Top-top tax 2026 — Denmark’s new high-income bracket
From 1 January 2026, Denmark introduced a new top-top tax (top-topskat) of 20% on personal income exceeding DKK 2.5 million annually. This adds a fourth income tax bracket to the Danish system and pushes the marginal rate for the highest earners above 55%. Here is what it means, who it affects, and how it interacts with the existing tax structure.
What is the top-top tax?
The top-top tax is an additional income tax of 20% applied to personal income above DKK 2.5 million per year. It sits on top of the existing top tax (topskat) and applies only to the portion of income exceeding the DKK 2.5 million threshold. It was introduced as part of the 2026 fiscal budget to increase tax progressivity for the highest earners in Denmark.
The tax applies to “personal income” (personlig indkomst) — primarily salary, business income, and pension distributions. It does not apply to capital income separately, though capital income can push your total taxable income into the top-top bracket.
Fewer than 1% of Danish taxpayers earn above DKK 2.5 million annually. The top-top tax is primarily relevant for senior executives, certain medical specialists, successful business owners, and high-earning finance professionals. If your salary is below DKK 2.5 million, this tax does not affect you at all — your tax structure remains unchanged.
Full Danish income tax brackets — 2026
| Tax layer | Rate | Applies to | Threshold (2026) |
|---|---|---|---|
| AM-bidrag | 8% | All gross income (labour market contribution) | From DKK 0 |
| Municipal tax (kommuneskat) | ~23–27% | Taxable income above personal allowance | Personfradrag: DKK 54,100 |
| Bottom tax (bundskat) | 12.09% | Taxable income above personal allowance | Personfradrag: DKK 54,100 |
| Top tax (topskat) | 15% | Personal income above threshold | DKK 588,900 (approx.) |
| Top-top tax (top-topskat) | 20% | Personal income above threshold | DKK 2,500,000 |
The combined marginal tax rate for income above DKK 2.5 million is approximately: 8% AM-bidrag + 25% municipal tax + 12.09% bottom tax + 15% top tax + 20% top-top tax. However, this exceeds the tax ceiling (skatteloft) — see below.
Who actually pays top-top tax?
- Senior executives and C-level — CEOs, CFOs, and senior directors at large Danish companies whose total compensation (salary + bonus + benefits) exceeds DKK 2.5M
- Medical specialists — certain private-practice doctors and surgeons
- Business owners — entrepreneurs with high personal income drawn from their businesses
- Finance professionals — investment bankers, fund managers, and senior partners at consulting firms
- Athletes and entertainers — high-earning professionals in sport and entertainment
How top-top tax is calculated
The top-top tax is calculated on personal income (personlig indkomst) above DKK 2.5 million, after deduction of AM-bidrag (8%). Here is a simplified example:
Example: Gross income DKK 3,000,000
AM-bidrag (8%): DKK 240,000 → personal income = DKK 2,760,000
Top-top tax base: DKK 2,760,000 − DKK 2,500,000 = DKK 260,000
Top-top tax: DKK 260,000 × 20% = DKK 52,000
This is in addition to all other taxes (municipal, bottom, top tax) on the full income.
Tax ceiling (skatteloft) — the cap
Denmark has a constitutional-level tax ceiling (skatteloft) that limits the combined percentage of income tax that can be charged on the highest bracket. The skatteloft for 2026 caps the total marginal rate at approximately 52.07% (excluding AM-bidrag and kirkeskat).
In practice, this means the top-top tax may be partially absorbed by the ceiling. If your municipality has a high kommuneskat rate, the effective additional burden of the top-top tax may be slightly lower than the headline 20% because the ceiling constrains the total. Consult your tax advisor for the precise calculation in your municipality.
Interaction with forskerskatteordningen
If you are on the Danish researcher tax scheme (forskerskatteordningen), which offers a flat 27% rate (plus AM-bidrag) for qualifying foreign researchers and highly paid employees, the top-top tax does not apply to income taxed under forskerskat. The flat rate scheme replaces the normal bracket system entirely for qualifying income during its 7-year term.
However, once the forskerskat period ends (after up to 7 years), you revert to the normal Danish tax system, and the top-top tax would apply if your income exceeds DKK 2.5 million at that point.
Tax planning considerations
- Pension contributions: Voluntary pension contributions reduce your personal income and can potentially bring you below the DKK 2.5M threshold. The annual cap on tax-deductible pension contributions applies, so consult your advisor.
- Timing of bonuses: If possible, timing bonus payments across tax years can smooth income and reduce exposure to the top-top bracket in a single year.
- Company structure: Self-employed individuals may benefit from structuring income through a company (ApS/A/S) to control the timing and nature of personal income withdrawals.
- Forskerskat eligibility: If you are a foreign employee who has not previously lived in Denmark, the forskerskat scheme may be more advantageous than the standard system — particularly with the new top-top bracket.
The top-top tax is meaningful but not catastrophic. On income of DKK 3 million, the additional tax is approximately DKK 52,000 — significant, but Denmark’s public services, safety, quality of life, and work-life balance remain substantial offsetting factors. Several competing countries with lower tax rates offer materially lower quality of life. Make decisions based on the full picture, not a single tax line.