Cost of living in Panama in 2026

8 min read · Published 6 October 2026 · Updated 7 October 2026

One person in Panama City needs about $1,600-2,600 a month including rent, and much less in mountain Boquete. The currency is the dollar, lunch at a local café costs $5-8, and foreign income is not taxed.

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Key facts	2026
Single person with rent in Panama City	$1,600-2,600 a month
Couple	$2,400-3,600 a month
Family with a child	from $4,000 a month
One-bedroom flat in a prime district of the capital	$1,200-1,800 excluding utilities
Median wage in 2025	~$760 a month
Metro ride	$0.35-1.35

Data checked: 07.10.2026

Panama uses the US dollar, so prices do not jump with the exchange rate and a budget is easy to plan. A simple life here is inexpensive: lunch at a local café costs $5-8, a metro ride less than a dollar and a half, and fruit at the market next to nothing. What is expensive is anything imported: supermarket groceries, cars and electronics.

The main expenses are rent and air conditioning. The capital is hot and humid all year, so electricity for a flat with air conditioning costs $100-250 a month. In mountain Boquete, about a thousand metres up, it is cool, air conditioning is not needed and rent is lower, which is why many retirees go there.

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Prices in 2026: rent, groceries, transport

Monthly item	Panama City	Boquete
One-bedroom flat in the centre	$1,200-1,800	$750-1,000
One-bedroom flat in a cheaper district	$750-1,100	$650-800
Two-bedroom flat in the centre	$1,600-2,500	-
Utilities	$100-250	$50-100
Internet and mobile	$50-90	$50-90
Groceries per person	$300-450	$300-450
Public transport	$30-70	-
Lunch in an inexpensive café	$5-8	$6-10
Private doctor visit	$50-90	$50-90
Private health insurance	$100-300	$100-300
International school, per year	$10,000-25,000	-

Rents are for furnished flats on leases of a year or more, excluding utilities. In the capital the most expensive areas are Punta Pacífica, Costa del Este, San Francisco and Obarrio with new towers by the sea, cheaper ones El Cangrejo, Bella Vista in older buildings and Betania. In Boquete prices are higher in the town centre and in gated communities.

Utilities in the capital cost $100-250 a month, mostly electricity for air conditioning, and $50-100 in Boquete. Water and rubbish collection cost $20-40. All amounts are in US dollars, like every price in Panama.

Monthly budget: single, couple, family with a child

Household	Per month
Single person	$1,600-2,600
Couple	$2,400-3,600
Family with a child	from $4,000

The single budget assumes a one-bedroom flat in the capital, groceries, utilities with air conditioning, phone and internet, metro and taxis and moderate café spending. Renting in a cheaper district, a single person needs $1,300-1,600, and in Boquete $1,100-1,600 a month.

In Panama the budget starts with the grounds for residence

Citizens of many countries can stay in Panama as tourists for up to 180 days, but a one-year lease, a bank account and a local driving licence need a residence permit, and banks are reluctant to open accounts without one. The law does not stop you applying on your own. But mistakes cost more: a pension or income documented in a way the immigration service does not accept, documents without an apostille and translation, a missed deadline to replace the temporary card and a refusal that sends you back to the start. We choose the grounds - a pension, investment, employment or the friendly nations route - prepare the documents and handle the case up to the permanent card.

The cost of support depends on the grounds and your family; a manager will calculate it in the chat.

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What to pay in the first month

A deposit for the flat - usually one or two months' rent, plus the first month paid in advance.
The first month's rent in the capital - $1,200-1,800 for a one-bedroom flat in a prime district.
Private health insurance: public healthcare is almost out of reach for foreigners without a job.
A local SIM card and a transport card for the metro and buses.

For the first three months a single person needs from $6,500 with rent in the capital, a deposit and living costs. Residence permit fees depend on the grounds.

Where to live: comparing cities

Panama City is a business and financial centre with ocean-front skyscrapers, the region's largest airport and the only metro in Central America. It has private hospitals, international schools and banks, and life feels like an American city. The downsides are heat, humidity and rush-hour traffic.

Boquete is a mountain town in Chiriquí province known for its coffee farms and mild climate, with a large community of retirees from the USA, Canada and Europe. A one-bedroom flat in the centre costs $750-1,000, but the nearest large hospital, in David, is about half an hour away, and the capital an hour by plane.

Districts and prices in detail: Panama City.

Healthcare and insurance

Public healthcare in Panama serves those insured with the social security fund, mainly employees and their families. Foreigners usually use the capital's private hospitals, which work to American standards, and many doctors trained in the USA and speak English.

A specialist visit at a private clinic costs $50-90, and private insurance $100-300 a month depending on age and cover. Retirees with a residence permit get discounts on medical services and medicines.

Schools and nurseries

State schools are free and teach in Spanish. The capital has dozens of bilingual and international schools with American, British and international curricula, with fees of $10,000-25,000 a year.

Boquete has few schools, so families with school-age children usually live in the capital or in David.

Salaries and taxes

The median wage in Panama in 2025, according to the National Institute of Statistics, was about $760 a month: half of employees earn less. Almost a third earn $600-800 a month, and only about 15% earn more than $1,500.

Panama taxes only income from local sources. Salary tax is 0% up to $11,000 a year, 15% from $11,000 to $50,000 and 25% above, plus employee contributions of 9.75% to social security and 1.25% to the education fund. Pensions, dividends and earnings from foreign clients are not taxed in Panama.

How to cut costs

Rent in El Cangrejo or Betania instead of a sea-front tower: the same space is 30-40% cheaper.
Eat at local cafés: a lunch of rice and meat costs $5-8, at a restaurant for foreigners $15-25.
Buy fruit, vegetables and fish at markets rather than imported groceries at the supermarket.
Take the metro and buses instead of taxis: a ride costs less than a dollar and a half.
Choose a well-insulated flat with a modern air conditioner: the electricity bill is the second largest expense after rent.

The main saving is the district and your habits. Someone who lives in a sea-front tower, drives and buys imported food spends as much as in Miami. Someone who rents in an older district or lives in Boquete and eats local food gets by on $1,300-1,600 a month.

This topic in other countries

Cost of living in other countries:

FAQ

How much money do you need to live in Panama?

A single person in the capital needs about $1,600-2,600 a month with rent, a couple $2,400-3,600 and a family with a child from $4,000. In Boquete a single person gets by on $1,100-1,600.

How much does it cost to rent a flat in Panama?

A one-bedroom flat in a prime district of the capital costs $1,200-1,800 a month excluding utilities, $750-1,100 in El Cangrejo or Betania, and a two-bedroom flat by the sea $1,600-2,500.

What currency is used in Panama?

The US dollar. The local balboa is pegged one to one to the dollar and circulates only as coins, so all prices and wages are in dollars.

What is the average salary in Panama?

The median wage in 2025 was about $760 a month, according to the statistics institute. Only about 15% of employees earn more than $1,500.

How much is electricity in Panama?

In the capital, $100-250 a month for a flat with air conditioning, and $50-100 in cool Boquete. Air conditioning is the main reason for high bills.

Do foreigners pay tax in Panama on foreign income?

No. Panama taxes only income from local sources, so pensions, dividends and earnings from foreign clients are not taxed there.

Where to live: the capital or Boquete?

The capital if you need work, schools, hospitals and the airport. Boquete for the cool climate, quiet and lower rent, but hospitals and the airport are further away.

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