Remote’s guide to employing in

Panama
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Services available in this country:
Employer of Record ProductContractor Management
  • Capital City

    Panama City

  • Currency

    United States Dollar ($, USD)

  • Languages

    Spanish

  • Population size

    4,176,869

Services available in this country:
Employer of Record ProductContractor Management
The skyline of panama city at dusk.
Grow your teamTaxesTypes of leaveEmployment Termination

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.