Expertise
Salary from a foreign employer
For anyone who lives and works in Denmark but is employed by a company in another country, for example as a remote employee, and for the foreign company that employs them.
If Danish tax is not withheld from your salary, you may need to arrange payment yourself.
We help employees and foreign employers manage advance tax payments and clarify social security and permanent establishment issues.
How we can help
- Preliminary tax assessments
- Reporting foreign salary
- Treaty relief and section 33 A
- Social security and contributions
- Employer registration and taxable presence
Why is no tax withheld from your salary?
A foreign employer without a permanent establishment in Denmark is generally not required to withhold Danish A-skat (income tax) and AM-bidrag (labour market contribution). Your salary is therefore B-indkomst (B-income), and responsibility for paying the tax lies with you.
You are taxed in Denmark like anyone else who is fully tax liable, as long as the work is done here. The fact that your employer is based abroad does not change Denmark's right to tax salary for working days in Denmark.
How do you pay the tax during the year?
Your salary must be entered in your forskudsopgørelse (preliminary income assessment), so that Skattestyrelsen (the Danish Tax Agency) can collect B-skat (provisional tax) in instalments during the year. You have to include the 8% AM-bidrag yourself, because it is not withheld automatically.
Any amount not covered by the year's provisional tax becomes restskat (back tax). Back tax carries interest, and if you pay it voluntarily by 1 July of the following year, the surcharge is lower. Larger amounts are otherwise collected in three instalments in August, September and October.
- Enter your expected salary in the preliminary income assessment as soon as the employment starts.
- Include the 8% AM-bidrag in the calculation.
- Update the preliminary income assessment when your salary changes or you receive a bonus or share-based pay.
- Check your tax assessment notice, and report the salary yourself if it is missing.
What if you also work in other countries?
Working days outside Denmark may, under the double tax treaty, give the work country the right to tax part of your salary. Denmark still taxes it but grants relief for the foreign tax under the treaty or under section 33 A of ligningsloven (the Danish Tax Assessment Act), if the conditions are met.
If your employer has withheld tax in its own country on salary for work in Denmark, that is generally incorrect. The tax has to be reclaimed abroad, because Denmark does not give relief for tax the other country had no right to charge.
What obligations can the employer have in Denmark?
If your work from here creates a permanent establishment for the company, it has to register and withhold A-skat and AM-bidrag like a Danish employer. This can happen through a home office if you carry out the company's core business from here over a longer period.
If you are covered by Danish social security, the Danish rules on social security contributions also apply to the foreign employer. This has to be clarified separately, because social security follows different rules from tax.
Frequently asked questions
Does my foreign employer have to withhold Danish tax?
It does if the company has a permanent establishment in Denmark. Otherwise, your salary is B-income, and you have to make sure the tax is paid through your preliminary income assessment.
Do I pay AM-bidrag on salary from a foreign employer?
Yes, if you are covered by Danish social security. You calculate the 8% AM-bidrag yourself and include it in your preliminary income assessment. If you are covered by social security in another country, you generally do not pay AM-bidrag.
What happens if I have not paid tax on my salary during the year?
The tax appears as back tax on your annual tax assessment, with interest and a surcharge. You can reduce the surcharge by paying voluntarily by 1 July of the following year. Larger amounts are otherwise collected in instalments in the autumn.
My employer withheld tax in its home country. Can I offset it in Denmark?
Only if the other country had the right to tax the salary under the double tax treaty, for example for working days there. Tax on salary for work done in Denmark generally has to be reclaimed abroad.
Do I have to report the salary on my tax return myself?
Yes, if it is not already there. Salary from a foreign employer is not normally reported to the Danish Tax Agency, so you have to enter it yourself in TastSelv (the online tax self-service). This applies even if tax has been paid abroad.
What does this mean for you?
This page is general. Your own situation may be different, so talk to us before you act on it.