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Good salary but strangely: the benefits eat it up?

Last activity 03 December 2019 by Giuseppe&Mary

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Giuseppe&Mary

I’m an engineer and a Danish company has made me a good offer. They would pay 67000dk in order to achieve the limit for the expat special tax, which is great. In addition I’m being offered o whole lot of other benefits but I kind of got scared that all these benefits will be taxed and in the end the monthly income will reduce much? 
In addition I have free leasing car (but the tax value monthly about 5000dk) free gasoline and all repairs, free computer, phone and 100000dk for all the moving costs. I’m afraid that the first month I will pay more taxes than what I earn !
Can you help me figure out how will it work out?
I’m single and I should stay in Dk for the next five years on a project.

Nellie Berg

You'll be taxated of everything.  Fair enough, but don't fear.

Just to understand the system (don't take the figures seriously): The tax system is based on yearly figures. Due to your advance statement, you'll have a yearly income of 480,000 kroner, and you have to pay a yearly tax of 60,000 kroner.
Monthly pay 40,000 kroner - 5,000 kroner.

If you start working by April, your yearly pay will amount to 360,000 kroner and your yearly tax to 45,000 kroner. Still the same monthly amounts.

I hope that I have made this issue understandable?

/Nellie

Giuseppe&Mary

I’m not following you, I’m sorry. If I take 67000 for month, don’t I pay the resercher tax 32,8% anyway, not counting for how many months in a year I work?

Giuseppe&Mary

What I was trying to find out;
I have 67k dk per month gross, minus 33%, makes 45k net in month. But as I have all the other benefits on the top of the monthly salary, as the car and all the rest, will they eat a big part of the net salary? Car tax, relocation, computer, cellular and so no

Giuseppe&Mary

Isn’t reseacher tax available as soon as I get paid more than 66600 in a month? (Naturally fulfilling the rest of the requirements as not have been already working in Dk or being himself one of the owners of the company)  I don’t get the year calculation. If it would have been on year level, no expat reseacher or simply highly paid employee could  ever start working if not in January, if he wishes to benefit of this special tax treatment.
I do not understand nether the calculation you made 40000-5000dk, the 5000dk what would it be in this case? The leasing cars taxation value? Don’t I pay the Taxes of the taxation value, not the whole value?
Someone has some experience on these matters, as for me it is the first time being hired by a foreign company.
Thanks in advance.

Nellie Berg

As I told you, the figures were thought examples, meant to make the math easier to understand. Sorry, I failed.

Never mind:

The pay shall exceed 68,100 kroner in 2020 (after deduction of the ATP contribution).

If it would have been on year level, no expat reseacher or simply highly paid employee could  ever start working if not in January, if he wishes to benefit of this special tax treatment.
If you come to Denmark by April, work all the year, have a contract pay over 68,100, meet the other requirements, no problem. You work 9 months, you pay tax 9 months.
https://skat.dk/skat.aspx?oid=2244911

However, the tax system is based on a yearly income, but as you only work 9 months in that year, the result will be the same as above as we talk quota share (9/12).

Until now, Denmark has had another holiday than the rest? of the EU, you haven't had the right to a paid holiday, but have to pay for it yourself. If we say that you holiday all July, it means that you only get 8 months's pay that year, why you no longer meets the requirements for this special tax scheme.

The Danish Holiday Act
By law, all employees are entitled to take 25 holiday days per holiday year in Denmark, but not everyone is entitled to paid holiday days. Whether you are
entitled to paid holiday depends on how much paid holiday you earned during the previous calendar year.
I take that the employer will offer you a paid holiday this year, but if not, and you wish to holiday, it will influence your income, and you risk not to meet the requirements.
Unless all the fringes will be enough.

You have got an advantage offer, don't worry. Of course, you shall pay more tax , but it will be far, far more expensive if you should lease the car yourself, buy your own pc etc.

In your case, I would ask the HR precisely to tell you how much you'll get with or without the fringes as they know the exact value of these, and how they'll handle the relocation allowance (A or B income).

/Nellie

Giuseppe&Mary

Thank you very much for the time you spwnt explaining everything

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