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By means of Executive Decree No. 13 of December 31, 2025, issued by the Ministry of Labor and Labor Development, published in the Official Gazette on January 6, 2026, new minimum-wage rates have been established to govern for the next two years throughout the national territory. These provisions shall become effective as of January 16, 2026.
In Panama, minimum-wage rates are determined on an hourly basis, following previously-evaluated economic and social criteria. The wage structure established in the Decree takes into consideration differentiating factors such as
- The principal economic activity of the company according to its Notice of Operations;
- The geographic region in which the activity is carried out; and
- The size or scale of the company pursuant to the parameters established under labor regulations.
This methodology allows the establishment of differential wage rates that reflect the particular characteristics of each productive sector and the socioeconomic conditions of the different regions of the country, thereby ensuring a more accurate application consistent with the national labor and economic reality.
For purposes of applying the minimum wage, the regions into which the national territory has been divided are comprised of the following:
Region 1:
Panamá, Colón, San Miguelito, David, Santiago, Chitré, Aguadulce, Penonomé, Bocas del Toro, La Chorrera, Arraiján, Capira, Chamé, Antón, Natá, Las Tablas, Bugaba, Boquete, Taboga, San Carlos, Chepo, Guararé, Los Santos, Pedasí, Dolega, San Félix, Barú, Boquerón, Portobelo, Donoso, Santa Isabel, Santa María, Parita, Pesé, Atalaya, Changuinola, Chiriquí Grande, Almirante, Tierras Altas, Omar Torrijos Herrera.
Region 2: comprised of the remaining districts of the country.
The minimum-wage rates for region 1 are higher considering the higher cost of living in the districts that form part of this region, as compared to region 2. If the same company has worksites or carries out economic activities in both regions, it must pay its workers the minimum-wage rates corresponding to the region in which they ordinarily render their services.
The rate for domestic workers had a sleight increase of B/. 10.00 in region 1 and B/. 5.00 in region 2, as follows:
- Region 1: B/. 350.00
- Region 2: B/. 320.00
The increase and payment remain as a fixed monthly amount.
It is important to know that the minimum wage constitutes the minimum amount of money that the employer must pay to the worker, set per unit of time, according to the applicable region, economic activity, or occupation. The monthly salary that each worker must receive will depend on the number of weekly hours agreed upon in the employment contract.
This does not constitute a general salary increase. The increase applies only to those workers who currently earn the minimum wage or whose current rate, as a result of the increase, falls below the new minimum-wage rate.
For further information, you may contact our Labor & Employment Law Department team at [email protected].