How employment income is taxed
Panama uses a progressive income-tax schedule for the standard resident scenario in this calculator. We first apply the modelled allowance of PAB 4,480, calculate tax band by band, and then add common employee-side social contributions.
Resident employment income, the standard personal allowance, national income tax and common mandatory employee contributions. Optional regional tax is shown where the calculator offers a state or province control.
2026 income tax brackets
Marginal rates apply only to income within each slice. The personal allowance and deductions are applied before this table.
What typical salaries may keep
These examples use the default single employee assumptions and local currency. Open the calculator above to refine the scenario.
Assumptions and exclusions
- This standard model is designed for international comparison, not return preparation.
- Allowances, local taxes and contribution ceilings vary with personal circumstances.
- The calculation assumes a full-year resident employee with regular salary income and no unusual credits, benefits in kind or other income.
- Exchange rates affect international comparison only; local tax is always calculated in PAB.
Where the model comes from
We prefer tax authorities and statutory material. Dates tell you when the model was reviewed, not when a linked page was first published.
Panama tax authority / OECD Taxing WagesOfficial / primary reference ↗