Panama Tax Tables 2024 - Tax Rates and Thresholds in Panama

This page contains the tax table information used for the calculation of tax and payroll deductions in Panama in 2024. These tax tables are used for the tax and payroll calculators published on iCalculator™ PA, these tools are provided for your free use on our website. If you would like additional tax table information added to the tax calculators for Panama or would like to add to or suggest amendments to the information herein then please contact us.

Panama Personal Income Tax Tables in 2024

The Income tax rates and personal allowances in Panama are updated annually with new tax tables published for Resident and Non-resident taxpayers. The Tax tables below include the tax rates, thresholds and allowances included in the Panama Tax Calculator 2024.

In Panama, social security deductions made by employees are considered deductible expenses for the purpose of calculating taxable income. This means that the contributions employees make towards social security can reduce their gross taxable income, potentially lowering the amount of income tax owed. This deduction aligns with Panama's tax policies, designed to encourage participation in the social security system while providing a tax benefit to employees, thereby supporting their financial well-being.

Panama Social Security and Payroll Deduction Rates in 2024

In Panama, the social security system plays a crucial role in providing a safety net for employees, offering a range of benefits funded by contributions from both employers and employees. This comprehensive system aims to cover risks associated with healthcare, retirement, and occupational hazards, among others. Understanding the different types of social security and payroll deductions is essential for both employers and employees operating within Panama.

Healthcare and Medical Benefits

One of the core components of Panama's social security system is healthcare. Contributions fund medical and hospital services for employees and their dependents, ensuring access to public healthcare facilities. This includes preventive care, medical treatment, hospitalization, and in some cases, prescription drugs. The aim is to provide comprehensive healthcare coverage to safeguard the well-being of the workforce and their families.

Pension and Retirement Benefits

Pension contributions are another significant aspect of the social security system, designed to provide income to individuals upon reaching retirement age. These funds support a pension system that guarantees a source of income for retirees, based on the amount and duration of their contributions during their working life. This ensures financial stability and security for individuals in their retirement years.

Disability and Survivor Benefits

In the event of an employee becoming disabled and unable to work, the social security system provides disability benefits. These benefits offer financial support to individuals who have suffered a loss of income due to a disability. Similarly, survivor benefits are available to the dependents of a deceased worker, providing financial assistance to families in the face of loss.

Occupational Hazards and Work-related Injuries

Contributions towards occupational hazards protect employees in case of work-related injuries or diseases. This coverage includes medical care, rehabilitation services, and compensation for temporary or permanent disability resulting from occupational accidents or illnesses. It aims to ensure that employees are supported in case of injuries sustained in the course of their employment.

Unemployment Benefits

Although not as comprehensive as in some other countries, Panama offers limited unemployment benefits aimed at providing temporary financial assistance to workers who have lost their jobs under certain conditions. These benefits serve as a buffer, helping individuals to manage their finances while seeking new employment opportunities.

Educational Benefits

The social security system in Panama also encompasses educational benefits for the children of contributors. These benefits aim to support the educational development of beneficiaries, ensuring that children have access to schooling and educational materials. This investment in education contributes to the long-term development and prosperity of the country.

Panama's social security and payroll deduction system is designed to provide comprehensive coverage and support to the workforce, addressing various needs from healthcare and retirement to occupational hazards. By contributing to this system, employers and employees invest in a framework that enhances the social welfare and economic stability of the country.

Panama VAT Rates in 2024

VAT rates for Panama are reviewed annually, you can use the VAT Calculator to calculate VAT due in Panama or use the Reverse VAT Calculator to calculate the net cost of goods/services after deducting VAT.

Historic Tax Tables supported for Panama

The following tax tables are supported by iCalculator™ PA as part of the suite of free tax tools we provide for Panama.