What Salary Do You Need to Live Comfortably in Denmark?

Moving to Denmark is an appealing prospect for many, as it offers a high standard of living, excellent public services, and a vibrant cultural scene. However, it is essential to consider the financial aspects before making such a move, particularly in terms of the salary required to live comfortably in Denmark. This article explores what kind of income you’ll need, addresses common financial concerns, and offers tips for potential expats.

Is it Expensive to Live in Denmark?

Denmark is known for its high cost of living, particularly in urban areas like Copenhagen. Denmark’s average cost of living is significantly higher than the global average, with basic expenses like housing, food, and transportation taking up a considerable portion of one’s income. For example, renting a one-bedroom apartment in Copenhagen’s city centre can cost around 8,395 DKK to 17,490 DKK per month, depending on the location and quality of the accommodation. Meanwhile, the cost of groceries and eating out can add up quickly, making it essential to budget carefully. It can be harsh at first for a potential expat, especially if you still don’t have a fixed monthly income.

To live comfortably in Denmark, a single person would need a net monthly salary of approximately 21,438 DKK. This would cover basic living expenses, including rent, utilities, food, and transportation, with some disposable income left over for leisure activities. For a family of four, a net monthly income of 40,000 DKK is considered adequate to cover all expenses and maintain a comfortable lifestyle. It’s always advisable to have something in mind to help you settle or for any kind of emergency. If you haven’t got one yet, looking for job positions is one of the best options for a much more comfortable adaptability.

How Much Money is Required to Stay in Denmark?

Beyond the monthly salary, potential expats must consider initial moving costs and setting up a new life in Denmark. These expenses include securing housing, which may require a deposit of up to three months’ rent, and purchasing basic household items. Additionally, many expats might need to budget for private health insurance, as public healthcare is free but may not cover all needs, particularly for newcomers, who usually still do not have permanent residency.

When planning a move, it’s crucial to factor in the cost of obtaining the necessary visas and permits. Still, expats generally put aside other equally important expenses, such as the customs clearance and transportation of their belongings to their new home. Finding a reliable removal service at an affordable price is a must when relocating internationally. VanOne International Movers offers cheap European removals with a specialised team. Our services ensure that all your belongings are fully insured and safely transported, allowing you to focus on settling into your new home without worrying about logistics.

What Are the Financial Issues in Denmark?

While Denmark offers a high standard of living, it also comes with financial challenges, particularly for newcomers. The country’s high tax rates, which fund its comprehensive welfare system, can shock those unaccustomed to such a system. Income tax in Denmark can be as high as 55.9%, depending on your earnings, and VAT (Value Added Tax) stands at 25%, increasing the cost of goods and services. Understanding these tax rules is vital for financial planning in Denmark. If you can hire a tax expert familiar with Danish law and international tax treaties, chances are you’ll take advantage of the exemptions you are fitted to get. Your financial planning will have a much higher chance of success. See below some highlights of the scenario you might encounter:

• Full Tax Liability: If you become a resident, Denmark may tax you on your global income, with rates potentially reaching 55.90% in 2024. However, deductions are available, which can help lower the actual tax burden.

• Tax Liability Limitation: Non-residents who earn income from Danish sources—such as salaries, pensions, or property—may face taxes up to 55.90%. This applies even if you don’t live in Denmark full-time.

• Categories of Varied Income: Denmark taxes different income types separately, including personal earnings (like wages and self-employment), capital income (such as interest and gains), share income (e.g., dividends), and property values. The tax rate and deduction value differ depending on the income type.

• Tax Complexity and Deductions: The Danish tax system is intricate, with varying rates and deductions depending on your income. Deductions can significantly reduce taxes, but their impact depends on how the income is categorised.

Another financial issue to stress is the high cost of housing, especially in major cities. The housing market in Denmark is competitive, and finding affordable accommodation can be challenging. Rent prices are among the highest in Europe, and purchasing property is equally expensive, with prices per square meter in Copenhagen’s city centre reaching up to 40,000 DKK.

What is the Cash Rule in Denmark?

In Denmark, cash is still accepted in most places, but the country is increasingly moving towards a cashless society. Many transactions are done via card or mobile payment apps like MobilePay. This shift towards digital payments makes everyday purchases convenient. Still, it also means that having a Danish bank account and a payment card is almost essential for living in the country. Expats should know that cash is accepted but not the preferred payment method. Setting up a local bank account should be one of the first steps when settling in Denmark. Additionally, keeping some cash on hand for emergencies or situations where digital payments are unavailable is wise.

Adapting to Financial Life in Denmark: Tips for Expats

To adapt quickly to Denmark’s financial environment, potential expats should focus on a few key areas:

• Learn the Tax System: Denmark’s tax system is complex and significantly impacts your net income. Take the time to learn about the tax brackets, deductions, and benefits you’re entitled to, such as childcare subsidies or housing benefits.
• Budget Wisely: Given the high cost of living, budgeting is essential. Prioritise your spending and consider using budgeting apps or services that can help you keep track of your expenses.
• Utilise Public Services: Denmark offers excellent public services, including free healthcare and education. Register for these services when you arrive to take full advantage of what’s available.
• Explore Affordable Housing Options: While housing can be expensive, there are more affordable areas outside the main cities. Research and consider living in suburban or rural areas with lower rent but good public transport connections to the city.
• Shop Smart: Grocery shopping and dining out can be costly. Look for discount supermarkets, buy in bulk, and take advantage of sales and promotions. Cooking at home more often can also save a significant amount of money.

Relocating to Denmark with VanOne

If you’re planning a move to Denmark, VanOne can help make the transition easier. We specialise in international removals to Denmark and offer tailored services, including door-to-door collection and delivery, customs clearance, and ensuring that all your belongings are carefully managed. Our experienced team will handle the logistics so you can focus on starting your new life in Denmark. Contact us today and get a free quote.