Boost your pension before new tax rules
New tax rules offer a special opportunity for those earning between DKK 640,100 and DKK 776,500. The Danish Parliament has passed these new rules that change the thresholds for top-bracket tax and introduce middle-bracket tax and “top-top”-bracket tax.
If you earn between DKK 640,100 and DKK 776,500, there is an advantage to making extra pension contributions now. This is because you will receive a larger discount on your additional pension contributions than you would under the new rules when you end up in middle-bracket tax.
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With your income, you currently pay 15% in top-bracket tax. In about a year and a half, you will have to pay a so-called middle-bracket tax of 7.5% on the same income. This means that right now, you receive a top-bracket tax deduction of 15% on your pension contributions, instead of “just” 7.5% when the changes take effect – resulting in an economic gain. So, if your pension needs a boost, it is advantageous to make extra contributions now before the new tax rules come into force. |
Good news for those expecting to pay top-bracket tax as pensioners
If you expect to pay top-bracket tax on your employment income after 2026, the new tax rules mean that you can get more out of your pension savings. If your savings are so large that you also expect to pay top-bracket tax as a pensioner, you can look forward to the top-bracket threshold being increased. This means that you will have to pay middle-bracket tax of 57.5% instead of top-bracket tax on pension income up to DKK 714,500 (2024).