Panama Tax Calculator (2026)
Income tax rates and take-home pay for Panama
Panama Income Tax Brackets (2025)
| Bracket | Income Range | Rate |
|---|---|---|
| Exempt | $0 - $11,000 | 0.0% |
| Basic Rate | $11,000 - $50,000 | 15.0% |
| Higher Rate | $50,000+ | 25.0% |
Social Security Tax (CSS)
| Bracket | Income Range | Rate |
|---|---|---|
| Employee Contribution | $0+ | 9.8% |
Educational Insurance Tax
| Bracket | Income Range | Rate |
|---|---|---|
| Employee Contribution | $0+ | 1.3% |
Key Facts
Tax Year
2025
Currency
USD
Top Rate
25.0%
Brackets
3 brackets
Tax-Free Threshold
$11,000
Social Contributions
2 items
Assumptions
- · Worker profile is single, therefore the USD 800 married personal exemption is not applied.
- · Social Security tax rate of 9.75% used, effective from April 1, 2025.
- · Social security and educational insurance contributions are not deductible for income tax purposes.
- · The first 11,000 USD of income tax is modeled as a 0% bracket.
Frequently asked questions
How much income tax do I pay in Panama?
Panama has a progressive income tax system with three brackets. The first USD 11,000 of income is exempt from tax, income from USD 11,000 to USD 50,000 is taxed at 15%, and income above USD 50,000 is taxed at 25%. This means lower earners may pay no income tax at all, while higher earners face a maximum rate of 25%.
What is the Social Security tax rate in Panama?
As of April 1, 2025, employees in Panama pay a Social Security tax (CSS) of 9.75% on gross income. Additionally, there is an Educational Insurance Tax of 1.25% on gross income. These contributions are mandatory but are not deductible from your taxable income for income tax purposes.
Do I need to pay income tax on my first earnings in Panama?
No, the first USD 11,000 of your annual income is completely exempt from income tax in Panama. This personal exemption means that if you earn USD 11,000 or less in a year, you will owe zero income tax, though you will still be required to pay Social Security and Educational Insurance contributions.
What is my total tax burden if I earn USD 60,000 in Panama?
On USD 60,000 of income, you would owe USD 0 on the first USD 11,000, USD 5,850 (15% of USD 39,000) on income between USD 11,000 and USD 50,000, and USD 2,500 (25% of USD 10,000) on income above USD 50,000, for a total income tax of USD 8,350. You would also owe Social Security tax of USD 5,850 (9.75%) and Educational Insurance tax of USD 750 (1.25%), bringing your total tax burden to approximately USD 14,950.
Are there any regional or state income taxes in Panama?
Panama does not have regional or state income taxes; the national tax system applies uniformly throughout the country. Your tax liability depends only on your income level and the national brackets and contribution rates provided by the government.
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