FAQ: Danish pensions
If you live in Sweden and work or have worked in Denmark, find answers to common questions about Danish pensions, including pension savings, payments and taxation.
Both Denmark and Sweden have 3 main types of pension:
- state pension
- labour market pension
- private pension savings
The Danish state pension is often lower than the Swedish equivalent, while private pension savings are more common in Denmark. In addition, not all Danish employers contribute to a labour market pension for their employees.
Many workplaces in Denmark have a pension scheme where both you and your employer contribute. It is common for your employer to pay 2/3 of the total pension contribution and for you to pay the remaining 1/3 from your gross salary.
Not all Danish employers offer a labour market pension. If your employer does not offer one, you can instead arrange an individual pension through your trade union, bank or a pension provider.
Your pension is paid by the country where you earned it. This means that Denmark pays the pension you earned while working there.
If you live in Sweden, apply for your Danish state pension through the Swedish Pensions Agency, Pensionsmyndigheten, preferably 6 months before you want to receive your first payment.
If you have a Danish labour market pension, contact your Danish pension fund or pension provider directly to apply for your pension and inform them that you live in Sweden.
Your Danish state pension remains in Denmark until you reach state pension age. You can leave your labour market pension with your Danish pension provider until you retire.
In some cases, you can have your pension savings paid out early. This is generally subject to a 60% charge, although different rules apply to pension schemes under Section 53A. Contact your Danish pension provider to find out what applies to your pension scheme.
You normally cannot transfer your Danish pension savings to a Swedish pension scheme, as this is considered an early withdrawal of your Danish pension savings.
The return on your pension savings in Denmark is taxed at 15.3%. This is known as pension yield tax, PAL tax, and is deducted while you have pension savings in Denmark.
In Denmark, the return on your pension savings is taxed at 15.3%. This is known as pension yield tax, PAL tax, and is deducted from your Danish pension savings.
If you live in Sweden, you may also have to pay Swedish yield tax, depending on the type of Danish pension scheme you have.
If your pension savings are held in a life or endowment insurance policy, you may need to calculate and report the tax base for Swedish yield tax in your Swedish income tax return. If you have paid Danish PAL tax, you may be entitled to foreign tax relief in Sweden.
Danish labour market pension savings that are not held in a life or endowment insurance policy are not subject to Swedish yield tax.
If you have a private pension savings plan with a Danish bank or credit institution, you must declare any ongoing capital income from the savings, such as interest, dividends or capital gains. You can request foreign tax relief for Danish PAL tax paid.
Read about yield tax on foreign life insurance at skatteverket.se
Read about Danish pension tax when leaving Denmark at skat.dk
If you live in Sweden and receive pension income from Denmark, the main rule is that your pension is taxed in both Denmark and Sweden. To avoid double taxation, you can receive credit in Sweden for the tax you have paid in Denmark, up to the applicable Swedish limit.
Some types of Danish pension income are not taxable in Sweden. These include:
- pensions under Section 53A
- pension savings held in a life insurance policy taken out before 1997
- payments from a private pension savings plan with a Danish bank or credit institution
Danish state pension is exempt from tax in Sweden if you lived in Sweden on 4 April 2008, received this type of pension from another Nordic country on that date and have lived continuously in Sweden since then.
Even if your Danish pension is not taxable in Sweden, you must still report it in your Swedish tax return. Tick the Pension box and enter the country and amount under Section 17, Other information.
The tax deduction depends on the type of pension scheme.
For pension paid in instalments, ratepension, you can deduct contributions of up to 68,700 DKK per year (2026). This limit includes contributions made by both you and your employer.
Contributions to a lifelong annuity, livsvarig livrente, are deductible, but the deduction rules depend on how much you contribute and whether the contributions are made by you or your employer.
Contributions to retirement savings paid as a lump sum, alderspension, are not tax-deductible.
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