4. How Much Tax Do You Need to Pay

Denmark has a progressive tax system. Taxation is higher on higher incomes.

 

The different levels of income indicate how much tax must be paid. At the lowest level, there is a personal allowance. This means that tax does not have to be paid below your personal allowance limit. However, labour market contributions must always be paid. This means you must always pay a minimum of 8% tax on your income.

 

The mid-income level is the level of tax the majority must pay. Taxpayers in this group must pay basic tax, municipal tax and health insurance. At the same time, they receive an automatic employee deduction. The labour market contributions are deducted from your income.

 

When you exceed the upper limit, you must pay the top tax rate. It is important to note that there is a maximum amount you should pay. This is based on the last crown earned.

 

From the information discussed above, you can see how it can be difficult to determine what you must pay in tax. We have made three calculations for what you should pay, depending on your income. Municipal tax varies between municipalities. For these calculations, we used an average municipal tax rate. The calculations are based on an unmarried person, who is a member of the church and has no other deductions from their taxable income.

 

2019 Rates

 

Income. DKK

Tax, DKK

Tax pct.

100 000

22 403

22.4%

300 000

102 156

34.1%

500 000

185 851

37.2%

799 199*

346 933

43.4%

1 000 000

460 409

46.0%

 

*Note: If you meet all the criteria for the Expat Scheme with a minimum salary of 799 200 DKK this tax rate will drop to 32.8%. Hence, you would only pay 262 457 DKK in tax.

 

**SkatteInform does not take any responsibility for any actions taken based on the information provided in this article, before receiving individual tax advice.