Danish Social Security
Denmark has a very extensive social security system, covering following: health insurance, sickness benefits, maternity and paternity leave, pensions, industrial injury insurance and family benefits. The system is generally mainly financed by income taxes. Unemployment insurance is separate from the tax-funded social system, though. Participation by employees in a Danish unemployment fund is on a voluntary basis.
Most foreign nationals working in Denmark are covered by the social security system from the time they take up employment, although for some benefits there is a minimum period of residence requirement. EU/EEA nationals, and other foreign nationals whose countries’ have a social security agreement with Denmark, can opt to remain covered by the social security system in their home country, in case of living and working in Denmark on a temporary basis.
The general rule is that you are covered by social security in the country in which you are resident. If you are subject to only limited tax liability, you are covered by social security in the country in which you are working. If you are working in several countries, of which one is your country of residence, you are covered by social security in the country of residence.
The rules governing social security are set out in Regulation (EEC) No. 883/2004 and are administered by the www.borger.dk which can be contacted for further information.
Special rule Denmark/Sweden – those working at home may be eligible for an exemption from social security in their country of residence. For further details, please click here.
Changes in 2017
Tax system in Denmark has applied a change of the health contributions, which decreased from 3% to 2% and will be phased out until 2019.
Please see below changes in 2017:
- Personal allowance (over 18. Year) – 45.000 DKK.
- Bottom-bracket tax – 10.8%.
- Health contribution – 2%.
- Lower limit for top-bracket tax (after deduction of labour market contribution from income) – 479.600 DKK.
- Progression limit for share income – 51.700 DKK.