Décimo (13th month) in Panama: how it's calculated and paid
The décimo tercer mes is one of Panama's best-known labor obligations. It equals one month's salary per year, paid in three installments. Here's how it's calculated, when it's paid and what is deducted.
When is the décimo paid?
The décimo is paid in three equal installments on these dates:
- 15 April
- 15 August
- 15 December
How is it calculated?
Each installment equals the average salary of its period divided by 12. For a fixed salary, each installment equals one month's salary divided by 3, and the annual total equals one month's salary.
Example: with a $1,000 salary, each gross installment is $333.33 and the annual décimo total is $1,000.
How is the proportional décimo calculated?
If you didn't work the full year —because you were hired mid-period or your contract ended— you get the proportional décimo: the portion accrued for the time actually worked. You accrue 1/12 of everything earned, so the formula is:
Gross proportional décimo = monthly salary × months worked ÷ 12
Example: with a $1,000 salary and 6 months worked, the gross proportional décimo is 1,000 × 6 ÷ 12 = $500. After the 7.25% CSS deduction ($36.25), the net is $463.75.
In a severance, the proportional décimo covers from the last installment paid (Apr 15, Aug 15 or Dec 15) to your last working day. Compute it instantly with the proportional décimo calculator.
What is deducted from the décimo?
The décimo carries special CSS rates, different from regular salary: 7.25% employee and 10.75% employer. Education tax does not apply.
| Item | Rate |
|---|---|
| Employee CSS (on décimo) | 7.25% |
| Employer CSS (on décimo) | 10.75% |
Calculate your décimo
Use our free décimo calculator to see the gross, the CSS deduction and the net instantly.
Source: Decreto 19/1973 and Ley 51/2005 (consolidated text). This guide is for reference; always confirm with your accountant.