Yes, tipping is customary in Panama, though it's generally more modest than in the United States and less obligatory than in some other countries.
Restaurants: A 10% tip is standard for good service. Some restaurants automatically add a 10% service charge to the bill, especially at tourist-oriented establishments — check your bill before tipping again on top of that. If service isn't included, leaving 10% (sometimes up to 15% for exceptional service) is appreciated. Rounding up the bill is fine at casual spots.
Bars: Tipping a bartender isn't strictly required, but leaving small change or a dollar or two per round is a nice gesture.
Taxis: Tipping taxi drivers is not customary or expected. Fares are often negotiated beforehand or metered in some cities, and rounding up to the nearest dollar is optional but not necessary.
Hotels: Bellhops and porters typically receive $1–2 per bag. Housekeeping is often tipped $1–2 per day, left in the room. If you use a hotel concierge for special arrangements, a few dollars is a thoughtful gesture.
Tour guides and drivers: For organized tours (city tours, jungle excursions, boat trips to islands like the San Blas or Bocas del Toro), tipping guides $5–10 per person per day (and a bit less for drivers) is common and appreciated, particularly since guiding is a significant part of many Panamanians' livelihoods, especially in tourism-heavy areas.
Spa and salon services: A 10% tip is typical for a good experience.
Panama uses the US dollar (called the balboa domestically, but interchangeable), so American visitors don't need to worry about currency conversion when calculating tips. Overall, while not tipping won't cause offense the way it might in the US, service industry workers do rely on tips as a meaningful supplement to their income, so leaving something for good service is considered polite and appreciated.