Tax reform
New tax system in 2026: What it means for your salary
You are used to receiving advice on salary negotiations from us at IDA. One of our most important tasks is to prepare you for these negotiations with your manager, so even though this article is about something else, we cannot resist offering some good advice on salary negotiations at the end of the article.
But first and foremost: this year, you can look forward to getting a bigger pay-out each month due to new Danish tax rules, without having to do anything.
‘Many of IDA's members have until now paid top-bracket tax on their salaries. But if you are one of those who earn between DKK 50,000 and DKK 235,000 per month, you will in future have a larger portion of your salary paid out,’ says Anders Overvad, IDA's chief economist.
Last year, the Danish government decided to implement a major tax reform, which will now benefit you. Among other things, a new middle bracket tax on income has been introduced, the income threshold for top tax has been raised, and a new so-called top-top tax has been introduced.
See here how much more of your salary will be paid out
The table shows the expected tax relief based on your monthly salary, but it is important to note that precisely how much tax you pay depends on various factors such as your mortgage, commuting, other income, etc. However, the table can give you a rough estimate of how much more you can expect to be paid.
| Your monthly income | Monthly tax savings | If you are five years or less from retirement |
|---|---|---|
DKK 10,000 | 315 | 499 |
DKK 20,000 | 315 | 684 |
DKK 30,000 | 315 | 868 |
DKK 40,000 | 315 | 984 |
DKK 50,000 | 315 | 984 |
DKK 60,000 | 815 | 1,484 |
DKK 70,000 | 1,505 | 2,174 |
DKK 80,000 | 1,536 | 2,206 |
DKK 90,000 | 1,536 | 2,206 |
DKK 100,000 | 1,536 | 2,206 |
DKK 150,000 | 1,536 | 2,206 |
DKK 200,000 | 1,536 | 2,206 |
DKK 250,000 | 839 | 1,509 |
DKK 300,000 | -1,461 | -791 |
DKK 400,000 | -6,061 | -5,391 |
Source: Lån & Spar Markets. The calculations are based on the assumption that there will be no changes in municipal tax and that the increase in the extra senior citizen's allowance will take place in March/April 2026 and then come into effect and apply for the whole of 2026.
Anders Overvad has a request for IDA members: ‘Although we at IDA are not tax experts, I will say that you should be aware of the level of tax you have to pay, so that you can adjust your preliminary income assessment and pay the correct amount of tax’.
On SKAT's website, you can read more about how to adjust your preliminary income assessment for 2026 if there are changes in your finances or life:
Preliminary income assessment 2026 skat.dk
‘Why hasn't my pay cheque gotten bigger?’
If you're wondering this because you haven't gotten the tax cut you expected, there could be a few reasons.
The most obvious thing to check is whether your preliminary income assessment has been updated. There could also be other factors at play, like changes to local council tax. Your tax is composed of several rates, deductions and conditions.
But don't worry – if you pay too much tax this year, you will get it back next year. However, it is a good idea to correct your preliminary income assessment, as the government does not offer good interest rates on excess tax.
Extra large tax break for the oldest in the labour market
If you are less than 5 years away from reaching retirement age, you will benefit even more from the new tax rules. The special deduction for seniors has been extended from 2 to 5 years before retirement age.
You will now receive an additional employment deduction, which means that you will save approximately DKK 9,500 in tax per year if you earn more than DKK 36,000 per month.
‘The new tax rules provide a huge financial incentive to continue working, which we welcome, as many of IDA's members would like to keep working after reaching the retirement age,’ says Anders Overvad, but he also points out the importance of reaching good agreements with your workplace on terms and tasks in your later career:
The clearer the framework you can agree with your manager from the outset, the more likely it is that the last years of your working life will be the ones you dream of.
‘At IDA, we hope that the new favourable tax rules will be a good opportunity for our oldest members to have that important conversation with their manager about their needs and wishes for their working life,’ emphasises Anders Overvad.
Coffee, sweets and electricity: Everything you need for a good day working from home is now cheaper
It's not just the bigger pay packet that will make you richer in 2026. In addition to tax cuts, the government has also lowered a number of other taxes, which will make it a little cheaper to go shopping.
For example, VAT has been removed on books, which is particularly good news for bookworms. All the many coffee-drinking IDA members can rejoice that coffee is also set to become cheaper. And if you have a sweet tooth, you can also look forward to lower taxes on sweets and chocolate.
However, the biggest savings will be on your electricity bill. The electricity tax will be reduced to the EU minimum rate of approximately 1 øre/kWh in 2026 and 2027.
The actual savings will depend on your electricity consumption, but based on a typical family with two adults and two children (living in a detached house of approx. 150 sqm and without an electric car), the annual savings on the electricity bill are expected to be approx. DKK 4,000.
Have this response ready for your manager at your next salary negotiation
Even though the tax cuts will mean more money in your pay packet without having to negotiate with your employer, as a trade union we still feel compelled to give you some good advice for your next salary negotiation.
Anders Overvad predicts that you should be prepared that your manager could use the tax cuts as an argument for not giving you a pay rise, because you have already received a larger pay packet this year.
In this case, you must insist that pay negotiations are about your efforts and your results at work, and that the financial recognition for this can only come from your employer and not from the tax authorities.
Therefore, you should prepare for this year's pay negotiations just as thoroughly as you usually do. You can find help here:
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