Contents of this guide
What aguinaldo means in Panama and what the law calls it
In Panama the legal equivalent of the aguinaldo is the thirteenth month payment, a bonus that Cabinet Decree 221 of 18 November 1971 requires every employer to pay. In everyday speech, and among foreigners, it is called aguinaldo, but that name does not appear in the decree.
Article 1 of Cabinet Decree 221 of 1971, Official Gazette 16989 calls it “décimo tercer mes” and article 4 extends it to private activities and to public institutions without a national government subsidy. Law 52 of 1974 instituted it for public servants and Law 20 of 1992 restored the second installment for both sectors.
The detail of the rule and claim deadlines is in Radar’s guide to the thirteenth month payment.
Who is paid and when
Private-sector workers and public servants receive the thirteenth month payment in three proportional installments, due by 15 April, 15 August and 15 December each year. Article 3 of the 1971 decree, in the text left by Cabinet Decree 52 of 1972, sets this, and Law 52 of 1974 repeats the dates as the State’s maximum deadline.
| Installment | Deadline | Day in 2026 |
|---|---|---|
| First | 15 April | Wednesday |
| Second | 15 August | Saturday |
| Third | 15 December | Tuesday |
In the public sector the State announces the actual calendar: the Comptroller General reported on 5 August 2026 that the second installment would be paid on Thursday, 6 August. If the 15th falls on a weekend, MITRADEL is consulted.
How the Panamanian aguinaldo is calculated, with an example
The 1971 decree sets one day of salary for every eleven days of actual work. In practice, Radar adds up what was earned in the installment period and divides by 12.
- Set the period of the installment, which lasts four months; the cut-off is confirmed with MITRADEL.
- Add up what was earned: base salary, overtime with surcharge, commissions, bonuses and premiums.
- Divide the total by 12. The result is the gross installment, before deductions.
Illustrative example, with invented figures: a person earning 900 dollars a month earns 3,600 over the four months of the installment.
| Item (invented figures) | Calculation | Amount |
|---|---|---|
| Earned in the period | 4 months times 900 dollars | 3,600.00 dollars |
| Gross installment | 3,600 divided by 12 | 300.00 dollars |
| Worker’s social security contribution | 7.25% of 300 | 21.75 dollars |
| Received by the worker before income tax | 300.00 minus 21.75 | 278.25 dollars |
The example does not compute income tax, which depends on each taxpayer. Radar’s thirteenth month calculator runs the operation with the real salary, and the guide to overtime explains which surcharges count.
What deductions apply
The thirteenth month payment carries only social security and income tax, under the 1971 decree and article 2 of Law 20 of 1992.
| Deduction | Rate or rule | Source |
|---|---|---|
| Social security, paid by the worker | 7.25% of each installment | Single Text of Law 51 of 2005, art. 96, item 5 |
| Social security, paid by the employer | 10.75% of the sum paid | Single Text of Law 51 of 2005, art. 96, item 4 |
| Income tax | Applies; the rate depends on the taxpayer and is confirmed with the DGI | Law 20 of 1992, art. 2 |
What aguinaldo means in other countries
In Mexico and Guatemala the law does use the word aguinaldo, for an annual payment different from the Panamanian one, which in Panama comes in three installments.
| Country | What the rule sets | Source |
|---|---|---|
| Mexico | At least fifteen days of salary, before 20 December, proportional if the year was not completed | Article 87 of the Federal Labor Law, as quoted by PROFEDET |
| Guatemala | 100% of monthly salary for a year of service: half in the first fortnight of December, half in the second of January | Decree 76-78, arts. 1 and 2 |
Other year-end bonuses by contract or at the employer’s choice
Besides the thirteenth month payment, an employer can give a Christmas gratuity or aguinaldo by contract, collective agreement or its own decision. Article 86 (item 6) of the Single Text of Law 51 of 2005 does not count as salary for the Social Security Fund “gratuities or aguinaldos” up to one month of salary; the excess is salary.
The Labor Code (article 142) provides that bonuses and gratuities count as salary only for vacations, maternity leave and seniority premium, and are not taken as custom or a working condition. It also mentions cases where there is a “Christmas bonus or aguinaldo.” The income tax treatment was not verified in an open rule and is checked with the DGI or an accountant.
Radar’s calculator gives the gross installment from the salary and what was earned.
Frequently asked questions
Does aguinaldo exist in Panama?
It exists under another name: the thirteenth month payment, which Cabinet Decree 221 of 1971 requires employers to pay. An extra Christmas aguinaldo exists only if the employer grants it by contract or its own decision.
What does Panama’s aguinaldo law say and when is it paid?
There is no law called aguinaldo; the rule is Cabinet Decree 221 of 1971, amended in 1972. It is paid in three installments, due by 15 April, 15 August and 15 December.
When is the aguinaldo paid in Panama in 2026?
The year’s third installment falls due on Tuesday, 15 December 2026 in the private sector.
How is the aguinaldo calculated in Panama?
What was earned in the installment period is added up and divided by 12. In the illustrative example, 900 dollars a month for four months give a gross installment of 300 dollars.
What is deducted from the aguinaldo in Panama?
The social security contribution, 7.25% paid by the worker, and income tax. The decree allows no other levy.
Related articles
- Thirteenth month pay in Panama: when it is paid and how it is calculated
- Thirteenth month pay calculator for Panama
- Net salary calculator for Panama
- December holidays in Panama: dates, long weekends and what closes
Sources checked on October 28, 2026 (official texts are in Spanish)
- Cabinet Decree 221 of 18 November 1971, Official Gazette 16989 and compiled text with amendments (Sijusa).
- Law 20 of 12 August 1992, Official Gazette 22099.
- Law 52 of 16 May 1974, Official Gazette 17617.
- Social Security Fund, Single Text of Law 51 of 2005 with the amendments of Law 462 of 2025, Official Gazette 30284-B.
- Panama Labor Code, article 142 (Justia edition).
- Comptroller General of the Republic, second installment of the thirteenth month of 2026.
- PROFEDET (Mexico), aguinaldo and article 87 of the Federal Labor Law.
- Guatemala Ministry of Labor, Aguinaldo Regulation Law, Decree 76-78.
Ask about this article
Type your question and we will show you the answer inside this article or in other Radar Panamá publications.
