Everyone who earns a salary subject to labour market contributions or who earns a business profit automatically receives an employment allowance.

  • The maximum employment allowance is 10.60% or a maximum of DKK 40,600 in 2021 (10.50% or DKK 39,400 in 2020).

Everyone who earns a salary subject to labour market contributions or who earns a business profit automatically receives a job allowance also.

  • The job allowance is 4.50% of income over DKK 200,300 or a maximum of DKK 2,600 in 2021 (3.75%, DKK 195,800 and DKK 2,600 in 2020).

The employment and job allowances are calculated as a percentage of your income. However, there is an upper limit to the allowance you can claim.

Employment allowance
Year              %                       Maximum allowance, DKK Minimum amount of salary you need to earn to be entitled to the full allowance
2020 10.50 39,400 DKK 375,238
2021 10.60 40,600 DKK 383,018

 

Job allowance rate
Year  %  Maximum allowance, DKK Minimum amount of salary you need to earn to be entitled to the full allowance
2020 4.50% of income above DKK 195,800 2,600 DKK 253,578
2021 4.60%  of income above DKK 200,300 2,600 DKK 256,822

The allowances are calculated automatically on your salary (including labour market contributions (AM-bidrag)) or on your business profit, for example.

If you are a single parent and are entitled to and receive additional child allowance according to the Child Allowance Act, you will receive an additional employment allowance of maximum DKK 23,400 in 2021 (DKK 22,900 in 2020).

If you become a single parent

Udbetaling Danmark will inform the Dansih Tax Agency (Skattestyrelsen) if you become a single parent. This means that you will receive the additional allowance automatically. Udbetaling Danmark informs us on a quarterly basis, and once we have been informed, you will receive a new preliminary income assessment.

Language

Please see our legal guide (in Danish) for further legal information.