What is the décimo tercer mes in Panama?
The décimo tercer mes is a mandatory 13th-month payment equal to one month's salary, paid in three equal instalments on 15 April, 15 August and 15 December.
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Detailed Explanation
## What it is
Panamanian labour law requires employers to pay a 13th-month bonus, the décimo tercer mes. It equals one month's salary and is paid in three equal instalments during the year. It is a statutory entitlement and applies to employees.
## The three dates
The instalment on 15 April covers mid-December to mid-April. The instalment on 15 August covers mid-April to mid-August. The instalment on 15 December covers mid-August to mid-December.
## Not a Christmas bonus
It is not a discretionary Christmas bonus. Paying one amount at Christmas instead of three instalments does not meet the requirement.
## Planning for it
Because the payments land three times a year, put them in the cash-flow forecast. Accrue one twelfth of annual salary each month so that monthly profit shows the real cost of staff.
## What Finn does
Finn adds the three dates to your calendar, accrues the cost if you ask it to, and includes the payment in employer cost estimates. The dates and the amount come from Panamanian labour law, and you pay through payroll.
Source: https://dgi.mef.gob.pa/
Real-World Examples
Employee on US$1,800 a month
The employee receives three instalments of US$600 a year, on 15 April, 15 August and 15 December.
Mid-year hire
A business hires someone in June. It asks an adviser to confirm the amount due for the part period before the August payment.
Cash-flow squeeze
A company with thin cash in April and August adds the payments to its forecast so they do not arrive as a surprise.
Common Mistakes to Avoid
- Treating the payment as optional or seasonal
- Paying one lump sum at Christmas
- Not budgeting for April and August
- Confusing it with a discretionary bonus
Frequently Asked Questions
How much is the décimo tercer mes?
One month's salary a year.
When is it paid?
In three equal instalments on 15 April, 15 August and 15 December.
Is it optional?
No. It is a statutory entitlement.
Does it apply to all employees?
It applies to employees. Confirm edge cases with an adviser or the Ministry of Labour.
Is it the same as a Christmas bonus?
No. A discretionary bonus is separate.
Practical Tips
- Accrue the cost monthly
- Put the three dates in the forecast
- Keep payment records with payroll files
- Confirm part-year cases with an adviser
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