Question 1

How much of a pay raise do you keep in Denmark?

Accepted Answer

It depends on your income. Below the mellemskat threshold (DKK 641,200 of income after AM-bidrag) most Danes keep roughly 58–63% of a raise after AM-bidrag, municipal and bottom-bracket tax. Once a raise pushes you into mellemskat (+7.5%) or topskat (+7.5%), the portion above the threshold is taxed harder, so you keep less of the top of the raise. This calculator shows your exact keep-rate for any two salaries.

Question 2

Why do I keep less of a big raise in Denmark?

Accepted Answer

Danish income tax is progressive. When a raise lifts your income past the mellemskat threshold (DKK 641,200 after AM-bidrag) or the topskat threshold (DKK 777,900), the amount above each threshold is taxed at a higher marginal rate. So the first part of a raise is taxed less than the part that spills into a higher bracket.

How Much of a Raise Do You Keep?