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Summary:

Danes love to pay tax :-) well its not entirely true, but approximate 45-50% of what people earn is paid in tax, which keeps the public sector and the welfare society running with money for a health care system, your own doctor, public infrastructure, Danish language lessons and much more. What is not to like.

Morten Thygesen

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Tax System and Insurance in Denmark

Updated 7.11.2018

There are many formal issues to consider when moving, living and working abroad, which for instance workindenmark.dk provides a lot of detailed information on, covering law, permissions, trade unions, tax, contracts, holiday pay etc. Eurocareers provides a quick overview of the central features of the tax system, health and labor market insurance.

A progressive tax system


Your tax is paying for the welfare society, and Denmark chose to implement a progressive tax system to create equality and let those with highest income contribute with most tax payment. This progressive tax system charges approximately half of your income. So tax starts around 33% and progressively charges 65% of the money exceeding 480 000 kr. pr year. As a rule of thumb, you get a deduction of 50 000 kr pr. year which you don't pay tax of. There is also a labor market fee on 8% included in the tax, which is being spend to improve labor market conditions.

Tax Citizen Service


To make tax easier, we have a public organisation called Borgerservice in each small city/local area. Borgerservice is there to help on all sorts of public sector matters and formalities. They also advise on tax and what you need to do. If you have complications figuring out what Borgerservice says or just need to get extra help on very complicated tax matters, you could pay an accountant or an advisor to make sure, not too pay too much in tax.

Health insurance


If you are an EU-citizen in Denmark, you get a health insurance with hospital services and your own local doctor. There is also a discount on medication by having the health insurance. Denmark has international administrative units to help you, they are called International Citizen Services (ICS) and are located in each region to help on rules and getting a personal ID card, which practically gives you access to a local doctor, the library etc. On the health care there might be different regulations according to your origin, but the ICS is there to help you.

Unemployment insurance


If you are member of an unemployment insurance company (a-box) in Denmark, and been working minimum 1924 hours in Denmark - within 3 years, you are entitled to a 2-year relative high subsidy payment in case you get unemployed. Actually, the state pays most of the subsidy, but you also contribute by your quarterly payment for the a-box (unemployment insurance company).

There has been a lot of political debate on the unemployment subsidy system - and also changes in the immigration law recently, so the best idea is to get in touch with the ICS or a-box organisations and listen which rules apply right now and what is expected, if you decide to work in Denmark.

Sources:
 workindenmark.dk
 International Citizen Services (ICS)

Denmark