Topskat

What is Topskat?

Topskat, or the top tax, is a progressive income tax levied on individuals whose income exceeds a certain threshold. As of 2025, this threshold is set at DKK 611,800 after the deduction of the 8% labor market tax (AM-bidrag). The topskat rate is currently 15%, meaning that individuals earning above this threshold pay an additional 15% on the income exceeding DKK 611,800.

How does it work?

Topskat is part of a progressive tax system, where tax rates increase with income levels. For example, if an individual earns DKK 600,000 after labor market contributions, the first DKK 552,500 is taxed at the normal rates, while the income exceeding DKK 552,500 (i.e., DKK 47,500) is taxed at the topskat rate of 15%.

Data and Statistics

Common rules or requirements

• Only individuals earning above the topskat threshold are liable to pay this tax.
• The income threshold for topskat has been gradually increasing, resulting in fewer individuals being subject to this tax over the years.

Example

Consider an expat working in Denmark who earns DKK 650,000 annually. After the labor market tax, they would pay topskat on the income exceeding DKK 611,800, which means they would pay an additional 15% on DKK 38,200, significantly impacting their overall tax burden.