Panama Employment Settlement Calculator
When an employment relationship ends in Panama, the settlement brings together the seniority premium, pending vacation, proportional thirteenth month, unpaid salary and, depending on the case, notice and severance. This calculator estimates each item in dollars from your monthly salary, seniority, and pending days or weeks, giving you a clear reference figure when negotiating your exit.
With a salary of $1,600, 3 years and 4 months of seniority, 7 pending vacation days, and 4 months of thirteenth month:
- Seniority premium: $1,230.77 (one week of salary per year)
- Pending vacation: $373.33
- Proportional thirteenth month: $533.33
- Estimated total settlement: $2,137.44
The seniority premium equals one week of salary per year worked: it grows directly with years of service.
Formula
Seniority premium = weekly salary × (years + months/12)
Vacation = daily salary × pending days Thirteenth month = monthly salary × (period months ÷ 12) Unpaid salary = daily salary × unpaid days Notice / severance = days or weeks you enter
The Panamanian seniority premium equals one week of salary per year of service (prorated by months). Severance for unjustified dismissal can reach 3.4 weeks per year, and notice varies by seniority; both are editable fields to simulate your case.
Step-by-step example (default values)
- Daily salary = 1,600 ÷ 30 = $53.33; weekly salary = 1,600 ÷ 4.3333 = $369.23
- Seniority = 3 years 4 months = 3.33 years
- Seniority premium = 369.23 × 3.33 = $1,230.77
- Vacation = 53.33 × 7 = $373.33; thirteenth = 1,600 × 4/12 = $533.33
- Total = 1,230.77 + 373.33 + 533.33 = $2,137.44
Scenario table (same engine logic)
| Seniority | Seniority premium | Vacation | 13th month | Total estimate |
|---|---|---|---|---|
| 2 years | $738.46 | $373.33 | $533.33 | $1,645.13 |
| 3y 4m | $1,230.77 | $373.33 | $533.33 | $2,137.44 |
| 5 years | $1,846.15 | $373.33 | $533.33 | $2,752.82 |
| 8 years | $2,953.85 | $373.33 | $533.33 | $3,860.51 |
Reading the result
The seniority premium is the core of the Panamanian settlement: one week of salary per year of service, with no cap in the calculator, so long seniority produces large amounts (almost $2,954 at 8 years). Vacation and the proportional thirteenth month add up from what is pending; unpaid salary covers worked days not yet paid.
If the exit is an unjustified dismissal, add the severance weeks (reference: up to 3.4 weeks per year depending on seniority) and the unworked notice. Because Panamanian law changes with seniority and termination type, the calculator lets you adjust both to compare scenarios before negotiating.
This tool is an educational estimate, not an official calculation or legal advice. Notice and severance amounts depend on the termination type, seniority, and current Labor Code rules. Validate your case with MITRADEL, your payroll, or a labor lawyer before signing agreements.
FAQ
Seniority premium, pending vacation, proportional thirteenth month, unpaid salary, and notice and severance if you add them. With the default values: $2,137.44.
As one week of salary per year of service, prorated by months. At $1,600 and 3.33 years: $369.23 × 3.33 = $1,230.77.
It depends on seniority and termination type (reference: up to 3.4 weeks per year for unjustified dismissal). Enter the weeks in the severance field to simulate the amount.
If it was not worked, it is paid as salary for the notice days the law requires by seniority. The notice field lets you add it to the total.
Yes, as a reference. On resignation, the seniority premium and proportional items apply as applicable; dismissal severance does not. Adjust the fields to your situation.
Related calculators
- Panama thirteenth month: estimate each installment of the April, August, and December bonus
- Panama net salary: take-home pay after CSS, educational insurance, and ISR