The Danish tax system is progressive, meaning that those who earn the most also pay the most in taxes. A-tax, also known as withholding tax (i.e., tax deducted at the source/salary), was introduced in Denmark in 1969. The progressive nature of the tax system means that people with higher incomes pay higher taxes than those with lower incomes. In Denmark, people with high incomes pay between 39% and 43% in taxes, while those with lower incomes pay between 32% and 38% in taxes.
A Guide to A-tax and B-tax in Denmark
What is A-tax?
"A-tax" is an abbreviation for "Arbejdsmarkedsbidragssatsen" (Labor Market Contribution Rate) and refers to the tax deducted from A-income. As an employee, your taxes are paid throughout the year via your employer. Essentially, the only thing you need to do is check that your taxes are correctly paid by reviewing your payslips and, at the end of the year, your annual tax statement.
A-tax is calculated as a percentage of taxable income and varies depending on the income level. The rate may change from year to year, as it is set by the Danish Parliament (Folketinget) during the adoption of the annual finance act. A-tax is a prepaid tax that is deducted from your salary before it is paid to you.
Your A-income consists of your salary, student grants (SU), or unemployment benefits. You may receive A-income from one, two, or more employers. If you have multiple employers, your primary employer (the one where you earn the most) deducts your personal allowance from your income and pays taxes on the remaining amount (if it exceeds your allowance). The second employer calculates taxes based on your tax rate and then pays those taxes to the Danish Tax Agency (Skat).
In other words, A-tax is the tax your employer pays on your behalf. As an employee, you are not generally responsible for handling the payment of your A-tax. The only thing you need to do is review your preliminary income assessment on Skat.dk to ensure your income is registered as the amount you expect to earn. At the end of the year, check your annual tax statement to confirm that your income has been correctly reported and that all deductions you are entitled to have been accounted for. Once you’ve reviewed your statement, you can see whether you are owed a refund or need to pay a residual tax. If you owe residual tax, you’ll also be notified of the payment deadline to avoid interest charges. If you are owed a refund, the amount will automatically be transferred to your NemKonto (linked account) on a specified date.
What is personal deduction/pre-tax deduction?
Deductions before tax refer to expenses that can be subtracted from your income before taxable income is calculated. These deductions reduce your total taxable income, resulting in lower taxes owed.
Common pre-tax deductions include:
Transportation – if you commute more than 12 km to work.
Union fees – expenses related to professional unions.
Pension contributions – payments into a pension plan are typically deductible.
Mortgage interest – interest on loans is usually deductible.
Child support payments.
Donations to charitable organizations – contributions to approved charities are often deductible.
What is B-tax?
B-tax is the tax you pay on B-income. B-income includes fees, remuneration, profits from self-employment, interest income, free meals and lodging, etc. As a self-employed individual, you are responsible for reporting your income to the Danish Tax Agency and for paying the appropriate taxes yourself.
When paying taxes on B-income, you estimate your expected annual income on Skat.dk. Based on your estimate, you receive payment slips with your preliminary income assessment and pay the calculated tax amount. Typically, B-tax is paid in up to 10 installments during the income year. At the end of the year, a final calculation determines whether you paid the correct amount. You either pay residual tax or receive a refund if you overpaid.
Is B-tax always paid in installments?
Taxes are not automatically deducted from B-income. If you only have occasional or small amounts of B-income during the year, you can pay B-tax on that income as follows:
Deduct the labor market contribution (AM-bidrag) by subtracting 8% from the B-income.
Calculate B-tax using the tax rate stated in your preliminary income assessment.
Combine the B-tax and labor market contribution, then pay the total amount to Skat.
Example:
If you receive DKK 2,000 for giving a lecture or completing freelance work:
Labor market contribution: 8% of DKK 2,000 = DKK 160.
Tax rate (e.g., 38%): 38% of DKK 1,840 (DKK 2,000 - DKK 160) = DKK 699.20.
Total tax payment: DKK 160 + DKK 699.20 = DKK 859.20.
This leaves you with DKK 1,140.80 from the DKK 2,000 you received.
How do I know if I need to pay A-tax or B-tax, or both?
If you live in Denmark and have a salary from an employer, your employer automatically calculates and pays your A-tax.
If you run your own business, receive fees, royalties, or other types of payments (as mentioned above), you must pay B-tax, which you are responsible for submitting to the Danish Tax Agency (Skat).
A-tax and B-tax are calculated at the same tax rate (as shown in your annual tax statement). If you have both A-income and B-income, your deduction is typically used by the employer who pays your A-income.
What are tax payments used for?
The income generated through the tax system—from both A-tax and B-tax—is crucial for financing public services and welfare benefits in Denmark. The Danish welfare model includes healthcare, education, social security, childcare, and infrastructure.
The Danish tax system ensures that individuals with higher incomes contribute more to society, regardless of whether their income is taxed through A-tax or B-tax. The system supports redistribution and social equity through various deductions and tax schemes. Both A-tax and B-tax revenues play an essential role in funding public services, healthcare, and welfare benefits, ensuring a high standard of living for all citizens.
Do you pay more tax when you have multiple jobs?
Whether you have one job where you pay A-tax or multiple incomes taxed under A-tax or B-tax, the total tax you pay will remain the same. Below is a simplified example illustrating that regardless of whether you pay both A-tax and B-tax or only A-tax, the end result is the same in terms of how much you pay:
Example Calculation (Excludes AM-contribution and other mandatory contributions):
Income: 12,000 DKK
Monthly Deduction: 4,000 DKK
Tax Rate: 38%
Scenario 1: A-income (10,000 DKK)
Taxable Income: 10,000 DKK - 4,000 DKK = 6,000 DKK
Tax: 38% of 6,000 DKK = 2,280 DKK
Payout: 10,000 DKK - 2,280 DKK = 7,720 DKK
Scenario 2: B-income (2,000 DKK)
Tax: 38% of 2,000 DKK = 760 DKK
Payout: 2,000 DKK - 760 DKK = 1,240 DKK
Total Payout: 7,720 DKK + 1,240 DKK = 8,960 DKK
Scenario 3: A-income Only (12,000 DKK)
Taxable Income: 12,000 DKK - 4,000 DKK = 8,000 DKK
Tax: 38% of 8,000 DKK = 3,040 DKK
Total Payout: 12,000 DKK - 3,040 DKK = 8,960 DKK
The examples show that the total payout is the same whether you have pure A-income or a combination of A-income and B-income.
If unsure about A-tax or B-tax, what should you do?
It’s recommended to contact the Danish Tax Agency (Skat) or a tax advisor for clarification.
Tax is the foundation of the Danish welfare model
The Danish tax system is a cornerstone of Denmark's economic and social structure. It is designed to fund public services, ensure social equity, and support the welfare state.
Progressive taxation in Denmark aims to achieve social justice and income redistribution, ensuring that those with greater financial means contribute more. This creates a solidarity-based system where welfare is shared broadly among citizens.
The Danish tax system is also recognized as one of the most efficient in the world due to its high level of digitalization and automation in tax administration. Tax authorities have access to data from employers, banks, and other sources, enabling precise and effective tax collection.
Job at Just Eat as a B-income, is it possible?
Since we work with fixed shifts and contracts, it is not possible to have a job at Just Eat as a B-income, as B-income is considered sporadic income for freelance work, etc. However, you can have a job at Just Eat as your second or third job – when you apply, just remember to let us know whether we should use your main card (hovedkort) or your secondary card (bikort) when calculating your tax.
Your main card is often used by the main employer – the place where you earn the most, and they deduct your deductions before calculating your tax. The second employer deducts tax on the entire earned amount.
You can also choose to work tax-free when you work with us, just remember to let us know when you start.
Universal welfare services
Universal access to healthcare and free education are pillars of the Danish welfare model. These services, financed through tax revenue, ensure that all citizens have access to essential services regardless of financial status. Taxes also fund social benefits such as pensions, unemployment benefits, and family allowances, maintaining the foundation of the welfare system.
Job with Just Eat as B-income—Is it possible?
Since Just Eat operates with fixed shifts and contracts, it is not possible to work at Just Eat under B-income, as B-income is typically considered sporadic freelance earnings. However, you can have a job at Just Eat as a second or third job. When applying, simply indicate whether we should use your primary tax card (hovedkort) or secondary tax card (bikort) for tax calculations.
Primary Tax Card (Hovedkort): Typically used by your main employer, where you earn the most. The employer deducts your tax allowance before calculating your tax.
Secondary Tax Card (Bikort): Used by additional employers, who tax the full income without deducting an allowance.
You can also choose to work under a tax-free card (frikort) if applicable. Be sure to inform us when you start.
Above briefly:
Key Terms Recap:
What is A-tax and B-tax?
A-tax is the tax paid on A-income, while B-tax is the tax paid on B-income.Difference between A-tax and B-tax:
A-tax is automatically deducted and submitted to Skat by your employer. B-tax is calculated and paid by the individual.What is AM-contribution (Arbejdsmarkedsbidrag)?
AM-contribution is an 8% tax applied to both A-income and B-income. For A-income, the employer automatically deducts the AM-contribution. For B-income, you must calculate and submit it yourself.Purpose: AM-contribution funds state labor market expenses like unemployment benefits, leave, and continuing education.
The information included on this page is only intended for general information purposes and does not relate specifically to work at just-eat.dk. Although just-eat.dk. makes every effort to keep the content on this page up to date, the information is offered without any guarantee or claim of accuracy. We therefore recommend that you consult official government websites or seek professional advice before acting.
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