Gross vs net salary advice

Hi,

New to the site, hoping to get some information on Danish tax calculations.

Currently living in Belgium and I am offered a manager job in CPH at a monthly wage of 65000 DKK before taxes, plus a 4000 DKK monthly car allowance.
My personal contribution towards ATP is 5% of the pay, so 3250 DKK/ month, with the company adding another 6500 DKK.

So that would bring my pay to 65750 DKK a month or 789000 DKK / year.

I'd be moving with my wife and son.
My wife wouldn't be employed for the first year or so, but we'll likely get some income from our house back in Belgium that we'll rent out whilst we're here. That income will be assigned to her, and let's put that income at around 7500 DKK / month for easy consideration.

We'd be living in greater CPH, and accept the fact that we'll likely need to look for a place in the newer, expensive areas (Sluseholmen, Islands Brygge, etc), if we can afford it at all.

Multiple articles state Denmark having a high tax rate:
- SKAT shows tax ceiling on personal income at 52%
- some posts here mention being taxed at 63% if your tax card isn't set up correctly
- some articles speak of a tax rate of 55% being applied if your tax card is not registered correctly, etc

But based on the feedback I've seen in here, the tax rates seem to go from 30 to 36%, that latter for an annual salary of 1.1mio DKK?

So any idea how my salary would translate into net pay?

Also, does anyone have more details towards towards the criteria for the reduced expat tax rate (http://skat.dk/skat.aspx?oid=97319)?
The website states a minimum salary of 65100 after ATP but including allowances, so my 65750 would qualify.
But I'm sure other factors are at play as well to be accepted, which i can't seem to identify (yet).

My acceptance of the offer depends whether or not we'd be able to live (comfortably) on that pay or not. So I want to get as much information on this as possible before making any decisions.

Many thanks in advance for the feedback.

(sorry for the long post)

This is an issue for experts.

I take that you are going to work in a big international company which can put such expertise at your disposal. I would absolutely ask for such help. If you don't want to ask for it, then I'll recommend you to contact SKAT as the second choice.
https://skat.dk/skat.aspx?oid=8544

http://skat.dk/skat.aspx?oid=3106&ik_navn=transport
http://icitizen.dk/

... contribution towards ATP...
https://indberet.virk.dk/sites/default/ … somhed.pdf
As you see, the amounts are much less here.

The mentioned amounts is part of the company's pension scheme. Normally, your amount can be deducted in your income before taxation as the money isn't available before you retire in a far future, and at that time the pension will be taxated. In addition to the normal praxis, expats have the possibility to take the saved pension amounts with them as a sum when they leave the country. If they prefer to do this, the pension contributions will be taxated along with the monthly pay. So you have to do a choice.

If you rent out your house in Belgium for more than 12 months, the rent will be regarded commercial rent, and you shall choose between the methods of accounting. Despite what kind of method you choose, the net income will be taxable. It depends on any expenses.
http://skat.dk/skat.aspx?oid=2234797
As long as you are in Denmark, all income will be taxated here, but of course with regard to a double taxation agreement.

Then you mention the tax scheme for highly-paid employees. If you choose this scheme, the taxable income is without deductions, e.g. you cannot profit from your wife's unused personal deduction (which will be 46,000 kroner as long as she doesn't work). And the first year, you'll not be entitled to holiday without paying for it yourself as the holiday earning year goes from January 1 to December 31 the year before. This means that your income the first year will not consist of 12 months, but less.

As there are so many unknown factors, I have made some rough calculations based on the fact that you are married and have a child under 18 years. Living in the municipality of Copenhagen. 2018.

Your income 800,000 kroner                 Your income 800,000 kroner                         
Rent 90,000 kroner                                  Rent 0
Wife doesn't work                                    Wife doesn't work
Tax 355,325 kroner                                 Tax 322,825 kroner

Your income 800,000 kroner                 Your income 800,000 kroner
Rent 90,000 kroner                                  Rent 0
Wife 450,000 kroner                                Wife 450,000 kroner
Your tax 371,862 kroner                         Your tax 339,361 kroner
Your wife's tax 160,037 kroner              Your wife's tax 160,0137 kroner

http://www.tastselv.skat.dk/fskbrgn2/Skprofil.aspx

A long question requires a long answer, and my answer is long, but if it is elaborated enough, I don't know. Your rent won't be 90,000 kroner without deduction, but anyway, I chose the gross amount.Taxation is a complicated thing, and especially when we talk double taxation agreements, foreign income ........................ The list is long. However, if you think we/I can be of more use, don't hesitate bringing up your questions.

/Nellie

Hi Nellie,

Many thanks for your elaborate reply.
I have seen your kind and useful feedback around the forum, and was hoping you would do me the honour of replying to my query as well.

Thank you so much for the rough calculations!
I had made some of my own, using the same calculator, using Google Chrome which autotranslated the form. But I couldn't safely trust my input, being unfamiliar with the tax system, so really appreciate yours (even if they are 'rough').
This really allows us to get at least some grasp on the potential net salary.

Wishing you a pleasant evening.

Dear Nellie,

You are so kind to help many of us on various questions here! Thank you very much in advance!
I have a potential offer in CPH, and I'm studying how much the salary will be to match the tax scheme for highly paid foreign. My question is, if I have DKK 70,000 monthly with 5% company pension, will it be eligible for the special tax scheme?

Thanks

Regards

Raffi

Will they deduct the company pension from my salary When SKAT is check the amount of salary fulfillment? Or we only need to meet the salary amount which is greater than DKK 68,100+ATP(DKK284)?

Hi o2o,

The required minimum salary for being eligible to the special taxation is 68,100 kroner (2020). You must expect that this amount will be higher in 2020. Be sure that your pay will be on the right side of this amount, too.

Your offered salary, 70,000 kroner - ATP 284, will meet the requirements, given that the pension part of the pay is kept out of this calculation. It probably will, but be ensured of this. A pension scheme may differ.

/Nellie

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