In Denmark, taxes pay for the Danish welfare system, including child care, education, elderly care and access to doctors and hospitals.
Tax can be paid in several ways. When you are employed in Denmark, it is important that you find out which tax scheme you will be covered by.
You must consider whether you:
Will be subject to full tax obligations or limited tax obligations in Denmark, e.g. if you commute over national borders and maintain residence in a foreign country.
Are covered by the special 26% scheme for foreign researchers and key employees, or the standard income tax scheme.
Income tax in Denmark consists of:
- national tax
- municipal tax
- health care contributions
If you are a member of the Evangelical Lutheran Church in Denmark, you must also pay church tax.
Social security contributions
Social security contributions consist of an 8% labour market contribution paid on wages and benefits. The labour market contribution is not optional, and must be paid regardless of your other tax obligations.
A tax ceiling ensures that the total income tax does not exceed 51,5% of your income. Church tax and labour market contributions are not included in this tax ceiling.
Get more info about tax rules in Denmark here (in English)