How Danish income tax works in 2026
First the labour market contribution (AM-bidrag) of 8% is taken from salary after ATP (99 kr a month for full-time employees) and your own contribution to an employer pension scheme. What is left is your personal income. On it you pay bottom tax of 12.01% and your municipality's tax, 25.05% on average in 2026, from 23.39% in Copenhagen to 26.30% in Lolland. Members of the Church of Denmark add church tax of 0.38% to 1.30%. A personal allowance of 54,100 kr is tax-free.
Municipal and church tax are charged on taxable income, which is lower than personal income thanks to the employment deduction (beskæftigelsesfradrag) of 12.75% of earnings, at most 63,300 kr, and the job deduction of 4.5% of earnings above 235,200 kr, at most 3,100 kr. Single parents get an extra 11.5%, at most 50,600 kr.
The 2026 tax reform
From 2026 the old 15% top tax is replaced by three steps on personal income: a middle tax of 7.5% above 641,200 kr, a new top tax of 7.5% above 777,900 kr and a top-top tax of 5% above 2,592,700 kr. Municipal tax, bottom tax and middle tax together may not exceed the tax ceiling of 44.57%, so in municipalities above 25.06% the middle tax is slightly lower. In salary before AM-bidrag, the middle tax starts at about 698,000 kr a year (58,000 kr a month) and the top tax at about 847,000 kr.
A worked example
On 40,000 kr a month in Copenhagen, 480,000 kr a year, without pension or church tax: ATP is 1,188 kr and AM-bidrag 38,305 kr, leaving personal income of 440,507 kr. Bottom tax is 12.01% of 440,507 − 54,100, or 46,407 kr. The employment deduction of 61,049 kr and job deduction of 3,100 kr bring taxable income to 376,359 kr, and municipal tax at 23.39% after the personal allowance is 75,376 kr. Take-home pay is 318,723 kr a year, 26,560 kr a month.
The same salary in different municipalities
| Municipality | Municipal tax | Church tax | Net on 40,000 kr | Net on 60,000 kr |
|---|---|---|---|---|
| Copenhagen (lowest) | 23.39% | 0.80% | 26,560 kr | 38,365 kr |
| Gentofte | 24.14% | 0.38% | 26,359 kr | 38,027 kr |
| Frederiksberg | 24.50% | 0.50% | 26,262 kr | 37,865 kr |
| Aarhus | 24.52% | 0.74% | 26,257 kr | 37,856 kr |
| Odense | 25.50% | 0.68% | 25,994 kr | 37,421 kr |
| Aalborg | 25.60% | 0.98% | 25,967 kr | 37,378 kr |
| Lolland (highest) | 26.30% | 1.23% | 25,779 kr | 37,074 kr |
Monthly take-home pay without church tax or pension contribution.
What this leaves out
Your employer withholds tax using the tax card (forskudsopgørelse) that Skattestyrelsen calculates from the same rules, so the monthly deduction is close to these figures and the difference is settled in the annual statement. Capital income and interest deductions, share income, the holiday allowance rules and the 27% researcher scheme for foreign experts are not included. Employer pension contributions come on top of the salary and are not taxed until paid out.