You Got a Job in Denmark, So What Now?
Our congratulations to you!
Denmark is a country of high taxes, and it is therefore important not only to know your gross salary, but also to understand how much money you will get after taxes, because these two numbers will be very different!
Here’s a little guide to help you on your way towards what to expect and what to be aware of.
Step One – Preliminary tax statement or “Forskudsopgørelse”
Forskudsopgørelse is your tax budget for 2018. You will find it in your personal account at http://skat.dk/skat.aspx?oid=80716, where you can access it using your personal NemID code.
Step Two – Make Sure Your Tax Budget is Correct
Skat (the Danish Tax authority) does not automatically and immediately receive data about your new job. However, in order to calculate correct taxes, you need to tell Skat your expected salary figures for the current year. To do this, go to Forskudsopgørelse for 2018 and fill in paragraph 201 – wages. Here, you would take your monthly wage and multiply it by the remaining number of months in 2018.
While you are logged in, it’s a good idea to check whether you receive all the tax deductions that you are entitled to.
Here is the list of the most popular tax deductions:
- Befordringsfradrag: if your job is located further than 12 km from your home, you are entitled to a transport tax deduction. Tax is provided to you by a calculator that automatically calculates this deduction if you specify your home and work addresses, as well as the number of days in the year when you go to work.
- A-kasse og fagforeningsfradrag: If you pay to A-kasse for unemployment insurance and to trade union, you are entitled to deduct these amounts from your taxes.
- Interest rates for bank and mortgage loans: If you own real estate in Denmark, then make sure that the interest that you pay for the bank and mortgage loan is correctly indicated in your Preliminary Tax statement.
- Donations to charity: If you give money to Danish charities such as Kræftens Bekæmpelse, Børnefonden, Amnesty International and the like, then you can also deduct these expenses from your taxes
Here’s a link that will guide you to the descriptions of all available tax deductions: CLICK HERE
Step three – calculate how much you will receive after taxes
Download a PDF version of your Forskudsopgørelse and write down the two numbers from the top of the first page: Withholding rate(“Trækprocent”) and Monthly deduction and allowances (“Skattefrit fradrag”). You will need these numbers in order to calculate your monthly pay, after taxes.
This link will help you to calculate your salary after taxes: CLICK HERE
Here you will need to fill in withholding tax rate and monthly deduction and allowance. Next, you have to specify how often you receive a salary (once or twice a month), and what tax card you use: Primary or secondary. If this is your primary job, then just choose a “primary tax card”.
Voila, now you will know how much you should expect after taxes.
We wish you good luck in your new work life. If you need advice on financial matters in Denmark, please contact our financial adviser Elena Kabachenko HERE
Want more help finding a job in Denmark? Welcome Group Consulting offers Recruitment Assistance for English speakers. Click HERE for more details.
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