Reporting employee pay and deducting taxes in Denmark

We have prepared for you key information on what to do before filing a report, how to report wages and how to deduct tax.

Things to do before submitting your report

To become an employer in Denmark, you need to register on the website virk.dk. Once registered, you can access E-income in E-tax for businesses. If you need help accessing E-income, you can find a guide under the Ansatte (Employees) section of the website (in Danish only).

Once you have access to E-income, you can report your employees' income directly or hire a payroll bureau or an accountant to do it for you.

Options for handling payroll in Denmark: Payroll bureaus, accountants and DIY

If you find the payroll process complicated, you can hire a payroll bureau to make things easier for you. They will take care of the bookkeeping and documentation and it should not require much of your time. However, keep in mind that you are still responsible for providing accurate information and making timely payments.

You can find payroll bureaus online and compare their prices and services. Another option is to hire an accountant to handle the reporting and bookkeeping for you.

You can report pay via E-income for free, but it requires you to spend time learning the system and reporting and transferring payments to the authorities every month. You are also responsible for your own bookkeeping.

If you choose to run payroll yourself, you can watch a Danish video guide on Reporting pay (E-income) for help.

Deductions for A-tax and labour market contributions

An employer paying wages to his employees in Denmark must remember that A-tax and labor market contributions must also be deducted from their wages. In addition, you may need to consider other factors, such as whether your spouse or child works for your company. Make sure you do your research and understand all the necessary deductions and requirements.

Providing your employees with payment records

As an employer, it's important to give your employees a payslip every month. This document should contain detailed information about their pay, and what deductions were made. The information you include on the payslip might change depending on the type of job your employee has.

To create a comprehensive payslip, you should include:

- The name, address, and business registration number of the employer
- The name, address, and social security number of the employee, along with any employee identification number
- The pay period being covered by the payslip
- The total salary before taxes are deducted
- The amount of A-tax and market contributions that were deducted
- The total number of hours worked by the employee
- The amount of pension contributions, including any supplementary pension contributions
- The employee's net salary, or the amount they take home after taxes
- Information about the employee's tax card and withholding rate
- Any holiday pay the employee is entitled to
- Other benefits, such as free phone usage or a paid lunch break
- The date on which the employee will receive their pay
- Details of the tax card, including deductions and withholding rates
- The amount of A-income tax that was withheld at the source, before any deductions were made for market contributions (both for the current period and year-to-date)
- The total amount of tax that was deducted at the source, for both the current period and year-to-date