Excerpted from the Panama Country Guide
Cost of Living
Prices vary throughout Panama; Panama City is perhaps the most expensive area. An expat couple can live comfortably in Panama City for approximately 2,500 USD per month.
Panama City offers a number of living options, although apartment towers dominate the city. There is extensive construction underway, including home renovations, new high-rises, infrastructure and beautification.
Buses are a popular form of public transportation in Panama. Modern buses are slowly being rolled out in Panama City, which is upgrading its bus transportation system with the MetroBus, replacing the colorfully painted buses known as diablos rojos (red devils).
Medical Care/Health Insurance
Panama City has very good hospitals and clinics, including some of the most advanced in the region, but outside the capital city, quality medical care is scarce. In fact, outside the capital, only in Chiriquí province are there large health centers with modern equipment.
Work Schedules and Holidays
Workers are eligible for 30 days of vacation following 11 months of uninterrupted work, or 1 day for every 11 days of work. One weekly day of rest (usually Sunday) is compulsory for every employee.
The standard VAT rate in Panama is 7 percent. Accommodations and alcohol are taxed at a special 10 percent rate, and tobacco at 15 percent.
Social Security and Pension
The country has both a social security and individual account system. This hybrid system is mandatory for all individuals entering the labor force after 2008, and for self-employed persons earning more than 500 PAB per month who were under the age of 35 in 2007.