment basis which is usually given in the months of April, August and December.

Working Hours

For most workers, the regular working week is Mondays to Fridays from 8 am until 5 pm or 6 pm. Employees are allowed to work for a maximum of eight hours a day (with breaks at noon for lunch) and a maximum of 48 hours a week. Generally speaking, an employer is prohibited by the local law to ask his employee/s to work overtime. However, if there is an agreement between the employer and the worker, the maximum time allowed for overtime work is three hours per day and nine hours per week. The Panamanian Labour Code also permits four types of work shifts which are stated below:

Morning shift of eight hours per day and 48 hours per week
Night shift of seven hours per day and 42 hours per week
Mixed shift (day and night) of 7.5 hours per day and 45 hours per week
Rotating shift if the company is in need of staff during different work cycles

Income Tax

Taxes in Panama are regulated by the Ministerio de Economía y Finanzas (Ministry of Economy and Finance) and individuals, such as foreign nationals that earn money in this country are required to pay their income tax returns. Most of the time, the tax amount is deducted from by the employer from the salary of the employees each month. Panama income tax is progressive and is levied from 15 to 25%.

Taxable Income (PAB)	Tax Rate %
Up to 11,000	0
11,001-50,000	15
50,000 and above	25

Business Culture

Titles are taken quite seriously in Panama. The locals usually address each other by their professional titles and it is customary to call out a person with their academic and/or professional level instead of Mister or Miss. Spanish is the official language in Panama and though many international companies have employees who speak English, expats who will conduct business with local Spanish companies should try their best to communicate using their mother tongue. Business cards are also being widely used in this country, and it is much better to have your details printed out in both English and Spanish.

The work environment in Panama is informal, and superiors, as well as employees, enjoy relaxed ambience where there is a strong emphasis on building friendships. Discrimination is also strictly not tolerated in Panama. The Ministry of Labour implements a penalty that ranges from USD 500 to USD 1,000 to an organisation, employer or company that has been found guilty of discriminating an employee.

Finding a Job

Foreigners planning on seeking employment in Panama are required to secure a visa and a work permit. There are several ways to find a job in this country but the easiest way is thru the internet. Some of the leading websites are:

Expats should also keep in mind that the basic knowledge of Spanish is usually required by most Panamanian employers. They can also target multinational companies that have a presence in Panama or Non-Government Organisations in their home country. Applicants can check the website of City of Knowledge where most NGOs and international organisations are concentrated.