Employment Tax

Denmark | Relaxation ot the Danish expat tax – the salary threshold for 2026 is now confirmed

Summary

The Danish tax authorities have confirmed the 2026 salary threshold for the expat tax regime (the so-called 48E tax). As anticipated, the threshold has been significantly lowered, making it easier for more employees to qualify for the favorable flat-tax scheme. The confirmed change, effective from January 1, 2026 creates new planning opportunities for employers, particularly those offering net salary arrangements.

The detail

48E Salary Threshold

The 48E-tax regime allows qualifying inbound employees to benefit from a flat tax rate of 27%, exclusive of the mandatory 8% labor market contributions (AM-bidrag), for up to seven years. One of the key eligibility requirements is meeting a minimum monthly gross salary threshold, which is adjusted annually under the PSL § 20 regulations.

As part of the 2025 tax adjustment updates, the Danish tax authorities have now confirmed that the salary threshold for 2026 will be DKK 65,400 per month – a significant reduction from the 2025 threshold of DKK 78,000. This confirmed decrease broadens access to the regime and may enable more employees to qualify, particularly those who previously fell just short of the required salary level.

The lower threshold is expected to be especially relevant for new joiners in 2026, as well as those who may become eligible through structured compensation arrangements made in the latter part of 2025.

Planning Opportunities & Considerations

With the lower threshold confirmed, employers should access current and upcoming assignments to identify planning opportunities. In particular:

• Hiring in late 2025/ early 2026: If a new joiner does not meet the 2025 threshold but will meet the 2026 threshold, you may consider implementing a guaranteed payment in 2025 (e.g. relocation allowance) to ensure 48E eligibility.
• Structuring Relocations Packages: Certain non-cash relocation benefits (e.g. temporary housing shipping) can be converted into taxable cash allowances, helping employees meet the threshold.
• Contractual Clarity: Any structured compensation should be clearly documented in employment contracts and should include appropriate clawback language when necessary.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Jane M∅ller Fenger
Partner,

Per Ørtoft Jensen
Partner

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