Net salary calculator for Panama: what is left after deductions

In short: a worker in Panama pays 9.75% of salary to the Social Security Fund, 1.25% in education insurance and, when annual net income exceeds 11,000 dollars, income tax in 15% and 25% brackets. This calculator turns a gross monthly salary into net monthly and annual pay. On a salary of 1,500 dollars a month, about 1,272 dollars are left.

Estimate for a monthly salary paid 12 times a year. It does not include the thirteenth-month payment, overtime, commissions or personal deductions. It does not replace payroll advice.

What is deducted from salary

ItemRatePaid by
Social Security Fund9.75%Worker
Education insurance1.25%Worker
Income tax, up to 11,000 USD of annual net income0%Worker
Income tax, 11,000 to 50,000 USD15%Worker
Income tax, above 50,000 USD25%Worker
Key fact: the employer’s Social Security contribution, 13.25% since April 2025, is not deducted from the worker: the company pays it on top. It is explained in the Social Security contribution guide.

Three examples

Gross monthly salarySocial SecurityEducation insuranceMonthly income taxNet salary
800 USD78.0010.000.00712.00
1,500 USD146.2518.7562.751,272.25
3,000 USD292.5037.50263.002,407.00

How it is calculated

  • Social security deductions: gross salary × 9.75% and × 1.25%.
  • Annual taxable income: (gross salary − Social Security − education insurance) × 12.
  • Income tax: 0% up to 11,000, 15% between 11,000 and 50,000 and 25% above, divided by 12 for the month.
  • Net salary: gross salary − the three deductions.

What this calculator leaves out

It does not include the thirteenth-month payment, overtime, commissions or the personal deductions that reduce taxable income, such as mortgage interest, education or health. A worker with those deductions pays less income tax than the result shown.

Frequently asked questions

How much is deducted from a salary in Panama?

The worker pays 9.75% to the Social Security Fund and 1.25% in education insurance. Income tax is also due when annual net income exceeds 11,000 dollars, at 15% and 25% by bracket.

Who pays the 13.25% Social Security contribution?

The employer pays it, not the worker. Since April 2025 the employer rate is 13.25% of salary, and the law raises it in steps in 2027 and 2029.

At what salary is income tax paid?

When annual net income exceeds 11,000 dollars. With a monthly salary of about 1,000 dollars, once social security is deducted, annual income stays below that line and no income tax is due.

Does this calculator cover the thirteenth-month payment?

No. The thirteenth month is paid in three installments and has its own treatment. The calculator covers the ordinary monthly salary only.

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