-
10 Things You Need to Know about Tax in Denmark
- 1. When do You Become Taxable in Denmark
- 2. How to Register in the Danish Tax System
- 3. What is Included in Your Taxable Income
- 4. How Much Tax Do You Need to Pay
- 5. Social Security Network for Work within the EU
- 6. Does Your Company Need Foreign Workers
- 7. Company or Self-Employed
- 8. How to Pay Salary to Yourself as a Major Shareholder
- 9. Securities and Other Activities Abroad
- 10. How to Avoid Double Taxation
- Starting a Business
- Does Your Company Need Foreign Workers?
- COVID 19 - THE DANISH TAX AUTHORITY OFFERS AID PACKAGES FOR YOU AND YOUR BUSINESS
- Larger deductions for companies that need to invest in fixed assets or small assets
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.
2024 Rates
|
Income. DKK |
Tax, DKK |
Tax pct. |
|
100 000 |
21 020 |
21% |
|
300 000 |
99.218 |
33% |
|
500 000 |
180 155 |
36% |
|
889 200* |
358 412 |
40% |
|
1 000 000 |
440 355 |
44% |
*Note: If you meet all the criteria for the Expat Scheme with a minimum salary of DKK 889 200 this tax rate will drop to 32.8%. Hence, you would only pay DKK 274 280 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.