Denmark tax 2026: income brackets and VAT explained

Short answer

In 2026, Denmark's top-bracket tax, topskat, is 7.5% on the part of relevant personal income above DKK 777,900 after labour market contributions. Middle-bracket tax begins at a lower threshold, and very high incomes can also attract an additional top-bracket tax. Standard Danish VAT is 25%. The rates were checked with the Danish Tax Agency on 11 November 2026.

Keep the three thresholds separate

For personal income after labour market contributions, the 2026 thresholds are:

Mellemskat: 7.5% above DKK 641,200.

Topskat: an additional 7.5% above DKK 777,900.

Toptopskat: an additional 5% above DKK 2,592,700.

The tax called topskat in 2025 became mellemskat in 2026. An older article using the same term may therefore refer to a different threshold. Positive net capital income can also affect middle-bracket tax, so these personal-income thresholds do not cover every income category.

Does top-bracket tax apply to everything?

No. It applies to the portion above its threshold. Suppose the relevant personal income after labour market contributions is exactly DKK 800,000. The excess above the topskat threshold is DKK 22,100.

The topskat component in this simplified example is DKK 22,100 × 7.5% = DKK 1,657.50. That is not the total tax bill. The calculation assumes that DKK 800,000 is the correct taxable basis.

Other parts of the calculation

Labour market contributions, AM-bidrag, are generally 8% of earnings. They are deducted after ATP and the employee's own pension contribution but before other tax. From 2026 they apply from the start of the calendar year in which a person turns 18.

Bottom-bracket tax is 12.01% in 2026. Municipal tax and, where applicable, church tax also affect the result. Allowances and different tax bases mean that simply adding every headline rate does not give your effective tax rate.

Use your preliminary income assessment for the expected year and your annual assessment for the completed year. One bonus month does not by itself determine whether an annual threshold is exceeded. Your bank-account payment is also not the same as income after AM-bidrag: other deductions have already affected it.

How Danish VAT works

Standard VAT is 25% of the price before VAT. An item priced at DKK 100 before VAT therefore costs DKK 125 including VAT. The VAT contained in that final price is DKK 25, or 20% of the VAT-inclusive total.

Some activities are exempt, and cross-border transactions can follow different rules. An employee does not add VAT to ordinary employment pay.

The VAT registration threshold

The Tax Agency's general guidance requires registration for taxable sales exceeding DKK 50,000 within a calendar year. The relevant amount is turnover, not profit. This is not a personal tax-free earnings allowance.

Small-business provisions, the preceding calendar year and rules for foreign businesses may affect the position. Check the registration guidance for your activity. VAT and income tax remain separate: business profits can be taxable even where VAT is not charged.

Read also

• Moving to Denmark: residence, CPR and your first weeks
• Salaries in Denmark: average, median and minimum wage
• Danish citizenship: requirements and dual nationality

Official sources

Checked 11 November 2026. The tax rates above refer to 2026.

Danish Tax Agency: income tax brackets

Danish Tax Agency: labour market contributions

Danish Tax Agency: VAT basics

Danish Tax Agency: VAT registration

Legal guidance: registration threshold

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