Panama: Personal Taxation
Social Security Taxes
Employers and employees make social security contributions in Panama: the employer in 2013 pays 12.5 (12% prior) of salaries and wages, plus a 1.5% for an educational insurance tax; the employee pays 9.75% (9% prior to 2013. The employer deducts the social security contribution along with income tax. The self-employed also make contributions.
A 2005 law increased the retirement age to 65 years from 62 years for men, to 60 years from 57 years for women, and extended the minimum time required to pay into the fund in order to draw from it when retired to 25 years from 15 years. The changes also required the self-employed and small business owners to contribute 12.5% of their gross income to the social security fund.