What is the Danish AM-bidrag?

Arbejdsmarkedsbidrag (labor market contribution) is a flat 8% tax on all employment income before income tax. It reduces the income base for the progressive income tax calculation.

What are the Danish income tax rates?

After AM-bidrag: personal allowance 49,700 DKK. Bundskat (bottom bracket): 12.52% on all taxable income. Municipal tax (kommuneskat): ~25.1% average. Topskat: additional 15% on income above 588,900 DKK (2024).

How does the Danish personal allowance work?

Personal allowance (personfradrag) of 49,700 DKK (2024). Income below this threshold is tax-free (before AM-bidrag). There is also a pensionist supplement and child supplement.

What is the effective marginal rate in Denmark?

Maximum effective marginal rate: AM-bidrag 8% + bundskat 12.52% + kommuneskat ~25.1% + topskat 15% = ~55.89% (before tax value of deductions). One of the highest effective rates in the world.

How are savings and investment taxed?

Investment account (aktiesparekonto) taxed at 17% up to 135,900 DKK balance. General stock income: 27% to 61,000 DKK, 42% above. Bond interest: taxed as regular income.

Denmark Skat Income Tax Calculator 2024

Calculate Danish income tax (skat). Labor market contribution (AM-bidrag): 8%. Municipal tax: ~25% average. Bottom bracket: 12.52%. Top bracket: 15% on income above 588,900 DKK. Effective marginal rate up to 55.9%.

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