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From 2026, a new middle tax and a new top-top tax will be introduced, and for 2025 and 2026 a larger ...
November 20, 2023

New middle and top rate tax: The government's proposal for tax reform

The government proposes to introduce a new middle tax and a new top-top tax from 2026, and a higher employment deduction for 2025 and 2026.

The government's proposal for tax reform includes three main points:

  • A middle tax of 7.50% for incomes between DKK 618,400 and DKK 750,000 before AM contributions. In practice, this is a halving of the top tax rate for income within this range.
  • An additional top tax (top-top tax) for incomes above DKK 2.5 million before AM contributions.
  • An increased employment deduction for 2025 and 2026, with the rate increasing from 10.65% to 12.75%. At the same time, the maximum deduction is gradually increased by a total of DKK 11,400. - from DKK 44,800 to DKK 56,200.

The government has also set aside a financial framework of DKK 0.5 billion for further personal tax relief, which must first be negotiated politically.

Middle tax: Income between 618,400 - 750,000 DKK.

The introduction of the intermediate tax will apply to incomes between DKK 618,400 - 750,000 annually before AM contributions. This means an annual tax reduction of up to almost DKK 10,000, because "only" 7.50% tax will be paid instead of the current 15%.

Top tax: Income between 750,000 kr. - 2,500,000 kr.

The current top tax rate of 15% still applies to income between 750,000 kr. - 2,500,000 kr.

Top top tax: Income over DKK 2,500,000.

An additional top tax of 5% is introduced for incomes above DKK 2,500,000. Those who have to pay top top tax will also benefit from the tax savings on middle tax, but for incomes slightly above DKK 2,500,000, this will result in an overall tax increase.

Increased employment deduction for 2025 and 2026

The employment deduction is calculated based on your gross income before AM contributions plus pension contributions. For 2025 and 2026, the government wants to increase the percentage and maximum deductions.

  • For 2025, the percentage will be 12.3% and the maximum amount will increase to DKK 51,700. This is an increase of DKK 6,900 in the maximum deduction.
  • For 2026, the percentage is further increased to 12.75% and the maximum amount is increased to DKK 56,200.

Additional information

If you need advice or assistance in relation to tax returns etc. you are welcome to contact inforevision's tax department. You can read more about us here

Flemming Saabye
Head of the tax department
T: 39 53 50 38
fsa@inforevision.dk

Jannik Petersen
Tax advisor
T: 39 53 50 47
jpe@inforevision.dk