How Is Salary Calculated and Paid in Denmark?
If you are employed in Denmark, your salary is typically taxed at source.
This means your employer calculates the taxes and contributions you owe, taking into account any allowances and credits to which you
are entitled.
As a result, the amount you receive at the end of each month is your net pay, after taxes.
Anyone liable to taxation in Denmark must obtain a tax card from the
Danish Tax Agency.
This card is where you provide all the necessary information for calculating your tax burden, as well as any allowances and credits.
In March of each year, you will receive a tax assessment notice (Årsopgørelsen) that lists your income, taxes, deductions, and
allowances for the past tax year.
It's important to review this assessment and inform the Danish Tax Agency of any discrepancies.
If you overpaid on taxes, you are eligible for a refund.
Conversely, if you paid too little, you'll need to settle the outstanding amount with the tax authorities.
Deductions and Allowances Used in This Tax Calculator
Our calculator also factors in the common tax deductions and allowances available to Danish taxpayers.
We cannot cover all of them, since they can vary significantly from person to person, but we have included the main ones.
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Personal allowance: This is a portion of your gross income that is not subject to taxes.
It stands at 51,600 kr. per year in 2025 (slightly lower if you are under 18 years of age).
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Employment allowance: A deduction from your taxable income if you are employed or earning
a business profit.
In 2025, it is set at 12.30% of your income, but has an annual cap of 55,600 kr.
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Job allowance: This allowance is similar to the employment allowance, but it is only applied when
you earn over a certain amount.
It is currently set at 4.5%, but there is a cap at 2,900 kr. per year.