Before setting up a business, it is important to know the laws and regulations of that country in terms of employment so that the employer and employee can work harmoniously and easily.  In Panama, there are some conditions related to an employee’s work that are dependent on factors such as tenure, health conditions, etc.

Compensation

Office workers have varying salary levels.  Executive assistants who speak English are paid from around $350 to $600 depending on their job description and responsibilities.  Banking personnel who speak English draw a monthly salary of around $600 to $700 while website designers and webmasters get mostly $600 or more.  Executives in Panama begin at a salary rate of $1000 but telemarketers can get as much as $1,500 if they know the market well and if they can rack up sales for the company.  Department heads may get $2,000 and heads of government agencies are paid around $3000 a month.

Should you need to hire a maid and driver, especially if you have elder relatives who need to be taken care of, you could do so for approximately $600 or higher.  This sure beats a nursing home where you could be billed $7,000 - $8,000 a month.  Doctors in Panama can make house calls for $25 - $45 per visit but one could also hire a doctor who just got out of medical school for only $1000 monthly.  The living conditions for elders in Panama are a lot better than in any nursing home in North America and what’s more, caring for the elderly in Panama is definitely cost effective.

Employee Benefits

Thirteenth month pay should be given in installments of one week’s pay every third month depending on the number of months worked for that period.  Paid vacation equivalent to a month is provided to an employee after he or she has been in the company for 11 months.  If an employee works on this vacation month, he or she will be paid twice his regular salary.  Simply put, an employee gets 14 months’ worth of salary in a year’s time.  Panama has about 12 regular holidays and if the employee works during these official holidays, the employee gets double pay.

Pregnant employees are entitled to maternity leave.  Should the doctor advise that the employee needs to get full house rest, the employer may have to give her pay for those prescribed days of rest.  However, if the employer insists that the employee continue to report for work, he may end up paying for the medical expenses that the employee will incur.

Taxation

Taxes are considerably low in Panama.  Employer contribution is equivalent to only 11% while only 7% is required of the employer for the employee’s retirement and government medical plan.  An employer will not have to worry about additional contributions for compensation insurance, disability insurance, unemployment insurance and others.

Employing Household Helpers

A live in household help will cost about $140 - $225 every month.  In general foreign employers will usually have to pay within the $200 range while Panamanian employers usually pay a lower salary.  Drivers mostly stay out but can work on a 5-1/2 day schedule for $300 - $350 a month.  Depending on the size of one’s home and family, one may need two or more helpers and even a nanny.  This is good practice so one could schedule their vacations without putting undue stress on the family.