Gross to net Payroll Engine Denmark
G2N Nova is Denmark’s premier Gross-to-Net Payroll Engine, delivering 100% accurate payroll calculations for Denmark and over 100 other countries. Powered by a unified, real-time platform, it ensures seamless payroll processing without storing or accessing any employee-identifiable data.
Designed to meet Denmark’s stringent data privacy regulations, G2N Nova allows businesses to maintain complete control over sensitive employee information within their own systems. This cutting-edge payroll solution performs complex gross-to-net calculations securely and efficiently, without requiring access to personal data.
Discover how G2N Nova can streamline payroll for your business. Request a demo today!
Gross to net payroll tax engine for Denmark
Are you looking for the latest payroll tax updates in Denmark? Powered by G2N’s Payroll Tax Engine Denmark, our cloud-based platform delivers real-time, continuous updates tailored specifically for Danish payroll. This SaaS tax engine seamlessly integrates with historical payroll data in pay statements.
Your Objective
- Maintain your existing HCM/ERP/WFM software without switching to an external payroll solution.
- Partner with a provider offering a plug-and-play solution exclusively for payroll tax updates.
Solutions
- HCM/ERP/WFM Systems: G2N integrates effortlessly with all major HCM, ERP, Time, Pay, and Attendance systems, allowing organizations in Denmark to continue using their existing infrastructure without disruption.
- System Integrators: G2N enables system integrators to seamlessly add cross-border payroll functionality to their platforms. This simplifies international payroll management while giving integrators full control over the user experience, ensuring tailored and seamless payroll solutions for their clients.
- Enterprises: Simplify your payroll management with G2N’s unified platform. Eliminate processing headaches, free up valuable time to grow your business, enhance your products, or finally take that much-needed vacation!
- SMEs: Built for flexibility and growth, G2N scales effortlessly to accommodate your expanding workforce and evolving compliance needs. From 1 to 120,000 records, G2N ensures accurate real-time gross-to-net payroll processing, making it the perfect solution for small and medium-sized businesses in Denmark.
- Service Providers: Focus on what matters most to your clients and business with G2N’s seamless payroll processing platform, trusted by leading Fortune Global 500 companies.
How It Works
Input
- Employee Data: Captures essential details, including compensation, benefits, and personal information.
- Leave Management: Tracks and processes employee leave, absences, and time off.
- Time & Activity Tracking: Monitors work hours, attendance, and overtime for accurate payroll calculations.
G2N Nova Process
- Country-Level Filing: Integrates with statutory authorities to ensure accurate tax and social security filings in compliance with Denmark’s regulations.
- Country-Level Compliance: Adheres to local payroll laws, backed by an in-house compliance team ensuring full regulatory alignment.
- Global Payroll Engine – Gross-to-Net Computation: Delivers precise gross-to-net payroll calculations in real time, ensuring accurate payments and deductions.
Output
- General Ledger (GL): Provides detailed financial records for accounting and reconciliation.
- Treasury Management: Generates reports for effective cash flow and treasury planning.
- Bank File Generation: Prepares secure bank files for seamless payroll disbursements.
- Payslips: Issues detailed payslips outlining deductions, taxes, and net pay for employees.
G2N Nova is designed for flexibility, scalability, and compliance, offering a secure, real-time payroll solution for Denmark and beyond. It seamlessly integrates with existing systems, providing businesses with a transparent, efficient payroll experience.
Features of G2N Payroll Engine Denmark
G2N Payroll Engine Denmark provides precise gross-to-net payroll calculations, ensuring full compliance with Denmark’s tax and social security regulations.
Benefits
Streamlined Payroll Processing
G2N Payroll Engine Denmark ensures fast, accurate, and compliant payroll processing, featuring a powerful Tax Engine Denmark for precise tax and salary calculations.
Seamless Inbound and Outbound Integrations
Our platform integrates seamlessly with Denmark’s payroll and HR systems, enabling smooth data transfer, improving operational efficiency, and minimizing errors in payroll tax calculations.
Eliminate Manual Data Extraction
G2N automates data extraction, reducing manual effort and minimizing errors by eliminating the need for manual payroll data entry, powered by the Tax Engine Denmark.
Multi-Country Payroll Capabilities
G2N enables businesses in Denmark to manage payroll across multiple countries, ensuring seamless tax compliance and payroll processing with the advanced Tax Engine Denmark.
Everything you need to know about Gross to Net Calculation in Denmark
Following is the information required to calculate gross to net salary:
Working Location
Denmark’s tax rates and deductions can vary depending on the employee’s location. The calculation considers municipal tax rates based on where the employee resides or works.
| Aabenraa | Gentofte | Kolding | Rødovre |
| Aalborg | Gladsaxe | København | Samsø |
| Aarhus | Glostrup | Køge | Silkeborg |
| Albertslund | Greve | Langeland | Skanderborg |
| Allerød | Gribskov | Lejre | Skive |
| Assens | Guldborgsund | Lemvig | Slagelse |
| Ballerup | Haderslev | Lolland | Solrød |
| Billund | Halsnæs | Lyngby-Taarbæk | Sorø |
| Bornholm Regional Municipality | Hedensted | Læsø | Stevns |
| Brøndby | Helsingør | Mariagerfjord | Struer |
| Brønderslev | Herlev | Middelfart | Svendborg |
| Christiansø | Herning | Morsø | Syddjurs |
| Dragør | Hillerød | Norddjurs | Sønderborg |
| Egedal | Hjørring | Nordfyns | Tårnby |
| Esbjerg | Holbæk | Nyborg | Thisted |
| Faaborg-Midtfyn | Holstebro | Næstved | Tønder |
| Fanø | Horsens | Odder | Vallensbæk |
| Favrskov | Hvidovre | Odense | Varde |
| Faxe | Høje-Taastrup | Odsherred | Vejen |
| Fredensborg | Hørsholm | Randers | Vejle |
| Fredericia | Ikast-Brande | Rebild | Vesthimmerlands |
| Frederiksberg | Ishøj | Ringkøbing-Skjern | Viborg |
| Frederikshavn | Jammerbugt | Ringsted | Vordingborg |
| Frederikssund | Kalundborg | Roskilde | Ærø |
| Furesø | Kerteminde | Rudersdal |
Hours Worked
The total number of hours worked, including any overtime or additional shifts, directly impacts gross salary calculations.
Salary
- Gross Salary: The total earnings before any deductions, including bonuses, commissions, or additional allowances.
- Hourly Wage: If applicable, the gross salary is calculated based on an hourly rate multiplied by hours worked.
Employee Tax Rate (A-Skat)
A-Skat (income tax) is deducted from employees’ salaries based on their total taxable income and personal tax allowances.
Personal Exemption
Each employee is entitled to a personal tax allowance, which reduces taxable income before income tax (A-Skat) is applied.
Pre-Tax Deductions
Certain deductions are applied before calculating taxable income:
- PFA Pension Employee: Mandatory pension contribution deducted from gross salary.
- PFA Pension Voluntary Payment: Additional voluntary pension contributions made by employees.
- PFA Health Insurance: Employee contributions for private health insurance plans.
- ATP Pension Contribution (Fixed): The Danish Labour Market Supplementary Pension (ATP) contribution is deducted from salaries as a fixed amount.
Taxable Income Components
After pre-tax deductions, taxable income is determined:
- AM Tax Base (After ATP Deduction): The portion of salary subject to the Danish labour market contribution (AM-bidrag).
- AM Tax Base (Before ATP Deduction): The taxable salary before ATP contributions are deducted.
- Labour Market Contribution (AM-Tax): A mandatory 8% contribution deducted from gross salary before other taxes are applied.
Final Income Tax Calculation
Once pre-tax deductions and AM-tax contributions are applied, the final income tax base is determined:
- Income Base for Calculating A-Skat: The taxable income after applying deductions and AM-tax.
- A-Skat (Income Tax): The Danish income tax, which varies based on salary, tax exemptions, and personal deductions.
Tax Types
- A-tax (Income Tax): A-tax is deducted directly from salaries, pensions, and other income sources before disbursement. Employers or pension providers withhold the tax and pay it to the Danish Tax Agency (Skattestyrelsen).
- B-tax: B-tax applies to income not subject to automatic withholding, such as freelance earnings, business profits, or interest income. Individuals must pay this tax themselves in installments.
- State Tax: A progressive income tax paid to the Danish government, divided into bottom-bracket tax and top-bracket tax, depending on income level.
- Municipal Tax: All residents pay a local income tax to their municipality. Each municipality sets its own tax rate, which varies across Denmark.
- Church Tax: Members of the Danish National Church (Folkekirken) pay this tax, which funds church operations and maintenance. Rates vary by municipality. Non-members are exempt.
- Labour Market Contributions (AM-bidrag): A mandatory 8% tax deducted from gross income, used to fund labor market initiatives like unemployment benefits and job training programs.
- ATP Contributions: A compulsory pension contribution for all employees, deducted before income tax. Employees typically pay one-third, while employers cover two-thirds.
- Property Value Tax (Ejendomsværdiskat): Homeowners pay tax based on the assessed value of their property. Danes must also pay tax on any foreign property they own.
- Property Tax or Land Tax (Grundskyld): A local tax on landowners, calculated as a percentage of the property’s assessed land value. The rate varies by municipality.
Tax Rates
Denmark has a structured tax system that ensures compliance, social security funding, and employee benefits. Below is an overview of key tax rates, pension contributions, and benefits applicable to employees in 2025.
Tax Rates
| Tax | 2025 |
|---|---|
| Income from shares (graduated limit) | DKK 67,500 |
| Income from shares (tax rates below/above the graduated limit) | 27/42 % |
| Labour market contributions? | 8 % |
| Employment allowance (maximum)? | DKK 55,600 |
| Employment allowance (%)? | 12.30 % |
| Basic allowance deducted from positive net income from capital in the tax base for top-bracket tax | DKK 52,400 |
| Bottom-bracket tax? | 12.01 % |
| Additional employment allowance for single parents (maximum) | DKK 48,300 |
| Additional employment allowance for single parents (%) | 11.50 % |
| Compensation for higher green taxes (the 'green cheque') (others over 18)? | Abolished |
| Compensation for higher green taxes (the 'green cheque') (pensioners)? | DKK 875 |
| Tax deduction for home improvement services (labour costs) | DKK 8,600 |
| Tax deduction for household services (services) | DKK 17,500 |
| Job allowance (maximum) | DKK 2,900 |
| Job allowance (percentage) | 4.50 % |
| Anniversary bonus/severance pay (lower limit)? | DKK 8,000 |
| Personal allowance (18 years and over)? | DKK 51,600 |
| Personal allowance (under 18 years)? | DKK 51,600 |
| Outstanding tax (limit for inclusion)? | DKK 24,000 |
| Outstanding tax - interest on a daily basis from 1 January to 1 July? | Available late 2025 |
| Outstanding tax - additional interest charge? | Available late 2025 |
| Tax ceiling (personal income)? | 52,07 % |
| Tax ceiling (positive net income from capital)? | 42 % |
| Top-bracket tax? | 15 % |
| Top-bracket tax (lower limit after deduction of labour market contributions)? | DKK 611,800 |
| Other employment-related expenses (lower limit for deduction) | DKK 7,300 |
| Interest surplus on tax refunds? | Available late 2025 |
Pension Contributions
| Pension | 2025 |
|---|---|
| Old-age pension savings – up until 7 years before state pension age starting in 2025? | DKK 9,400 |
| Old-age pension savings – from 7 years before state pension age starting in 2025? | DKK 61,200 |
| Deduction for pension contributions, 15 years or less until state pension age (maximum) | DKK 26,816 |
| Deduction for pension contributions, 15 years or less until state pension age (percentage) | 32 % |
| Deduction for pension contributions, 15 years or more until state pension age (maxmimum) | DKK 10,056 |
| Deduction for pension contributions, 15 year s or more until state pension age (percentage) | 12 % |
| Top-up relief for pension contributions? | DKK 60,300 |
| Annuity pension scheme and temporary old-age pension (upper limit) | DKK 65,500 |
Employee Benefits & Deductions
| Employee benefits | 2025 |
|---|---|
| Employee benefits - specifially linked to your work (minimum amount)? | DKK 7,300 |
| Employee benefits - not specifically linked to your work (minimum amount)? | DKK 1,400 |
| Value of company car (calculated on minimum car value)? | DKK 160,000 |
| Value of company car (car value up to DKK 300.000)? | 22.50 % |
| Value of company car (car value exceeeding DKK 300,000)? | 22.50 % |
| Value of free holiday home (weeks 22-34) | 0.50 % per week |
| Value of free holiday home (remaining weeks) | 0.25 % per week |
| Value of free telephone, PC, Internet? | DKK 3,300 |
Request a Demo
G2N Payroll Denmark streamlines payroll processing with precise, compliant, and automated calculations aligned with Denmark’s tax and social security regulations. Our Gross-to-Net Engine ensures seamless integration, real-time accuracy, and strict data privacy without storing Personally Identifiable Information (PII). Scalable and efficient, G2N Payroll is the perfect solution for businesses managing local or multi-country payroll. Request a demo today.