1. What is Panama Salary Calculation?

The Panama Salary Calculator estimates net pay after accounting for income tax and social security contributions based on 2025 tax brackets and rates. It helps employees and employers understand take-home pay.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Gross Pay — Annual salary in Panamanian Balboas (PAB)
• Income Tax — Calculated based on 2025 tax brackets
• Social Security — 9.25% of gross pay

2025 Income Tax Brackets:

• 0 - 11,000 PAB: 0%
• 11,001 - 50,000 PAB: 15%
• 50,001 - 100,000 PAB: 25%
• 100,001+ PAB: 27%

3. Importance of Net Salary Calculation

Details: Understanding net pay helps with financial planning, budgeting, and employment contract negotiations. It provides clarity on actual take-home pay after mandatory deductions.

4. Using the Calculator

Tips: Enter your annual gross salary in Panamanian Balboas (PAB). The calculator will automatically compute income tax, social security contributions, and net pay.

5. Frequently Asked Questions (FAQ)

Q1: Are these tax rates confirmed for 2025?
A: This calculator uses projected 2025 tax brackets based on current legislation. Always verify with official sources.

Q2: What's included in social security contributions?
A: This includes pension, disability, and health insurance contributions totaling 9.25% of gross pay.

Q3: Are there additional deductions?
A: This calculator shows mandatory deductions only. Additional voluntary deductions may apply.

Q4: How often are taxes calculated?
A: In Panama, income tax is calculated annually but often deducted monthly from paychecks.

Q5: Is this calculator for employees only?
A: Yes, this is for salaried employees. Self-employed individuals have different contribution rules.