Help needed regarding net salary

Hi Matea

Tax examples:
Middelfart, income 555,0000 kroner a year; tax = 212,700 kroner
Middelfart, income 600,000 kroner a year; tax = 237,840 kroner.

If you settle in Odense, tax will be around 2,000 kroner less in both examples.

If you settle in Odense, you'll need a commuting pass. It costs 1,325 kroner a month (but is deductable in your taxable income. The value of the deduction is 27 %).
https://www.rejsekort.dk/pendlerkort/br … rkort.aspx

I'll absolute advise you to make your own pension contributions too. When time comes, you'll be grateful for having a good pension.

/Nellie

Dear Nellie,

Thank you so much for your answer. With this 600,000 kroner a year example, this is the case when you are taxed as an expat and when you can take with you your company pension when you leave Denmark? Could you explain a bit how this works? It looks from the calculation as if I will have monthly higher salary and basically take home the company pension each month spent working as a Danish employee?

Regarding the pension, I have to decide which scheme to use, depending how long I'm planning to stay in Denmark... How long do I have to reside in Denmark (live and work) to be able to have full Danish pension?

If I settle in Odense, which I probably will, the commuting pass deduction in my taxable income (as you say value 27%), could you give an income estimation if I would use this option?

Thanks a lot in advance.
Sorry if I'm asking too many questions :-)

Matea

If you take the example based on 600,000 kroner, you can take your pension with you out of the country without being taxated, the example based on 555,000 kroner is the tax here and now, and the pension will be taxated when you retire.

And if you settle in Odense, the tax will be a little higher (2,000 kroner a year).

The tax value of the commuting expenses is 27 % of 15,900 kroner (1,325 kroner * 12) = 4,293 kroner.

It will not be the net pay which shall decide where to settle. If you prefer to settle in a large city, then you shall choose Odense. If you prioritise not to commute, then you shall choose Middelfart. If it will be up to you, and not a question of where you can find a good housing at a reasonable price.

The special taxation for highly paid people demands a far higher income than you'll take home.
https://skat.dk/skat.aspx?oId=107066&chk=215537
In 2018 the income shall be around 65,000 kroner or more per month if you'll be entitled, and even if you should be entitled, it's not certain that this kind of taxation would be the most favourable for you.

A full Danish pension (folkepension) requires minimum 40 years residence in DK between 15 and 67 years. You have to meet other requirements, and as far as I know you shall have lived in DK for at least a year to be entitled to a fractional pension.
https://star.dk/ydelser-og-ferie/pensio … kepension/
As the requirements for obtaining a folkepension have been tightened the latest years, and the welfare society is more than ever under pressure, I would take the folkepension as a gift when time comes, but not calculate with it.

You cannot ask too much. It's important that you have sufficient information to make the right choice. Do come on!


/Nellie

Dear Nellie,

This is just the 1st year salary as a base, later on I will work on base salary + bonus scheme so I'm expecting to go in this special expat taxation scheme... But I will see later on how to handle it and what will be the best taxation option for me. This 65,000 kroner or more per month is gross if I recall well? Then it's a question how the base salary and bonus are taken into account. Really, I will have to see this in the upcoming years.

I just needed approximated net figure on this gross salary. I will get tax expert from the company to help me decide what is the best option for me.

Yes you are right, I will live in Middlefart in the beginning and then see if I want to move to Odense.

I'm planning to stay in Denmark for few years, but later probably I will move again with the same company to another country/continent.

In this case what would you suggest to me in terms of pension?
I suppose with the 600,000 kroner a year (base on your calculation above it's monthly cca 30.000 kroner take home pay), I can afford nice accommodation and live comfortably in Odense. I won't be rich I know, but according to other posts seems that for 1 person it's nice income? (unless I live and rent in Copenhagen :-))

It's a really good income. You'll also be able to save money, travel etc. Perhaps you'll not be a millionaire on the pay, but you'll not miss anything.

https://skat.dk/skat.aspx?oId=107038&chk=215537
Tax liability in Denmark before and during employment
As an employee, you must not have been fully liable to taxation in Denmark or subject to limited tax liability on earned income etc. or commercial income within the last 10 years prior to your employment.

As I understand the rules, you shall meet the requirements from day one why you cannot shift, but a tax advisor will know the rules. And yes, the tax is calculated on the gross income so whether the scheme is so favourable or not will depend not only on your pay, but also on your other income, positive/negative.

/Nellie

Well yes, you are right. This special expat scheme is only valid if your start working on cca 65.000 kroner from the beginning I believe, I forgot about that :-) It seems if I earn more in the upcoming years< I won't be able to apply for it?

Regarding the pension, I have to see how to arrange it. If to use the expat option or to apply for regular Danish version. I'm not sure how long will I stay, but my job is such that I can expect in few years to move again, so I really don't know what would be best option for me.
That's why I asked you about what would you recommend.

Thanks
Matea