Payroll Module - Panama

Payroll Software for Companies in Panama

cifraHQ automatically calculates CSS, Educational Insurance and income tax every pay period - no manual tables, no bracket errors. Made in Panama, for Panamanian companies.

The payroll system integrates directly with accounting: every close generates the journal entry and updates the General Ledger with no manual steps.

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9.75%
CSS Employee
7.25%
CSS 13th-month
SIPE
CSS Export
F-03
DGI Filing
cifraHQ Payroll Software Panama
Made in Panama, for Panama
PanamaPack 2026 - statutory rates kept current

Complete Payroll for Panama

The entire Panamanian payroll cycle on one system, integrated with your company's accounting.

The cifraHQ electronic payroll automatically produces the SIPE file for CSS and Form 03 for the DGI, eliminating double data entry.

Automatic CSS and Income Tax

The PanamaPack 2026 engine applies the current rates each period: CSS employee 9.75%, CSS employer 12.25%, Educational Insurance 1.25%/1.50%, and annualized income tax with current brackets. Zero manual intervention.

Integrated 13th-Month Bonus

Manage the three annual bonus installments. cifraHQ calculates quarter income ÷ 12 per employee, applies the special 7.25% CSS rate, and tracks deadlines: April 15, August 15 and December 15.

Panama Statutory Settlements

Panama settlements cover 7 components: seniority premium (1 week/year), prorated vacations, prorated 13th-month, notice by tenure bracket, indemnity, severance and other lines. The 4-step wizard calculates each one according to the cause of termination, with CSS and income tax applied automatically.

CSS and DGI Exports

Download SIPE payroll for filing with the Social Security Fund (including SIPEAGRO for agricultural employers), Form 03 (Annual Income Tax Return) for the DGI, and the ACH file for bank payment. All generated from one module.

Vacation Tracking and Pro Rata

Automatic tracking of vacation accrual: 1 day per 11 working days, per Arts. 53–76 of the Labor Code. Calculates prorated vacations at settlement time. Integrated approval workflow for requests.

Compliance Calendar

Real-time alerts on upcoming statutory deadlines: CSS payroll payment dates, Form 03 deadline (May 31), 13th-month installments and Ministry of Labor requirements.

Current 2026 Rates - Applied Automatically

cifraHQ applies all of these rates without you having to update them manually.

CSS and Educational Insurance

Item Employee Employer
CSS (regular payroll) 9.75% 12.25%
Educational Insurance 1.25% 1.50%
CSS (13th-month bonus) 7.25% 7.25%
Professional Risk (Employer)
Class I - Office/Admin 0.294%
Class II - Commerce 0.672%
Class III - Light industry 1.680%
Class IV - Medium industry 2.520%
Class V - Heavy industry 3.920%

Income Tax (2026 Brackets)

Calculated with the annualization method (Art. 699 of the Tax Code). Personal exemption: B/.800 annually.

Annual Taxable Income Income Tax Rate
B/.0 - B/.11,000 0%
B/.11,001 - B/.50,000 15%
Above B/.50,000 25%

13th-Month Bonus - Exempt from Income Tax

Payments of the three bonus installments are not subject to income tax, regardless of the employee's income level.

How the Payroll Cycle Works in cifraHQ

1

Open the Period

Create the payroll period (monthly, biweekly) and register each employee's income concepts.

2

Calculate

One click on Calculate and the PanamaPack 2026 engine applies CSS, SE and income tax to every employee automatically.

3

Review and Close

Review the per-employee breakdown. On close, cifraHQ posts the accounting entry to the GL automatically.

4

Export and Pay

Download SIPE for CSS, the ACH file for the bank and Form 03 for the DGI. Pay slips ready for employees.

Why Panamanian Companies Choose cifraHQ for Payroll

No Calculation Errors

CSS, SE and income tax rates are applied by the system, not by a person. Eliminate payroll errors that lead to CSS penalties or employee claims.

CSS and DGI Compliance

SIPE, Form 03 and ACH generated in the system. Meet your obligations with the Social Security Fund and the DGI on time, every month.

Integrated with Accounting

Each period close automatically generates the accounting entry in the GL. Payroll and accounting are always in sync, with no data copied between systems.

Settlements Without Legal Risk

The wizard calculates seniority premium, notice and pro rata exactly as required by Panama's Labor Code. Avoid disputes with former employees that turn into labor lawsuits.

More Solutions for Companies in Panama

Electronic Invoicing Panama

Direct integration with ETAX via WebPOS Panama. Invoice electronically without leaving cifraHQ.

Cloud Accounting Panama

General Ledger, bank reconciliation, ITBMS and integrated financial reporting for Panama.

ERP Panama

See the complete ERP for Panamanian companies: sales, purchasing, inventory and more.

FAQ: Payroll in Panama

cifraHQ applies the current Social Security rates: 9.75% employee and 12.25% employer. Educational Insurance is calculated separately: 1.25% employee and 1.50% employer. All rates apply to the period's contributable salary with no manual input on your part.

For the 13th-month bonus, the special CSS rate is 7.25% (not the regular 9.75%), as set out in Panamanian Executive Decree.

cifraHQ calculates the bonus by dividing the quarter's contributable income by 12, as required by Art. 145 of the Labor Code (the denominator is always 12, not the number of months in the quarter). It applies the special CSS rate of 7.25%. The bonus is exempt from income tax.

The three annual installments and their deadlines are managed from Payroll > 13th-month: 1st installment April 15, 2nd August 15, 3rd December 15.

cifraHQ uses the annualization method (Art. 699 of the Tax Code): annualizes the period's contributable salary, applies the personal exemption of B/.800 annually, and calculates income tax under the current brackets:

  • 0% on annual income up to B/.11,000
  • 15% on B/.11,001 to B/.50,000
  • 25% on the excess over B/.50,000

From the Payroll Exports module you can download:

  • SIPE payroll - for filing with the Social Security Fund
  • Form 03 - Annual Income Tax Return for the DGI (deadline: May 31)
  • ACH file - for payroll payment by bank transfer
  • Pay slips - individual for each employee
  • Employment certifications - for employee paperwork

The 4-step settlement wizard calculates the full settlement based on the cause of termination. Coverage includes:

  • Seniority premium: 20 days of salary per year of service (on unfair dismissal)
  • Notice: 1 month (0–2 years), 2 months (2–10 years), 3 months (10+ years)
  • Prorated vacations and prorated 13th-month in all cases
  • CSS, SE and income tax deductions on the contributable components

Ready to Automate Your Panama Company's Payroll?

Made in Panama. Built for the Panamanian Labor Code. Integrated with CSS, the DGI and your accounting.

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