Summary
The social security system in Panama encompasses insurance programmes for pensions, health and industrial accident. It is not a comprehensive social security system, however, and benefit provision is limited.
Details
Contributions
The contribution rate in Panama is 12.25% for employers and 9.75% for employees, with no cap. In addition, employers are required to pay workers’ compensation insurance, which covers work-related personal injuries and death, at up to 6% of earnings, depending on the industry.
Treaties
Panama has no international social security agreements. Inbound expatriates will therefore usually be liable to Panamanian contributions, as well as (potentially) continued home country contributions.
Exemptions
The base for social security payments is all cash and non-cash (in kind) remuneration. There are few exemptions from social security in Panama.
Administration
Although withheld monthly, social security contributions are paid over to the authorities quarterly, and social security filings with the government are made via an online reporting platform.
Administratively, organizing foreigners’ participation in Panamanian social security is not overly burdensome.
Benefits
Participation in the social security system in Panama provides only limited benefit entitlements – there are no unemployment benefits, and Healthcare cover is limited to permanent residents and citizens of Panama. Retirement benefits are low and few, if any, foreign nationals claim them.
Social security insights are intended to provide quick and straightforward insights into social security regimes. Always seek professional advice based on actual circumstances before acting.
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