Glosario
Panama payroll glossary
The terms of Panama payroll — CSS, SIPE, ISR, décimo, liquidation and more — explained clearly, with current rates.
- Planilla
- A company's payroll: the record of salaries, statutory deductions and employer contributions for each employee in a period.
- CSS — Caja de Seguro Social
- Panama's social security institution that collects employer/employee contributions and runs pensions and health.
- SIPE
- The CSS system to declare and pay the monthly payroll. nominaHQ generates the SIPE file ready to upload.
- Cuota obrero-patronal
- CSS contributions: 9.75% employee · 13.25% employer (Ley 462 raises the employer rate to 14.25% in 2027 and 15.25% in 2029).
- Seguro Educativo
- Education tax: 1.25% employee · 1.50% employer on salary.
- Riesgos Profesionales
- Employer premium to the CSS for work accidents, based on the company's CIIU activity code.
- ISR — Impuesto Sobre la Renta
- Personal income tax. In payroll it is withheld by annualizing taxable income (exempt ≤11,000 · 15% · 25%).
- DGI
- The Dirección General de Ingresos: Panama's tax authority.
- Décimo tercer mes
- A statutory one-month bonus, in three installments: 15 Apr · 15 Aug · 15 Dec. Its CSS is reduced (7.25%).
- Vacaciones
- Paid leave: 30 days (one month's salary) for every 11 months worked.
- Liquidación
- The settlement at the end of employment: seniority premium, indemnity (if applicable) and pro-rated benefits.
- Prima de antigüedad
- One week of salary per year worked, paid at the end of the contract.
- Indemnización
- Unfair-dismissal pay: 3.4 weeks per year up to 10 years, plus one week per additional year.
- Salario neto
- What the employee receives after subtracting statutory deductions (CSS, education tax, ISR) and others from base salary.
- ACH
- Bank-to-bank electronic transfer (Automated Clearing House) used to pay payroll.
- MITRADEL
- The Ministry of Labor; registers contracts and regulates employment.
- Código de Trabajo
- Panama's Labor Code, governing contracts, hours, wages, benefits and termination.
- Ley 462
- 2025 CSS reform raising the employer rate: 14.25% in 2027 and 15.25% in 2029. See guide.
- RUC
- The taxpayer registration number identifying a company to the DGI.
From theory to paid payroll.
nominaHQ computes each of these for you, with current law.