Payroll Concepts
Payroll Concepts
A Payroll concept is a named, typed item that appears as a line on a Payroll run — "Base Salary", "CSS Employee", "ISR", "Overtime", "Loan Payment", etc. The concept catalog defines every possible line type; the Payroll engine decides which ones to generate automatically and which ones you add manually.
Where to find it
Go to Payroll > Concepts.
Payroll Concepts list, the earnings, deductions and contributions used by Payroll.
Concept types
Every concept has a type that determines how it affects the Payroll summary.
| Type | Effect |
|---|---|
| Earning | Adds to gross pay (e.g., Base Salary, Overtime, Bonus) |
| Deduction | Subtracts from gross pay (e.g., CSS Employee, ISR, Loan Payment) |
| Employer Cost | Recorded as employer burden — not deducted from employee net pay (e.g., CSS Employer, SE Employer, Occupational Risk) |
| Informational | Appears on the payslip for reference but does not affect net pay (e.g., 6-month average salary) |
System concepts (automatic)
CifraHQ creates and maintains the following concepts automatically. They are generated by the PanamaPack 2026 engine when you calculate a Payroll run. You cannot delete system concepts.
Earnings
| Concept | Code | Description |
|---|---|---|
| Base Salary | BASE_SALARY |
Prorated gross salary for the period |
| Overtime Regular | OT_REGULAR |
Overtime at 125% of hourly rate |
| Overtime Holiday | OT_HOLIDAY |
Overtime on public holidays at 150% |
| Décimo Tercer Mes | DECIMO |
Accrued décimo for the period (informational on regular runs) |
| Proportional Décimo | DECIMO_PROP |
Décimo accrual shown on termination liquidación |
| Proportional Vacation | VACATION_PROP |
Unused vacation pay on termination |
| Seniority Bonus | PRIMA_ANTIGUEDAD |
Prima de antigüedad on unjustified dismissal (20 days per year) |
| Severance Pay | PREAVISO |
Notice period payment |
| Pending Salary | PENDING_SALARY |
Outstanding wage days at termination |
Deductions
| Concept | Code | Description |
|---|---|---|
| CSS Employee | CSS_EMPLOYEE |
Employee CSS contribution — 9.75% of cotizable salary |
| SE Employee | SE_EMPLOYEE |
Employee Seguro Educativo — 1.25% of cotizable salary |
| ISR Withholding | ISR |
Income tax withholding — annualized bracket method |
| CSS Décimo | CSS_DECIMO |
CSS deduction on décimo at the special 7.25% rate |
| SE Décimo | SE_DECIMO |
SE deduction on décimo at 1.25% |
Employer costs
| Concept | Code | Description |
|---|---|---|
| CSS Employer | CSS_EMPLOYER |
Employer CSS contribution — 12.25% of cotizable salary |
| SE Employer | SE_EMPLOYER |
Employer Seguro Educativo — 1.50% of cotizable salary |
| Occupational Risk | RIESGO_PROF |
Occupational risk insurance — rate varies by risk class (0.294%–3.92%) |
| CSS Employer Décimo | CSS_EMP_DECIMO |
Employer CSS on décimo at the special rate |
Custom concepts
You can create concepts for earnings or deductions specific to your company — commissions, transportation allowance, gym membership deduction, loan repayments, etc.
Creating a concept
- Go to Payroll > Concepts and click New.
- Set the Name (user-facing label on payslips and Exports).
- Set the Code (internal identifier, letters and underscores only).
- Set the Type — Earning or Deduction.
- Choose whether the concept is Taxable (included in the ISR cotizable base) and CSS Applicable (included in the CSS cotizable base).
- Save.
Custom concepts appear in the Add Line form inside a Payroll run. You enter a quantity, rate, and the system computes amount = quantity × rate.
CSS and ISR cotizability
Panama law distinguishes between total income and cotizable salary — the base used for CSS and ISR calculations. Not all payments are cotizable.
| Payment | CSS cotizable | ISR cotizable |
|---|---|---|
| Base salary | Yes | Yes |
| Overtime | Yes | Yes |
| Commission | Yes | Yes |
| Representation allowance (≤ 25% salary) | No | No |
| Transportation allowance (fixed) | No | No |
| Food allowance | No | No |
| Décimo tercer mes | Special rate | No (exempt by law) |
When creating custom concepts, check the CSS Applicable and Taxable flags according to this classification. Misconfigured flags cause incorrect CSS and ISR withholding.
Tips
- Do not duplicate system concepts. Creating a "Base Salary" custom concept alongside the system
BASE_SALARYconcept will result in double-counting on the payslip. - Use Informational type for memo items. If you need to show a figure on the payslip without affecting net pay (e.g., a running loan balance), use type Informational.
- Concepts are company-wide. Every concept in the catalog is available across all Employees. There is no per-employee concept catalog.
Related: Payroll Periods and Runs · Employees · Account Priming
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