Verify if your worker qualifies as “domestic” under the law

• Works continuously in your home (cleaning, assistance, cooking, driving, caregiving, etc.).
• Is not a close relative (up to 4th degree of consanguinity or 2nd of affinity).
• Works more than 3 days a week for you.
• Is 14 years old or older.

If these conditions are met, you must formalize the employment relationship.

The contract: avoid risks

• Always opt for a written contract, not verbal.
• Include salary, duties, schedule, and conditions.
• Take advantage of the 2-week trial period (only valid with a written contract).

Comply with legal obligations

• Mandatory registration with the CSS (Social Security Fund).
• Timely payment of employer and worker contributions.
• Payment of vacation, 13th-month bonus, and seniority premium.
• Respect legal rest periods:
• From 9:00 p.m. to 6:00 a.m.
• One weekly day off.

Calculate the real cost of hiring

• In addition to salary, add 15% – 17% to your budget to cover social security contributions and occupational risks.
• Remember that starting April 2025, the employer’s contribution will increase from 12.25% to 13.25%.

Know the penalties for non-compliance

• $100 fine for not registering the worker.
• Surcharges of 10% plus 1% monthly for late payments.
• Fines up to $5,000 in serious cases.
• Employer assumes all medical expenses in case of work accident if the worker is uninsured.

Smart solution: payroll outsourcing

• Delegate payroll management to a specialized provider:
• Registration and procedures with the CSS.
• Monthly salary and contribution filings.
• Payment of 13th-month bonus, vacation, and severance.
• Legal advisory and regulatory updates. 

Benefits:

• Save up to 30% of your time.
• Legal and financial peace of mind.
• Zero stress with bureaucratic procedures.

Conclusion:

If you are a professional in Panama with domestic staff, payroll outsourcing is the most practical, safe, and legal way to meet your responsibilities and protect your assets.

Want to forget about paperwork and fines? Learn how CES can manage your domestic payroll easily and securely.