Employment income

The ordinary tax scheme is what the vast majority of taxpayers in Denmark are taxed under. It is a progressive tax system with a progressive tax rate on employment income and some benefits from 8% to approximately 56% tax. Note that new tax rates will be introduced as of 1 January 2026 introducing a top tax on income above DKK 2.5 Mio. (2023-level). The marginal tax will change to 60.5%.

Denmark generally has the following different income types:

Personal income

• E.g., salary, employee benefits, and business income

Capital income

• E.g., interest income/deductions, most fonds, and taxable property sale

Share income

• E.g., shares sales, share dividends, and some share based fonds

In addition to the above, Denmark has a separate scheme relating to property value tax and a special tax scheme for employment income (further on this below).

Most personal income is subject to AM-tax of 8%. This tax is deducted from the income before the other taxes are calculated. The income tax rates are progressive and are comprised of state, municipality, and potentially church taxes. The lowest tax rate is approx. 36% and goes up to approx. 52% excluding church tax (which depends on the municipality).

Personal income of DKK 500,000 will isolated be subject to a tax rate of approx. 36% (2025).

Personal income of DKK 1,000,000 will isolated be subject to a tax rate of approx. 44% (2025).

Capital income however has a marginal tax rate of 42%.

Share income is taxed at 27% up to a yearly regulated threshold and at 42% for income above the threshold.

Yes, you are entitled to an annual Danish personal allowance of DKK 49,700 (2024 numbers). The personal allowance is applicable in the ordinary Danish tax scheme.

You will generally be able to transfer the allowance as a married couple if your spouse does not utilize it.

The most common tax deductions for an individual subject to Danish taxation are:

• Pension
• Commuting between home and work
• Unemployment insurance and union membership fees
• Interest expenses (e.g., relating to a mortgage)
• Charitable contributions
• Work related travel deduction

If you receive a bonus after moving to Denmark, but it is related to your previous work performed abroad, the bonus will generally be taxed in Denmark, unless you can prove that you earned the final right to the bonus before moving to Denmark, and before you became subject to tax in Denmark on your global income.

If both Denmark and the source country tax the bonus, there will be a situation of double taxation. In this regard you will generally be able to receive a tax relief in Denmark. The relief will be depending on the double tax treaty between Denmark and the other country.

The Danish special tax scheme is a tax system with an effective flat tax rate of 32.84%.

The tax scheme will apply to cash-based payments from your employer as well as e.g. company-provided phone and company car. Please note that other non-cash benefits are not covered by the tax scheme.

You can be covered by the Danish special tax scheme for up to 7 years, under the assumption that all criteria are still met.

• You need to be employed with a Danish company.
• You must be employed by the Danish employer within a month after becoming tax resident in Denmark.
• You cannot have been liable to tax in Denmark in the past 10 years prior to the commencement of your Danish employment (some income types taxable in Denmark within the past 10 years can however be exempted).
• You need to have a guaranteed yearly salary that exceeds a certain minimum threshold. For 2024 the minimum threshold is DKK 75,100 per month after deduction of ATP (DKK 99). Variable pay elements e.g., bonus or other non-guaranteed remuneration cannot be considered.
• Based on experience the salary threshold will increase every year with approximately DKK 2,000 – DKK 3,000 (on a monthly salary).
• You may also qualify without the salary requirement if you are a researcher or scientist in a qualified researcher’s position (subject to approval from the Danish Research Counsel).