We have to use a Trust Fund Checking account (Fidelity Bank) to pay our gardener but he doesn't have a checking account. Is it easy for Panamanians to open a checking account to cash their checks or is it just as hard for them? We can't pay him cash for tax purposes. Is there a particular bank that is easy for Panamanians which isn't too expensive. He told me one bank charges $50 to open a checking account. Thanks.
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Thanks for the replies. Without getting too involved in my personal finances and tax & estate planning reasons, I wanted to see if there was any other way besides cash to pay an employee. I was interested in more constructive information, so thank you CierzoPanama for the Western Union reply. There is a Western Union app that I can put my checking account info into online and my employee can pick up his funds at the local Western Union branch. He was ok with this and the Western Union fee is $5-$8 that I would pay. Worth it to stay in compliance. And of course, if I'd be paying with a paper trail like an online check it would make sense to be in compliance with the labor laws. Thanks.
One simple way would be to pay the gardener with a check and then have him endorse it on the back and give it back to you and you give him cash. You can then process the check through a bank yourself. Have him write his cedula number on the check so that it will match up with your employee records.
I used to do this fairly often in the US with casual workers or when buying materials or equipment from individuals or at flea markets.
It’s more than about fines, it is the right thing to do! To try to bypass the system for a good employee that now has medical insurance for his wife and three kids? In my opinion, it’s also unethical.
That depends on how much they work. If they work only one day a week for you and also work for other people, you do not have to pay their social security. I checked the labor law.
Sorry - I am just laughing at the thought of pulling out a check to pay our gardener - even on a bank in Panama and we do have a local bank account!
Honestly, I am not doing this at your expense, but as others have already said, there is no way. Personally, if for whatever reason someone wanted to give me a check from the US, I wouldn’t accept it either. Unless one were to tack on a 25% processing fee - or make up a number.
I’m sure you are new and this is a good resource for questions such as yours. Since your questions were answered, I thought I would share how I can understand what you may have thought, but after you are here a while, you can laugh with me at this!
Best Wishes!
a worker here would be charged $21 for the processing of the check in their account and it takes 21 days to clear. so, the fee for the check is usually more than they make. you must be new here. use the atm machine for a charge of $5.25 or open a panamanian bank so you can use cash or local cards.
You will find, except when dealing with companies, for example Grupo Aguas, almost all workers will have to be paid in cash. They need the money right now, sometimes to pay their own helpers. Why can't you just get a receipt from them and use that for your tax purposes?
and when you pay in cash DO NOT pay in $50 and $100 dollar bills like I have see some expats do. Small bills
If you can’t pay your gardener in cash, and on time, he won’t be working for you very long.
You’ll find that no one here wants to accept a Cheque drawn on a U.S. Bank, just like no one in the U.S. would want to take a Cheque drawn on a Panamanian Bank.
Something about foreign countries.
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