[Updated 4/3/24] When asked to rank the three most important employee benefits in Panama, the average employee will say medical insurance, life insurance, and accident insurance.

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Andrea Kam

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Employee Benefits In Panama

Health insurance (including both individual and corporate insurance) represents an estimated 25% of the entire insurance industry, and corporate voluntary (personal) medical insurance is the most desirable benefit. This is mainly because state-provided medical care is not deemed sufficient and corporate insurance usually provides more accessible rates than individual health insurance products.


Mandatory employee benefits in Panama

There are five key employee benefits required in Panama:

  • Medical coverage for employees is mandatory; the service is provided by the Social Security Entity (CSS). Independent contractors may also acquire these coverages voluntarily by contributing to the CSS.
  • CSS also includes other coverages such as worker’s compensation, short and long-term disability, and maternity leave.
  • CSS also administrates the Statutory Pension Fund, which is funded through employers’ and employees’ contributions.
  • Statutory leaves and allowances (vacations, sick leave, parental allowances, etc.) are covered by the employer up to a certain limit per year. If the employee exceeds the legal limit for sick leave, the excess may be covered by CSS in certain circumstances.
  • Additional days off are mandatory, and according to labor law, employees are granted additional days off due to work on weekends or public holidays, or this work must be at a higher rate. This is regulated by local Labor Laws.


Supplemental employee benefits in Panama

  • Group Life– Many employers provide this benefit as it tends to be one of the most cost-effective. The insured sum will either be a fixed sum or a multiple of the base salary—2x the annual salary would be deemed a good level of benefit. The average market benchmark for this type of benefit would include additional benefits such as double indemnity due to accidental death; dismemberment; total and permanent disability; and an advance when there is a terminal illness diagnosis.
  • Group Medical & Dental – Private medical insurance remains one of the most popular benefits due to its lower cost and great flexibility. Corporate medical plans can be tailored to suit each particular client, which also allows for flexibility regarding coverage and pricing. Private medical insurance can be divided into two sub-groups: hospitalization and complete policies. Hospitalization policies are mainly used for major medical emergencies and for elective surgeries. Complete medical insurance policies cover all other services, including outpatient, medication, maternity, and other wellness-related benefits. Dental insurance and dental plans are available in Panama but are far less common and generally a paid benefit offered to employees working in multinational companies.


Perks in Panama

The most diverse employee benefits in Panama are typical in multinational corporations, as well as utilities and financial services companies where you should be able to offer a little bit more than others in your field to be an attractive employer.

Panama is still a developing market regarding employee benefits and perks. Most additional benefits/perks provided by employers focus on alleviating expenses related to employees’ jobs, and the most important benefits after monetary compensation are related to health and wellness. They include:

  • Mobile phones – A majority of companies provide mobile phones for their employees for business use or provide a monthly stipend to cover these expenses.
  • Short-term disability – Multinational companies are interested in providing short-term disability coverage for their employees to supplement their life and health insurance. In accordance with current labor law, days 1-18 of sick leave are paid by the employer based on the average declared salary. While the CSS does cover additional sick leave, the process is long and bureaucratic, making this particular benefit highly appealing, albeit expensive.
  • Transportation stipends – Companies provide monthly stipends or complete reimbursements of transportation costs associated with an employee’s functions, which may include gas, maintenance, and depreciation.


Kampasa provided this information about employee benefits in Panama. If you need EB support in the country, please contact Asinta, and we will put you in touch with Kampasa.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

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