In Denmark, personal income tax is directly deducted from your salary each month by your employer, based on the tax card (skattekort) issued to each individual by the tax authority Skat. Everything happens automatically: the company retrieves your tax card information from Skat, deducts the correct monthly tax amount, and transfers the remaining salary (after tax) to your bank account.
Each person is exempt from tax on a certain portion of their income each year — the basic tax-free allowance for 2026 is DKK 54,100 (DKK 51,600 for 2025).
Registering with Skat and Applying for a Tax Card
After registering your CPR (or personal tax number if staying for 3 months or less), contact Skat to obtain a tax card. You can submit your application online or fill out form 04.063, attaching: your signed employment contract, identification documents (passport or national ID card), marriage certificate (if applicable), and work permit (if you are a non-EU/EEA/Swiss citizen).
- After submitting your application, you will receive your preliminary income assessment (forskudsopgørelse) within approximately 2 weeks.
- The forskudsopgørelse specifies your personal tax number and is used to determine your tax liability based on your declared income and deductions.
Deductions from Salary
The first deduction from your salary is the AM-bidrag (labor market contribution) — 8% of your total income, applied even if you have a tax-exemption card. After deducting the AM-bidrag, the remaining amount is subject to income tax, which includes local tax (municipal tax, with varying rates depending on the kommune) and state tax calculated based on income brackets — the higher your income, the higher the state tax rate applied.
Note: Local tax rates and state tax brackets vary by year and kommune — always check the latest figures directly on skat.dk or your personal tax card.
Annual Tax Assessment
If your actual income or deductions for the year differ from what was declared in your preliminary income assessment, you must update your information before May 1st to avoid having to pay additional tax or being retroactively charged in the following year.