A tax reform taking effect in 2026 breaks down the tax bracket for top earners, customarily referred to as ‘topskat’, into three separate categories.
The top-end Danish income tax bracket, topskat, is based on the political principle that those who earn the most must contribute more to the Danish state than those who do not have as much income.
It has been a point of contention between parties across the right and left in the past, with various points of view favouring the model, wanting to reform it or advocating for its complete removal.
A new model which was adopted by parliament in 2024 will take effect from January 2026 will see the former top tax bracket broken down into three sub-brackets.
Income tax is divided into a number of components, of which the most important is the base tax, bundskat which is 12.01 percent in 2026. This rate is applied to earnings above the personal allowance or personfradrag, which is the portion of your earnings which is tax-free.
After bundskat, the higher tax brackets apply at the various thresholds which are detailed below.
In addition to this, income tax is made up of kommuneskat or municipal tax (between 22 and 27 percent depending where you live) and labour market tax (AM-bidrag), which is 8 percent.
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Labour market contributions are used for the government’s labour market expenses, for example to cover unemployment benefits and maternity leave. There’s also a voluntary church tax of up to 1.2 percent (but sometimes less) depending on where you live.
As well as income from employment, other types of personal income are included in the tax calculation. These can include pension contributions, social security benefits, property earnings, and dividends from Danish companies.
A complex list and system of deductions (fradrag) can be applied to calculate the overall tax rate you pay.
It’s important to keep in mind that you pay the bundskat, the base tax rate, on earnings under the threshold even if you earn more than the threshold. In other words, the tax rate on all your earnings doesn’t go up once your salary is higher than any of the thresholds. But you pay a higher rate on the portion of your earnings that is above the threshold.
The new tax brackets effective from 2026 are mellemskat (‘middle tax’), topskat (top tax) and toptopskat (top-top tax).
Mellemskat/middle tax
This is the equivalent of the former topskat and applies to earnings between 641,200 and 777,900 kroner, once the labour market contribution has been deducted. The rate is 7.5 percent (in addition to the 12.01 percent bundskat which you are already paying).
Mellemskat is also applied to capital income that exceeds 55,000 kroner.
Topskat/top tax
If your personal income exceeds 777,900 kroner after the labour market contribution, you have to pay top-bracket tax. This is an additional 7.5 percent on your income above this threshold, added to the two other rates which already apply.
Toptopskat/’top-top’ or additional top tax
Income above 2,592,700 kroner (after labour market contribution) is taxed at 5 percent, added to the three other tax rates. The high threshold for this tax means the number of people who pay it will be relatively low.