Personal Income Tax in Denmark in 2026: Rates, Deductions and Rules
Comprehensive guide to Danish personal taxation: progressive rates up to 60.5%, deductions, AM-bidrag, and 2026 tax reform changes for residents and expats.
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Get started free2026 Tax Reform: Major Changes
New Tax Brackets Replace Old Top Tax
The old 15% top tax is split into three brackets: middle tax (7.5%), top tax (7.5%), and top-top tax (5%). This reduces taxes for most high earners while increasing them for the highest income group.
Increased Thresholds (4.8% Adjustment)
All tax thresholds and deductions increased by 4.8% following wage growth indexation, providing tax relief for most income levels.
Expat Scheme Now More Accessible
Minimum salary requirement reduced from 78,000 DKK to 65,400 DKK per month, allowing significantly more foreign workers to qualify for the flat 32.84% rate.
Higher Employment Deduction
Maximum employment deduction increased to 63,300 DKK (from 55,600 DKK), saving approximately 2,000 DKK in taxes annually for full-time workers.
Who Benefits Most?
Middle-income earners
Around 300,000 Danes earning between 35,000–80,000 DKK/month (420,000–960,000 DKK/year) will see the largest tax reductions, saving up to 14,700 DKK annually. Those earning above 2.8 million DKK will face higher marginal rates.
Tax Rates and Structure for 2026
| Tax Component | Rate | Applied To |
|---|---|---|
| Labour Market Tax (AM-bidrag) | 8% | Gross personal income (deducted first) |
| Bottom Tax (bundskat) | 12.01% | Income above personal allowance |
| Municipal Tax (kommuneskat) | ~25.05% | Average rate (22–27% by municipality) |
| Middle Tax (mellemskat) | 7.5% | Income above 641,200 DKK (after AM) |
| Top Tax (topskat) | 7.5% | Income above 777,900 DKK (after AM) |
| Top-Top Tax (toptopskat) | 5% | Income above 2,592,700 DKK (after AM) |
| Church Tax (optional) | ~0.64% | For Lutheran Church members only |
Maximum marginal rate: 60.5% for top-top bracket (including AM-bidrag but excluding church tax)
Income Thresholds Before AM-bidrag
Gross Income Thresholds for Salary Planning
For salary planning, these are the gross income thresholds before the 8% AM deduction:
Middle Tax threshold: 696,956 DKK (≈ 58,080 DKK/month)
Top Tax threshold: 845,652 DKK (≈ 70,471 DKK/month)
Top-Top Tax threshold: 2,818,152 DKK (≈ 234,846 DKK/month)
Deductions and Allowances
Personal Allowance (Personfradrag)
The personal allowance is automatically applied to all taxpayers and means you don't pay tax on the first 54,100 DKK of your income.
Single person: 54,100 DKK tax-free income threshold
Married couple: 108,200 DKK combined allowance
Employment Deduction (Beskæftigelsesfradrag)
12.75% of employment income, maximum 63,300 DKK in 2026 (increased from 55,600 DKK in 2025 — saving ~2,000 DKK in taxes). This deduction is applied automatically to all employment income and reduces your taxable income. It recognizes work-related expenses and encourages workforce participation.
Rate: 12.75% of employment income
Maximum 2026: 63,300 DKK (up from 55,600 DKK in 2025)
Applied automatically — no claim required
Other Common Deductions
Additional deductions reduce taxable income for various work and life expenses.
Commuting expenses: 2.28 DKK/km for 25–120 km, 1.14 DKK/km above 120 km, max 34,400 DKK/year
Union membership fees: maximum 7,000 DKK per year
Pension contributions: deductible for approved pension schemes
Domestic services (home cleaning, care): maximum 18,300 DKK/year
Interest on loans: deductible from capital income
Expat Tax Scheme (48E / Researcher Scheme)
Special Flat Tax for Foreign Workers
The expat tax scheme offers a flat 32.84% rate (27% income tax + 8% AM-bidrag) for up to 7 years (84 months). For 2026, the minimum salary requirement has been reduced from 78,000 DKK to 65,400 DKK per month, making it accessible to significantly more foreign workers and researchers.
Flat rate: 32.84% (27% + 8% AM-bidrag)
Duration: up to 7 years (84 months)
2026 minimum salary: 65,400 DKK/month (down from 78,000 DKK)
Much lower effective rate than standard progressive rates
Simplified filing — no deductions needed or allowed
Available to both employees and researchers/scientists
Must apply before or shortly after starting employment in Denmark
Important Notes on the Expat Scheme
After the 7-year period ends, you'll be taxed at ordinary progressive rates. The scheme only applies to employment income — other income (rental, investments) is taxed normally. No deductions can be claimed against income taxed under this scheme.
Only applies to employment income
Other income (rental, investments) taxed at normal progressive rates
No deductions claimable against scheme income
After 7 years: standard progressive rates apply
Investment Income and Share Taxation
Share Income Tax (Aktieindkomst)
Dividends and capital gains on shares are taxed separately from personal income at progressive rates. When including the 22% corporate tax paid at company level, the total effective taxation on dividends reaches approximately 44.9% (lower rate) or 54.8% (higher rate).
27% on first 79,400 DKK of share income (2026)
42% on share income above 79,400 DKK
158,800 DKK threshold applies to married couples
Total effective rate incl. 22% corporate tax: ~44.9% (lower) or ~54.8% (higher)
Capital Income (Kapitalindkomst)
Interest income, interest expenses, and net capital gains (excluding shares) are taxed as capital income.
Positive capital income: taxed at up to 42% (bottom, municipal, and middle tax apply)
Negative capital income: deductible with reduced effect (maximum deduction value varies by income)
Tax Filing and Compliance
How Taxes Are Collected
Employers automatically deduct income tax and AM-bidrag from your salary each month based on your tax card (A-skat). Around March, you receive a pre-filled tax return (årsopgørelse) with all income and deductions reported by employers, banks, and other institutions. Review, correct if needed, and submit through TastSelv at skat.dk.
Step 1 — Withholding at source (A-skat): deducted monthly by employer from salary
Step 2 — Pre-filled return: received around March with all reported income and deductions
Step 3 — Review and submit via TastSelv at skat.dk (no action needed if everything is correct)
Filing Deadline and Platform
Standard deadline is May 1. Extension to July 1 available upon request for complex situations. All tax filing is done online through TastSelv at skat.dk, available in English for international residents.
Standard deadline: May 1
Extended deadline: July 1 (upon request)
Online platform: TastSelv (skat.dk/en-us/tastselv)
Tax Settlement (Slutskat)
After filing, SKAT processes the return and issues a final tax assessment (årsopgørelse). If you paid too much preliminary tax, you'll receive a refund (til gode) paid directly to your bank account. If you paid too little, you'll need to pay the difference (restskat), typically in three installments.
Tax refund (til gode): paid directly to bank account
Additional tax (restskat): paid in three installments
Frequently Asked Questions
What are the income tax rates in Denmark for 2026?
Denmark has a progressive tax system with multiple components: 8% labour market tax (AM-bidrag), 12.01% bottom tax, average 25.049% municipal tax, plus three additional brackets — middle tax (7.5% above 641,200 DKK), top tax (7.5% above 777,900 DKK), and top-top tax (5% above 2,592,700 DKK). Maximum marginal rate reaches 60.5%.
What is the personal allowance in Denmark for 2026?
The personal allowance (tax-free income threshold) for 2026 is 54,100 DKK for single taxpayers and 108,200 DKK for married couples. This amount is automatically deducted from your taxable income.
How does the employment deduction work in Denmark?
The employment deduction is 12.75% of your personal income with a maximum of 63,300 DKK in 2026 (increased from 55,600 DKK in 2025). This deduction is applied automatically to reduce your taxable income and benefits all employed individuals.
What is the Danish expat tax scheme and who qualifies?
The expat tax scheme (also called researcher scheme) offers a flat 32.84% tax rate (27% + 8% AM-bidrag) for up to 7 years. For 2026, the minimum salary requirement is lowered to 65,400 DKK per month (from 78,000 DKK in 2025), making it accessible to more foreign workers.
How are dividends and investment income taxed in Denmark?
Share income (dividends and capital gains) is taxed at 27% up to 79,400 DKK (158,800 DKK for married couples) and 42% above that threshold. Including corporate tax of 22%, the total effective rate can reach approximately 54.8%.
What is the labour market tax (AM-bidrag) in Denmark?
AM-bidrag is an 8% mandatory contribution deducted from gross income to fund employment-related benefits like unemployment insurance, maternity leave, and sickness benefits. From 2026, employees under 18 are exempt from this contribution.
How do I file my tax return in Denmark?
Tax returns are filed online through TastSelv (skat.dk) by May 1st (July 1st with extension). Most information is pre-filled by employers. Taxes are withheld at source (A-skat) throughout the year, and final settlement occurs after filing.
What deductions can I claim in Denmark?
Common deductions include: employment deduction (max 63,300 DKK), commuting expenses (2.28 DKK per km for 25–120 km), union fees (max 7,000 DKK), pension contributions, interest on loans, and domestic services (max 18,300 DKK).
Calculate Your Tax in Denmark
Use our free calculator to estimate your take-home pay with the new 2026 tax brackets, deductions, and AM-bidrag. See exactly how the reform affects your salary.