How to calculate taxes in Denmark?

Tax rate (traekprocent) for a physical person in Denmark varies from 35% to 52% depending on income and tax deductions.

Tax rate (traekprocent) consists of:

  • Bundskat (11,13% in 2018) – lower tax rate, applies to all taxpayers
  • Kommuneskat (average 24,9% in 2018) – municipal tax rate, depends on the municipality (kommune) you live in
  • Kirkeskat (average 0,7% in 2018) – church tax, only applicable to the church members
  •  Topskat (15% in 2018 on the part of income larger than DKK 498,900) – top tax rate

Tax calculation

Tax calculation in Denmark is not simple. You can not just multiply the tax rate to your income before tax to see how much you will need to pay taxes.

In order to calculate your income after taxes you will need the following numbers from your Forskudsopgørelse (preliminary tax report):

  • Tax rate (trᴂkprocent)
  • Tax-free amount (skattefrit fradrag).

How to calculate an income after taxes.

Here is the formula for calculating income after taxes.

In this example: 

Income before taxes 24,000 DKK

Tax rate 37%

Tax-free amount per month: 5,000 DKK

  1. AM-bidrag (labour market contribution) is 8% from your income before tax: 24,000 * 8% = 1920 DKK;
  2.   Amount from which you pay your main tax (A-skat) is your income before tax minus AM-bidrag minus tax-free amount: 24,000 – 1,920 -5,000 = 17,080 DKK;
  3.  A-skat: 37 % (your tax rate) multiplied by 17,080 DKK = 6,320 DKK;
  4. Total taxes (AM-bidrag plus A-skat): 1,920 DKK + 6,320 DKK = 8,240 DKK.

Income after taxes: (income before tax – total taxes): 24,000 DKK – 8,240 DKK = 15,760 DKK

Here is the link to Skat’s calculator of your salary after taxes: https://skat.dk/skat.aspx?oid=2244967 

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ElenaKabatchenko

Founder of Finance Guide Denmark – helping internationals in Denmark with the financial side of their integration

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