Danish Top Tax (Topskat) 2025
Top tax is an additional 15% tax levied on annual income exceeding DKK 588,900 after deduction of AM-bidrag and pension contributions. It is one of the key components that makes the Danish tax system progressive, ensuring higher earners contribute a larger share. In 2026, the top tax threshold rises to DKK 777,900 after AM-bidrag.
How Top Tax is Calculated
Your top tax base is your gross income minus 8% AM-bidrag and any pension contributions to qualifying schemes. Only the portion above the DKK 588,900 threshold is subject to the 15% top tax rate. For example, if your top tax base is DKK 700,000, you pay 15% on DKK 111,100. The unused portion of the threshold cannot be transferred.
Reducing Your Top Tax
One of the most effective ways to reduce top tax is through pension contributions. Payments to employer pension schemes reduce your top tax base directly. This makes pension savings particularly advantageous for high earners, as every krone contributed saves 15 ore in top tax alone, on top of other tax benefits. You can minimize top tax by contributing to pension โ it may even mean you avoid top tax entirely.
Top Tax Thresholds Over Time
The top tax threshold is adjusted regularly: In 2024 it was DKK 588,900, in 2025 it is DKK 611,800, and in 2026 it rises significantly to DKK 777,900 after AM-bidrag. This means in 2026 you need to earn over approximately DKK 845,000 gross (before AM-bidrag) to pay top tax. Fewer Danes will therefore pay top tax from 2026.