Denmark Income Tax Calculator 2026
Calculate your Danish taxes: AM-bidrag + Bundskat + Kommuneskat + Topskat
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Effective rate: 0%
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8% (labor market contribution)
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Monthly: 0 DKK
Income Distribution
Effective total rate: 0%
Complete Guide to Danish Taxation
Denmark has one of the highest tax rates in the world, with marginal rates reaching up to 52%. In return, the country offers an exceptionally comprehensive social model with completely free healthcare and education, plus generous social benefits.
Among the highest taxes in the world
Denmark consistently ranks among OECD countries with the highest tax burden, but also among the happiest and most equal societies globally.
Components of Danish Income Tax
AM-bidrag (Labor Market Contribution)
8%
Deducted first from gross income, before any other taxes
Bundskat (Base Tax)
~12%
State tax applied to all income above the personal allowance
Kommuneskat (Municipal Tax)
~25%
Varies by municipality (22% to 27%), averaging around 25%
Topskat (Top Tax on High Earners)
15%
Only applies to income exceeding ~DKK 600,000 annually
Detailed Danish Tax Calculation
| Step | Description | Rate |
|---|---|---|
| 1. AM-bidrag | Deducted from total gross income | 8% |
| 2. Taxable base | Gross - AM-bidrag - Personfradrag (DKK 49,700) | - |
| 3. Bundskat | State base tax on taxable income | 12.09% |
| 4. Kommuneskat | Municipal tax + kirkeskat (if church member) | ~25% |
| 5. Topskat | If income > DKK 588,900 (2026 threshold) | 15% |
| Total max | Maximum marginal rate (capped by law) | ~52.07% |
Personfradrag (Personal Allowance)
2026 Allowance: DKK 49,700 per year (~EUR 6,700)
This personal allowance reduces the taxable base for bundskat and kommuneskat. It is automatically applied and cannot be transferred between spouses.
Key Tax Deductions
- Beskaftigelsesfradrag: Employment deduction (10.65% of salary, max ~DKK 45,100)
- Pendlerfradrag: Commuting costs deductible beyond 24 km one-way
- Rentefradrag: Mortgage interest deductible (tax value ~33%)
- Fagforeningskontingent: Union dues deductible up to DKK 6,000/year
- Ratepension: Private pension savings deductible up to DKK 63,100/year
- Aldersopsparing: Separate age-savings scheme with tax advantages
Free Public Services Funded by Taxes
100% Free Healthcare
Doctors, hospitals, emergencies at no cost
Free Education
From kindergarten to PhD
SU (Student Grant)
~DKK 6,400/month for students
Unemployment Benefits
Up to 90% of salary for 2 years
Parental Leave
52 weeks shared between parents
Public Pension
Universal Folkepension + ATP
The Danish Flexicurity Model
A unique balance in the world:
- Flexibility: Easy dismissal for employers (short notice periods)
- Security: Generous unemployment benefits (up to 90% of salary)
- Training: Government-funded retraining programs
- Result: One of Europe's lowest unemployment rates (~5%)
International Comparison
| Criteria | UK | Denmark |
|---|---|---|
| Top marginal rate | 45% | ~52% |
| Employee social contributions | ~12% (NI) | 8% (AM-bidrag) |
| VAT | 20% | 25% |
| Healthcare | NHS (taxes) | 100% free |
| University | Tuition fees (~GBP 9,250) | Free + monthly grant |
| Unemployment benefits | ~GBP 85/week | 90% of salary (2 yrs) |
| UN Happiness Index | 17th | 2nd worldwide |
Example: DKK 500,000 Salary
Denmark has one of the highest tax rates in the world but an exceptional standard of living. Compare with Northern European economies.