How net pay is calculated in Denmark
Danish employees pay three things out of their salary: the 8% labour-market contribution (AM-bidrag), a small fixed ATP pension contribution (99 kr. a month for full-time work) and income tax, which the employer withholds as A-skat. Most employees also pay a share of an occupational pension, usually 4% of salary, with the employer adding about 8% on top. Both pension shares and ATP come off before AM-bidrag and tax. Holiday works differently for monthly-salaried and hourly-paid staff. For a monthly salary of 40,000 kr. in an average municipality, with no church tax and 4% + 8% pension, the net pay in 2026 is about 25,600 kr. a month.
- Municipal tax (kommuneskat) from 23.39% in Copenhagen to 26.30% (2026; national average 25.05%), plus church tax of 0.38–1.30% for members of the Church of Denmark. Both are charged on taxable income, after the employment deduction (12.75%, max 63,300 kr.), the jobfradrag (max 3,100 kr.) and the extra pension deduction (12% of pension contributions).
- State taxes from 2026: bundskat 12.01% on all personal income, plus a new three-step scale on income after AM-bidrag: mellemskat 7.5% above 641,200 kr., topskat 7.5% above 777,900 kr. and toptopskat 5% above 2,592,700 kr.
- Personal allowance of 54,100 kr. is tax-free for everyone. Under the tax ceiling (skatteloft) of 44.57%, municipal tax, bundskat and mellemskat together may not exceed 44.57%. In the 75 municipalities with a rate above 25.06%, the mellemskat rate is cut, for example to 6.26% in Lolland.
Tax card, trækprocent and årsopgørelse
Your employer uses the trækprocent and monthly deduction (månedsfradrag) on your tax card. In the example above these are about 37.06% and 8,600 kr. The tax card comes from your preliminary assessment (forskudsopgørelse) on skat.dk. If you keep it up to date, the tax withheld matches the annual tax shown here. If you don't, the annual statement (årsopgørelse) in March gives you a refund or a bill for back tax (restskat).
Holiday pay and hourly wages
Monthly-salaried staff (funktionærer) keep their salary during the 25 days of holiday and get a holiday supplement (ferietillæg) of at least 1%. Hourly-paid workers are not paid during their holiday. Instead, 12.5% of their earnings is saved as feriepenge and paid out when they take holiday. The calculator converts hourly wages as follows:
- Salaried: monthly salary = hourly rate × weekly hours × 52 ÷ 12 (160.33 hours at 37 hours a week), annual gross = 12 × monthly + 1% ferietillæg.
- Hourly with feriepenge: annual wages = hourly rate × weekly hours × 47 working weeks, plus 12.5% feriepenge. At 250 kr. an hour and 37 hours, that is 434,750 kr. + 54,344 kr. = 489,094 kr.
Not included: union and A-kasse fees, the commuting deduction, capital income, transfers between spouses and the senior employment deduction. Employer costs cover pension, ATP and the Samlet Betaling levies (AUB, Barsel.dk), which add up to only a few thousand kroner a year.