Moving to Denmark is an exciting step,  whether you’re starting a new job, studying, or building a fresh life in Scandinavia. But once the excitement settles, one of the most important things to understand is how taxes work.

Denmark is famous for its high taxes, but also for what those taxes provide: world-class healthcare, excellent education, and strong social security. The system can look complex from the outside, yet it’s highly transparent and digital,  which makes it easier to manage once you know the basics.

This guide explains everything you need to know about taxes in Denmark in 2026, including how residency affects your taxes, current rates, deductions, and how to file online through this link!

The Basics of the Danish Tax System

Denmark’s tax system funds nearly all public services, so everyone who earns income contributes.

The tax year follows the calendar year and most individuals must confirm their tax return by May 1, 2027.

The main types of personal taxes in Denmark:

• Income tax: Paid on salaries, self-employment, and other income.

• Labor Market Contribution (AM-bidrag): A mandatory 8% paid before income tax.

• Municipal tax: A local tax that varies slightly depending on where you live (around 24–25%).

• State tax: A progressive national tax based on income level.

• Church tax: Optional (~0.7%) if you’re registered with the Danish Church.

All of these are coordinated automatically through the Danish Tax Agency (Skattestyrelsen), so most residents don’t have to calculate or submit much manually.

Who Has to Pay Taxes in Denmark

Whether you pay taxes in Denmark, depends on your residency status.

You are considered a tax resident if you:

• Stay in Denmark for more than six consecutive months, or

• Have a permanent home or your main financial interests in Denmark.

Residents vs. Non-residents

• Residents pay tax on their worldwide income (both Danish and foreign).

• Non-residents pay tax only on income earned in Denmark (such as a local job or rental income).

Income Tax Rates in Denmark for 2026

Denmark has one of the most progressive tax systems in Europe,  the more you earn, the higher the rate.

Breakdown of income tax components for 2026

Effective tax rate:
Most employees pay between 37% and 42%, while high earners can reach around 55% in total taxes.

Good to know:
Although Denmark’s tax rates are high, they include benefits like free healthcare, education, and unemployment insurance, meaning fewer private costs overall.

How Danish Income Tax Is Calculated

It can seem complicated, but the system follows a logical order:

1. Start with your gross income (salary, bonuses, self-employment income).

2. Subtract the 8% Labor Market Contribution (AM-bidrag).

3. The remaining amount is your taxable income.

4. Your municipal and state taxes are calculated based on that amount.

The good news: this is all done automatically. Employers report your salary and deductions directly to Skattestyrelsen every month. Your online profile at Skat.dk is automatically updated,  making it one of the easiest systems in Europe for individuals.

Common Deductions and Allowances

While the tax rates might seem high, Denmark offers a range of deductions to reduce your taxable income. These are often applied automatically but can also be updated manually in your online tax return.

The most common deductions include:

• Personal allowance (Grundbeløb): Around DKK 49,700 in 2026.

• Employment deduction (Beskæftigelsesfradrag): A percentage of your work income, capped at around DKK 45,000.

• Commuting deduction (Kørselsfradrag): For daily travel exceeding 24 km round trip.

• Union and unemployment fund fees: Fully deductible.

• Interest on loans or mortgages: Deductible within limits.

• Pension contributions: Often deductible depending on the plan.

• Charitable donations: Deductible up to around DKK 18,600.

Example:
If you commute 40 km each day and pay DKK 20,000 into a pension scheme, both can reduce your taxable income, potentially saving you thousands of kroner each year.

Double Taxation: Working in Denmark and Abroad

If you earn income in another country while living in Denmark, you don’t have to pay tax twice. Denmark has double taxation treaties with over 80 countries, including the US, UK, Canada, and most of the EU.

These agreements determine which country taxes your income and whether you can get a foreign tax credit or exemption in Denmark.

Tip:
If you’re paid by a foreign employer or run a remote business, always confirm where your income is taxable before filing, especially if you split your time between countries.

You can find official guidance and treaty lists on skat.dk.

How to File Taxes in Denmark

One of the easiest parts of living in Denmark is that most tax work happens automatically, thanks to digital reporting.

Step 1: Register and get your CPR and tax card

Once you move to Denmark, you’ll need a CPR number (Civil Registration Number) and a tax card (skattekort). Your employer uses this to calculate how much tax to withhold from your salary each month.

Step 2: Review your annual tax statement

Every March, you’ll receive a pre-filled annual tax statement (årsopgørelse) on skat.dk. It shows your total income, deductions, and what’s been withheld.

Step 3: Correct or confirm

If the information is correct, you simply confirm it,  no further action required. If you have extra deductions or foreign income, you can make changes directly in the system.

Step 4: Pay or get a refund

• If you owe additional tax, you usually pay by July 1.

• If you’ve overpaid, your refund is automatically transferred to your bank account within a few weeks.

For freelancers or self-employed individuals, you’ll file through E-tax for Business (TastSelv Erhverv), which covers both income and VAT reporting.

Quick Tax Checklist for Expats in Denmark 2026

• Register for a CPR number and tax card upon arrival.

• Review your income and deductions online in March 2027.

• Confirm or correct your annual statement before May 1, 2027.

• Keep documentation for commuting, pension, and donations.

• Check for double taxation relief if you earn money abroad.

• Pay or confirm refunds by July 2027.

Final Tips for Expats Living in Denmark

• Use the digital tools: Denmark’s online system (skat.dk) is intuitive and available in English.

• Stay proactive: Update your expected income mid-year if your job changes, it keeps your tax balance accurate.

• Keep records: Even though much is automated, hold onto receipts and proofs for deductions.

• Ask for help: The Danish Tax Agency offers English-language assistance, and local accountants (revisorer) are used to helping expats.

• Remember the benefits: While taxes are high, they cover services that many expats find invaluable, from healthcare and childcare to security and community programs.

Once you’ve settled into the system, filing taxes in Denmark is remarkably smooth. Everything is linked through your CPR number and handled online,  freeing you to focus on enjoying life in one of the world’s most livable countries.