Enter a Panamanian salary in US dollars and this calculator applies the resident scale: nothing on the first $11,000, 15% up to $50,000 and 25% above. It also deducts the two employee charges that come off every payslip, CSS social security at 9.75% and educational insurance at 1.25%, neither of which has a salary ceiling. Panamanian law works the tax out on pay after those contributions and after personal deductions; this calculator taxes gross salary, so the tax figure is overstated.
Income tax and employee contributions, 2026 rates.
| Breakdown | Amount |
|---|
Estimates for a single employee with standard allowances, calculated in your browser. Rates checked October 2026. Not tax advice.
Panama taxes Panamanian-source income only, so a resident earning from abroad pays no Panamanian tax on that income. For a local salary the scale has three steps: a 0% band to $11,000, 15% on the slice up to $50,000, and 25% above that. Amounts are in US dollars; the balboa circulates at par and salaries are usually quoted in dollars. The mandatory 13th-month bonus is taxed and contributed at special rates, and it is left out of this model.
The contributions are a heavy fixed cost. CSS at 9.75% and educational insurance at 1.25% apply to the whole salary with no cap, so together they take 11% of pay before income tax is even considered. In the statutory calculation both contributions come off the tax base, and personal deductions apply on top, such as the $800 basic deduction for joint filers and relief for mortgage interest and pension contributions. None of that is modelled here, which is why the tax shown is an upper bound.
| Taxable income band | Rate |
|---|---|
| Up to $11,000 | 0% |
| $11,000 – $50,000 | 15% |
| Above $50,000 | 25% |
Bands apply to taxable income — what is left after any allowance.
| Gross salary | Income tax | Social | Take-home | Effective rate |
|---|---|---|---|---|
| $25,000 | $2,100 | $2,750 | $20,150 | 19.4% |
| $50,000 | $5,850 | $5,500 | $38,650 | 22.7% |
| $100,000 | $18,350 | $11,000 | $70,650 | 29.4% |
| $200,000 | $43,350 | $22,000 | $134,650 | 32.7% |
On $50,000 a year, take-home pay in Panama is $38,650 — about $3,221 a month — after $5,850 in income tax and $5,500 in social contributions. Salary levels are the local equivalents of US$25,000 / $50,000 / $100,000 / $200,000 at the ECB reference rate of 28 October 2026, rounded.
| Contribution | Rate | Applies from | Applies up to |
|---|---|---|---|
| Social security — CSS | 9.75% | First $0 | No cap |
| Educational insurance (seguro educativo) | 1.25% | First $0 | No cap |
Employee side only. Employer contributions, where a country charges them, do not come out of your pay and are not in these results.
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