Hello everyone,
I received a job offer to work in Denmark, and I’m confused about the pension system. The offer I received consists of a `base salary` \+ `pension` = `gross salary`.
When using income tax calculators ([like this for example](https://dk.talent.com/en/tax-calculator)), what is the value that I should input to estimate my net salary by the end of the month?
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I’m non-European, and I’ve been working in France for the past few years. There I never had this separation between salary and pension, the pension is just one of the taxes. Is there any reason it’s treated separately in Denmark?
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Thank you so much for your help!
4 comments
For tax purpose calculations you only use your base salary. For comparisons as a whole the gross salary tells more as pension is still money you are getting, they are just unavailable until you are old enough (or very heavy taxed if you want to withdraw them early).
Pension is almost always calculated as a percentage of base salary and presented as a whole in job offers. Or base salary + 15% pension.
In simple terms, your pension is excluded from your taxable income so if you want to know your monthly take home, you should use base salary.
I’ll give it a shot. Pension is usually included in gross salary since it’s still income that you get later (some jobs have HUGE pension contributions which is pretty relevant).
I don’t know how the pension system works in France but it might be a public one, tax funded? In that case of course it’s just a tax.
The Danish pension system works differently, we do have a (small) government tax funded pension dependent on how many years you have worked here. This is probably not super important to you unless you are going to work here for 30+ years from now on.
What is a bit more relevant are private pension schemes which is usually what you outline refers to.
Eg. monthly salary is 30000 DKK + 10% pension contribution so gross salary would be 33000DKK.
the 3000 DKK is not a tax, its your money going into your own tax advantaged account which is then invested according to rules you have some influence on.
So where in France (I think) you just pay a tax and then qualify for a pension, here the private pension contribution is your own personal money.
You can get your pension money paid out early but pay a heavy tax by doing it, but it’s still your money. If you don’t intend to retire here I don’t know if having a private danish pension is valuable to you. The system is probably heavily optimized for people who live here long term, so if you don’t plan to maybe look into alternatives if they exist.
I’ll just note that the tax calculator you have linked to have come up on this forum a few times before and it is prone to errors, especially regarding the top tax bracket. So I wouldn’t trust it. Try https://hvormegetefterskat.dk/en instead.