Spontaneous pneumothorax in COVID-19 occurs infrequently but in up to 15% of patients dependent on mechanical ventilation (MV). Pneumothorax-related deaths account for 1% of all COVID-19-related deaths. To determine factors associated with pneumothorax in COVID-19 patients and the effect of pneumothorax on early survival. This was a retrospective study of 4799 COVID-19-positive hospitalized patients. The groups were homogenized using propensity score matching (PSM) in two groups comprising 67 COVID-19 patients each. The prevalence of pneumothorax was determined. Multiple logistic regression was used to determine factors associated with pneumothorax. P value < 0.05 was taken as significant. The prevalence of pneumothorax in COVID-19 patients was 1.6%. Lung disease, comorbidities, and oxygen support, which were significantly different between the two groups before PSM, were homogenized after PSM. In a univariate analysis, symptom duration (P ˂ 0.001), neutrophilia (P ˂ 0.001), lymphopenia (P ˂ 0.001), neutrophil-lymphocyte ratio (P = 0.003), ferritin levels (P = 0.012), D-dimer levels (P = 0.011), MV support (P ˂ 0.001), antibiotherapy (P ˂ 0.001), length of hospital stay (P = 0.009), and death (P = 0.002) differed significantly between the groups. Pneumothorax had a significant negative effect on survival (32.8% vs. 59.7%, P = 0.01). In a multivariate regression model, factors associated with pneumothorax were duration of symptoms (Adjusted Odds ratio (AOR) 1.68; 95% Confidence Interval (CI): 1.26-2.25; P = 0.001), mechanical ventilation (AOR 23.92; 95% CI: 4.12-138.72; P = <0.001), dual antibiotics (AOR 8.28; 95% CI: 1.56-43.86; P = 0.013), neutrophilia (AOR: 1.08; 95% CI: 1.02-1.14; P = 0.011), and lymphopenia (AOR: 0.92; 95% CI: 0.86-0.90; P = 0.022). The presence of pneumothorax was associated with poor survival in COVID-19 patients. Patients with a prolonged time from symptom onset to treatment and those dependent on mechanical ventilation in intensive care were in the high risk group for the development of pneumothorax.