Panama: Workers' Compensation Cards

There is growing use of the 'Vale Panamá' electronic cards as a means of compensation and bonuses payments to employees.

Wednesday, July 29, 2015

The main advantage of this mechanism is that the compensation paid by the company is exempt from labor costs, and can be used by employees in shops to buy food, medicine and other items.

Ana Lorena Broce, general manager of Vale Panama, reported that a lot of companies have migrated from the paper system to the electronic cards that are accepted at more than one thousand outlets.

Broce "... argues that these tools generate tax benefits, as they are exempt from labor costs. 'Employers can give this form of compensation at a lower cost and in turn the employee is rewarded with a higher purchasing power'. "

"... In Panama up to 30% of wages can be given in this format and there is a ceiling of $350 using these instruments. For example, if a person earns one thousand dollars, the maximum they can receive is $300 a month, but if the salary is $5,000, the maximum is $350. "



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The National Assembly approved a bill that establishes that by 2024, 100% of the resources retained by the Special Interest Compensation Fund will go to the agricultural sector.

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