Danish income tax: a short introduction

 

How your income is taxed

If you work in Denmark, you normally pay tax on your salary there, regardless of where your employer is based. Other income is generally taxed in the country where you live.

All income from employment or self-employment is subject to an 8% labour market contribution, arbejdsmarkedsbidrag. In addition, you may pay municipal tax and state tax.

Arbejdsmarkedsbidrag (AM-bidrag) – labour market contribution

All employees in Denmark pay an 8% labour market contribution, arbejdsmarkedsbidrag (AM-bidrag). It is deducted from your gross income before your municipal and state income tax is calculated.

Municipal tax

Municipal tax makes up the largest part of your income tax. If you live in Sweden and work in Denmark, the municipal tax rate is 25%.

State tax

State tax in Denmark is progressive. This means that the amount of state tax you pay depends on your income. The different levels of state tax are:

• bottom bracket tax, bundskat
• middle bracket tax, mellemskat
• top tax, topskat and
• extra top tax, toptopskat

See the current levels of Danish state tax at skat.dk

Danish tax deductions

You pay tax on your income after your tax deductions have been applied. The tax deductions you are entitled to depend on whether you have full tax liability, limited tax liability or are taxed under the cross-border rule.

As a cross-border commuter, you may be taxed under either limited tax liability or the cross-border rule.

See our page about deductions for limited tax liability

See our page about deductions under the cross-border rule

Managing your tax in TastSelv

You can use Skattestyrelsen's self-service system, TastSelv, to manage your Danish tax online. For example, you can update your tax information if your income changes during the year.

To access TastSelv, you need a MitID or a TastSelv code.

Go to TastSelv

Get a MitID on mitid.dk

Get a Tast-selv-kode at skat.dk