Tax for employees in Denmark

An owner of a Danish company who wishes to hire an employee is obliged to report to the employee the gross amount of his or her monthly paycheck. The gross salary is the amount before all deductions, such as payroll tax, insurance premiums and tax, that the employee has to pay, while the net salary is the amount that remains after these deductions.

In Denmark, all taxes must be paid by the 10th of each month, which is why most employers pay their employees on the last day of the month. That is, upon receipt of the pay slip, the employer pays the net salary to its employee at the end of the month and any deductions from the gross salary on the 10th of the following month. To summarize: the employer pays the net salary on the last day of the month and pays any deductions, such as tax, to the Danish tax authorities ten days later.

In Denmark, the percentage rates of tax paid by employees are set annually, as the Danish tax system is progressive and therefore the amount of tax depends only on the individual employee's situation. Some employees receive a monthly tax credit (personfradrag), whereby they do not have to pay tax if their salary does not exceed a set amount, but only pay the tax they have stated during their initial Danish tax declaration.

A Danish employer is only interested in the tax rate given by the tax office, while an employee who feels that his net pay is too low and that he has paid too much tax should submit his comments to the Danish tax authorities, who will check whether the initial tax return has been completed correctly, whether the employer has declared the employee's tax card correctly or whether the employee himself, who can choose between tax cards A and B, has made the wrong choice and thus paid too much tax (Danish card A allows for a monthly tax deduction, while card B does not).