The welfare system in Denmark is mostly financed via taxes. Foreign employees are usually covered by social security in Denmark. When you live and work in Denmark you must pay taxes to the Danish State. Taxes help pay for the Danish welfare system, such as health care, child care and education.
There are several ways in which you can be taxed. When you gain employment in Denmark, it is important that you investigate which tax scheme you will be covered by.
Income tax in Denmark consists of:
- A national tax
- A municipal tax
- A health care contribution
Members of the Evangelical Lutheran Church in Denmark must also pay church tax.
Special tax scheme for researchers
There is a special tax scheme for researchers and key employees who are recruited abroad and who are employed by a Danish company or research institution. Researchers who are recruited abroad have, under certain circumstances, and for a period of maximum 5 years, the possibility of being taxed 26 % (plus 8% labor market contribution) of their income.
You must be approved by both the University and the tax authority. The head of your institute will, on behalf of the University, assess and approve both your employment in a research position as well as your qualifications (at least a PhD level = position as Postdoc/assistant Professor or higher grade).
Ordinary income tax
If you don't qualify for the special tax scheme for researchers you must apply for a tax card at the tax center or visit International Citizen Service Center if you live in Odense, Aarhus, Aalborg and Copenhagen. This can be done as soon as you have a CPR number. Bring a copy of your contract and your passport.
Social security contributions
Social security contributions consist of an 8% labour market contribution paid on wages and benefits.
Special taxation for cross-border commuter (Germany and Sweden)
If you commute over national borders and maintain residence in a foreign country, special tax obligations apply.
Information about taxation if you live in Sweden and work in Denmark:
Information about taxation if you live in Germany and work in Denmark: