The Fondo de Cesantia is a mandatory employer-funded trust account for every private-sector employee on an indefinite-term contract in Panama, established by Ley 44 de 12 agosto 1995. Each month the employer provisions two amounts into the trust:
On termination, the trust company disburses these accumulated funds to the employee, offsetting the employer's liquidacion obligation.
| Condition | Covered by fund? |
|---|---|
| Indefinite-term contract, private sector | Yes - mandatory |
| Fixed-term contract | No |
| Contract workers / independent contractors | No |
| Public sector Employees | No (separate regime) |
| Probationary period Employees | Yes - fund accrues from day 1 |
Art. 1, Ley 44/1995: "Todo empleador del sector privado que tenga trabajadores con contratos por tiempo indefinido esta obligado a inscribirse en un fondo de cesantia."
| Concept | Rate | Legal basis |
|---|---|---|
| Prima de antiguedad | 1.92% of cotizable monthly salary | Art. 224 CT |
| Indemnizacion | 5.00% of cotizable monthly salary | Art. 225-C CT |
| Total employer contribution | 6.92% | Both articles |
Rates are applied to the same cotizable salary base used for CSS contributions. Overtime pay, commissions, and other cotizable earnings are included; non-cotizable allowances (transportation, representation, meals) are excluded.
These rates are set per Ley 44 and cannot be changed by the employer. If a collective agreement specifies higher rates, the higher rate applies. CifraHQ stores rates in the Cesantia Policy so they can be adjusted if required by law or agreement.
Contributions accrue monthly and must be physically transferred to the trust company within 15 days of each quarter end:
| Quarter | Period | Deposit deadline |
|---|---|---|
| Q1 | January 1 - March 31 | April 15 |
| Q2 | April 1 - June 30 | July 15 |
| Q3 | July 1 - September 30 | October 15 |
| Q4 | October 1 - December 31 | January 15 (next year) |
Late deposits incur interest at the CSS reference rate.
Panama's Ministry of Labor (MITRADEL) maintains an approved list of licensed trust companies. Common options include:
The trust company name and account number are configured once per tenant in Policy setup. CifraHQ generates a deposit transfer file the treasurer uses to wire funds.
The payout depends on the cause of termination:
| Cause | Prima | Indemnizacion |
|---|---|---|
| Voluntary resignation (renuncia sin justa causa) | Paid to employee | Refunded to employer |
| Justified dismissal (Art. 213 CT) | Paid to employee | Refunded to employer |
| Unjustified dismissal (Art. 225-C CT) | Paid to employee | Paid to employee |
| Mutual agreement (Acuerdo mutuo) | Paid to employee | Negotiated |
| Employee justified resignation (Art. 223 CT) | Paid to employee | Paid to employee |
The accumulated fund balance offsets the employer's direct cash obligation. Any shortfall (e.g., if the fund was not fully funded) remains the employer's responsibility.
| Feature | Status |
|---|---|
| Monthly Accrual provisions | Included |
| Quarterly Deposit batches | Included |
| Bank transfer file (CSV) | Included |
| GL Journal Entries | Included |
| Termination offset calculation | Included |
| Employee balance statement (PDF) | Included |
| Per-trust-bank file formats | Generic CSV/XLSX (bank-specific adapters on request) |
Related: Policy Setup - Monthly Accrual - Quarterly Deposit - Termination Payout - Reports - Terminations
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