Can I Claim Staff Salaries as a Business Expense in Panama?
Yes. Salaries paid to employees are a normal cost of running a Panamanian business, and the related CSS contributions and the décimo tercer mes belong in the same payroll cost.
Finn does your books in Panama
AccountsOS runs full accounting for Panama businesses, tax, expenses and deadlines, in plain English. Ask Finn about yours, no signup needed.
What Dirección General de Ingresos (DGI), Ministry of Economy and Finance (MEF) says
Employee salaries are generally deductible when they are incurred to earn taxable Panama-source income and are properly recorded. Income tax withheld from salaries is remitted to the DGI, and CSS contributions are remitted through SIPE on a separate calendar.
When you can claim
- Gross salaries of employees working in the business
- Employer CSS contributions, Educational Insurance and Professional Risk premium
- Décimo tercer mes instalments paid on 15 April, 15 August and 15 December
- Salaries of staff who work on Panama-source income
When you cannot claim
- Payments with no payroll record or supporting contract
- Salary costs that relate only to foreign-source income, where the exemption applies (confirm with a CPA)
- Personal spending paid through payroll
- Penalties for late remittance
Good to know
Pro tip: Budget for the three décimo tercer mes payments as well as monthly salary. They land in April, August and December and are easy to miss in a forecast.
Stop guessing what you can claim in Panama
AccountsOS automatically categorises expenses with Dirección General de Ingresos (DGI), Ministry of Economy and Finance (MEF)-aware rules and tells you exactly what is claimable.
Try Free