Panama
Make employment in Panama easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Panama, all in one easy-to-use platform.
- Capital City
Panama City
- Currency
Panamanian balboa (B/., PAB)
- Languages
Spanish
- Population size
4,176,869
Employment termination in Panama
Termination process
Panamanian labor law stipulates that long-term employment contracts can only be terminated with a written notice specifying a just cause, such as dishonesty, negligence, fraud, or any other work-related offenses. Employees can seek redress via a labor court if they deem that a termination has been made on an unjustified basis.
Notice period
Employers are only required to provide 30 days’ notice to employees dismissed without just cause.
Severance pay
Employees are only entitled to severance payments when a termination decision is due to redundancy.
Up to 6 months of employment: two weeks’ pay
Up to 9 months of employment: three weeks’ pay
Up to 1 year of employment: 1 months’ pay
Up to 2 years of employment: 3 months’ pay
Up to 4 years of employment: 4 months and two weeks’ pay
Up to 5 years of employment: 5 months and a week’s pay
Up to 10 years of employment: 9 months and three week’s pay
Up to 20 years of employment: 14.8 months’ pay
Probation periods
The maximum length of probation is 3 months.