Jennie,

You say that you have a panel outside next to the pool equipment. Is it in an enclosed area protected from weather? Are you able to turn off the pump from that panel? If so, then you should probably locate the timer between the panel and your pump (next to the panel if possible).

The timer justs acts like a switch to turn the electricity on and off so it can go anywhere between the electric source and the pump. For some people, the wire feeds from their basement out to the pump so it makes sense to put the timer in the basement. If you have a panel outside and it controls more things than just the pump, then you only want to switch the electricity off to the pump so the timer would need to located between the panel and the pump. Hope this helps.

Peter