Denmark – Changes in Threshold Amount for Personal Allowance, Expat & Eligibility for AM-Bidrag – 1st January 2026

TAX RATE

Personal Allowance ( tax free Income Threshold)

The basic personal tax allowance (tax-free income threshold) in Denmark is scheduled to increase from DKK 51,600 (2025) to DKK 54,100 (2026) for single taxpayers (this amount is doubled for married couples).

This change, effective from January 1, 2026, is an automatic annual adjustment mandated by the Personal Tax Act (§20 indexation) and confirmed by the Ministry of Taxation for 2026. The increase is in line with standard indexation, resulting in a higher tax-free portion of income for all individuals.

Labour Market Contribution (AM-bidrag)

• Change: Denmark’s Labour Market Contribution (AM-bidrag) rule is changing.
• Current Rule (Until 31 Dec 2025): 8% AM-bidrag is applied to all taxable employment income, regardless of the employee’s age (including minors).
• New Rule (Effective 1 Jan 2026): The 8% contribution is exempt for employees under 18 (until January 1st of the year they turn 18). The deduction will only apply once the employee is 18 years or older.
• Payroll Action Required: Update the payroll rule to include an age-based condition: skip the AM-bidrag deduction for employees under 18 years of age.

Expat Tax Scheme Eligibility

• Effective January 1, 2026, the minimum gross monthly salary requirement for the 27% flat expat tax scheme is being lowered
• Current Requirement (2025): DKK 78,000 per month.
• New Requirement (Effective Jan 1, 2026): DKK 65,400 per month.
• Impact: This adjustment broadens eligibility for the scheme.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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Denmark – Changes in threshold amount for personal allowance, Expat & eligibility for AM-bidrag – 1st January 2026

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