Denmark Income Tax Guide

Everything you need to know about Danish income tax (2026)

Income Tax Basics

Denmark has a progressive tax system with some of the highest tax rates in the world. However, the tax revenue funds an extensive welfare system including free healthcare, education, and generous social benefits. Most employees have taxes automatically deducted from their salary (A-skat) by their employer.

Who Needs to Pay Income Tax?

Everyone who works in Denmark is subject to income tax. The tax is calculated on your gross income after the ATP pension contribution. The system is designed so that your employer handles most of the tax withholding automatically.

The Danish Tax Year

The Danish tax year runs from January 1 to December 31 (kalenderår). If your circumstances change during the year (e.g., you move, get married, or change jobs), you should report these changes to SKAT (the Danish tax authority). You can file an annual tax return to claim back any overpaid tax.

National Income Tax Brackets

Denmark has a progressive tax system with four national income tax brackets. In 2026, a major tax reform replaced the old two-bracket system with a new four-tier system (bundskat, mellemskat, topskat, and top-topskat). The thresholds are calculated on income after AM-bidrag (labour market contribution).

Tax Type	Income Above (after AM-bidrag)	Tax Rate
Bottom Tax (Bundskat)	Above kr. 54,100	12.01%
Middle Tax (Mellemskat)	Above kr. 641,200	7.5%
Top Tax (Topskat)	Above kr. 777,900	7.5%
Top Top Tax (Toptopskat)	Above kr. 2,592,700	5%

Real-World Examples

400,000 DKK

Bottom Tax: ~kr. 41,600
State Tax: ~kr. 41,600

700,000 DKK

Bottom Tax: ~kr. 41,600
Middle Tax: ~kr. 4,410
State Tax: ~kr. 46,010

900,000 DKK

Bottom Tax: ~kr. 41,600
Middle Tax: ~kr. 19,410
Top Tax: ~kr. 916
State Tax: ~kr. 61,926

Important: These calculations include national taxes only. They don't include municipal tax, labour market contribution (AM-bidrag), or church tax. Use our Danish Tax Calculator to see your complete take-home pay.

Municipal Tax (Kommuneskat)

In addition to national taxes, you pay a municipal tax (kommuneskat) to your local municipality. This tax funds local services like schools, elderly care, and public transportation.

2026 Municipal Tax Rates

• Average rate: Approximately 25%
• Range: Approximately 22% - 27% depending on municipality
• Copenhagen: Approximately 23.8%
• Aarhus: Approximately 24.5%

The municipal tax is calculated on your total income (before national taxes). It's deducted automatically by your employer along with your national tax.

ATP Pension (Labour Market Pension)

ATP (Arbejdsmarkedets Tillægspension) is a mandatory pension scheme that provides supplementary retirement benefits. Almost all employees in Denmark are required to contribute to ATP.

2026 ATP Contributions (Private Sector)

For full-time employees (117+ hours/month):

• Employee's share (1/3): 99 DKK per month (1,188 DKK per year)
• Employer's share (2/3): 198 DKK per month (2,376 DKK per year)
• Total contribution: 297 DKK per month (3,564 DKK per year)

How ATP Works

• Contributions are automatically deducted from your salary
• The contribution is split between employee and employer
• ATP provides a guaranteed supplement to your folkepension (state pension)
• Benefits are calculated based on your contribution period

Note: ATP contributions are deducted from your gross salary before calculating income tax. This makes ATP a tax-advantaged retirement savings vehicle.

Labour Market Contribution (AM-Bidrag)

The AM-bidrag (Arbejdsmarkedsbidrag) is a labour market contribution that funds various social programs including unemployment benefits, sickness benefits, and vocational training.

2026 AM-Bidrag Rate

• Rate: 8% of gross income
• No upper limit: Applied to all income
• Deducted before tax: Reduces your taxable income

What AM-Bidrag Funds

• Unemployment benefits (dagpenge): Support when between jobs
• Sickness benefits (sygedagpenge): Income during illness
• Maternity benefits (svangerskabsdagpenge): Support during pregnancy
• Vocational training: Education and retraining programs

Important: AM-bidrag is deducted from your gross salary before calculating income tax. This means it effectively reduces both your taxable income and your total tax burden.

Church Tax (Kirkeskat)

Church tax (kirkeskat) is a voluntary tax paid by members of the Danish National Church (Folkekirken). If you're baptized and confirmed in the Church, you're automatically a member and will be charged church tax unless you formally resign.

2026 Church Tax Rates

• Average rate: Approximately 0.64%
• Varies by parish: Typically 0.4% - 1% depending on municipality
• Membership: Approximately 74% of Danes are members
• Optional: You can resign from the Church at any time

How to Opt Out

If you don't wish to pay church tax, you can resign from the Danish National Church:

• Online: Through the Danish Church's website (folkekirken.dk)
• In person: At your local parish office
• Written notice: Send a letter to your parish

Note: Resigning from the Church means you won't receive certain services like baptism, confirmation, wedding ceremonies, and funeral services from the Church. However, you can rejoin at any time.

Calculate Your Danish Take-Home Pay

Now you understand how Danish income tax works, use our calculator to see exactly how much you'll take home based on your salary and municipality.

Try the Danish Tax Calculator

The information on this page is for general guidance only. Tax rules can change, and individual circumstances vary. For personalized tax advice, please consult a qualified tax professional or visit the official SKAT website.