Cost of living in Denmark

The video introduces you to the topic about cost of living in Denmark. It also provides examples of the costs of living to be expected for a single person moving to Copenhagen – living in a rented room or apartment and using a bike for transportation. The article below describes costs of living in Denmark in more detail and the areas where Denmark stands out. 

Cost of living has been high on the agenda in most western countries in recent years. This is because of high inflation and interest rates which has increased the costs of living for the citizens. And so the situation has often been called a cost of living crisis. Wages have increased as well to compensate workers from the cost of inflation. And some groups of people have by now regained their purchasing power as it was 3 years ago while other groups have not.

The table below shows the cost of living for different countries as of midyear 2024. This is a good point of time to take a look, while inflation and the increase in wages and interest rates by now to a large extent has worked its way through the country’s economies. And are thereby reflected in the data about costs of living. 

Costs of living in Denmark are relatively high compared globally

The table below is based on the costs of living studies from Numbeo. This is the most relevant source of information, when it comes to comparing these costs across countries in the world. Cost of living data from Numbeo.

In the table, Denmark ranks as the 7th most expensive country in the world on the index without rental costs. Switzerland is at top and USA is number 9 among the 121 countries covered. India is one of the cheapest countries in the world to live in. Cost of living in India is, on average, 71.6% lower than in Denmark. With rental costs included, Denmark ranks as the 11th most expensive country and USA ranks as number 6. So the cost of living in Denmark is relatively high which is because of the high price and wage levels in Denmark. Throughout the article the estimates of living costs are for a single person.

Western and European countries are generally the most expensive countries to live in. High costs of living in a country is generally accompanied by relatively high salary levels in that country. So in a country with high costs of living, the purchasing power as a consumer (how much you can consume of goods and services on average) is not automatically lower because the country often also has relatively high salaries. This is taken into account in the Purchasing Power Index also shown in the table.

How to compare countries in the table below

If you as a foreigner are considering moving to one of the countries listed in the table and you know approximately the level of monthly salary that is relevant for you  – independent of the country looked at – it makes sense to look at cost of living indexes and amounts and compare this between countries. Alternativelly if you want to compare how much you can expect to consume of goods and services while earning yourself the average salary of that country, the column with PPI is the one to look at.

Tabel: Cost of living index and amounts in selected countries

Note: The numbers in brackets for each country is the ranking on the index for cost of living without rental costs. Cost of living indices are relative to New York City (NYC), with a baseline index of 100% for NYC. Rental costs is rent per month for an apartment with 1 bedroom in the city center of larger cities of the country. 

But salaries are also relatively high and so the purchasing power is quite high in Denmark

Average monthly salaries after tax is 3.639 $ in Denmark as of 2024. This is the 8th highest level of salaries in the world. USA ranks as number 4 from the top and India as number 64 on this parameter. For India the monthly salary is 624$ after tax.

So salaries in Denmark are in the high end compared internationally. The figures are after tax and with average costs of living including rental costs in Denmark at 2359$ the average salaries allows for good consumption possibilities while still having a nice buffer in the monthly budget at around 1.280$ (3.639$ – 2.359$). And keeping personal finances healthy without creating debt. More on salary levels in the article about income taxes. Taxes

For India as an example the average salaries of 624$ only creates a surplus in the monthly budget at 77$ (624$-547$).

Denmark scores 127,2 on the PPI which means that the average Dane can consume 27,2 % more goods and services than the average citizen in New York City (the baseline of index 100 in the study).

The average hours of work per week (or month) in Denmark is also shorter than in many other western countries. So it takes fewer hours to earn this average salary in Denmark. This is mainly due to relative high productivity in a well educated workforce. Taking this into account the situation regarding salaries and purchasing power in Denmark is even more favorable from the employee’s perspective. The Working Week in Denmark and Facts You Need to Know.

All this taken under consideration, the cost of living in Denmark is not too high.

Cost of living in Denmark – Housing costs in Denmark

Housing costs are an important item in the monthly budget for most citizens and are estimated to account for an average of 19% of disposable income in the EU as of 2021.

The housing market differs between private houses and rental apartments. Housing costs are generally a larger burden for tenants than for house owners paying the housing costs in the form of mortgages. This is partly because the income of tenants households are often lower than the household incomes of homeowners. Nearly all (detached) houses in Denmark are owned by the individuals living in the house while a large share of the apartments are for rent. 43% of Danes live in a rented apartment or house while 57% are homeowners. 

Rental costs in rented apartments

Average cost for rented apartments in Denmark is ranked as 16th highest in the world in the Numbeo study. Rental costs are much higher in the USA. On average 32% higher than in Denmark.

There are 2  types of apartments for rent: 1) Apartments rented on the private market and 2) apartments rented out and administered by public housing companies. The two types each constitute around half of the number of rented apartments.

Privately rented apartments

The rent for a smaller 2-room apartment on the private market is around 6.000 DKK on average and highest in Copenhagen where it can be up to 11.000 DKK. In the other larger cities the rent can be around 5.000 DKK and outside the larger cities even lower. Mostly expenses for electricity, water and heating are not included in the reported rents. But sometimes they are.

Apartments to rent by public housing companies

The other type is social housing where apartments are owned and rented out by public housing companies. These apartments are generally cheaper to rent than private rentals. In the metropolitan area of Copenhagen they are also more difficult to get and you often have to be signed up as a member for several years before you are offered one. For the rest of the country and especially outside the larger cities it is often quite easy to get such an apartment without many years on a waiting list.

The average rent for a 60 m2 apartment is on average 4.500 kr per month as of 2023. For an 80 m2 apartment it is 6.000 DKK per year. Electricity and heating are not included in these rental amounts.

Denmark’s public housing is often regarded as among the best in the world, offering valuable opportunities that play a crucial role in your considerations of the cost of living in Denmark.

Rent subsidy from government

As a tenant in a rented apartment it is possible to get a rent subsidy from the government. The monthly amount you can get depends on your income, the rental cost, the size of the apartement and number of children in the household. For single persons  who are not pensioners, the average received rent subsidy is around 1.200 DKK per month. In households with children the subsidy is higher. The subsidy is not taxed. For low income groups the subsidy is a significant boost to the monthly budget.

Housing costs for homeowners – Denmark is the most affordable country in Europe to buy a home relative to income

The most affordable country in Europe to buy a home, relative to the average income, is Denmark – according to a new report by BestBrokers.com. It ranks countries as how many months of net salaries it takes to buy a 100 m2 property at its average price. For Denmark it takes 114 months which is the lowest in Europe. The affordability ranking is based on data examining the house prices, average net monthly income, inflation and  real mortgage interest rates, across 62 countries in the world as of 2024. It is generally more affordable to be a homeowner outside Europe. In the USA it takes an average of 76 monthly wages to buy a home.

Most affordable country to buy a home.

The big increase in interest rates and thereby expenses for mortgage payments in recent years has in Denmark as in most western countries made it relatively cheaper to rent than to own your own house.  Market prices for owned houses and apartments in Denmark are significantly higher in Copenhagen than the rest of the country. And thereby also monthly housing costs.

The cost of your housing is very important, when considering the cost of living in Denmark.

Cost of living in Denmark for families – Child care is a welfare benefit

As described above Denmark is a very affordable country to buy and own your house and property when earning an average income. This of course is more relevant for families moving to Denmark than for single persons but also many single persons are able to own their house or apartment. Just not in the area of Copenhagen.

Child care is an important cost for families in many countries. In Denmark expenses for Nursery and kindergarten for children younger than 3 is as a maximum 3.673 DKK without lunch and 4.331DKK with lunch included. For children 3 years and older it is 2.020 DKK without lunch and 2.762 DKK including lunch. These amounts are the maximum of up to 25% of the total child care cost that the parents can be liable for. The actual cost varies between municipalities and in some municipalities the actual costs for parents are lower.

OECD has calculated the net child care costs as a percentage of disposable income in each country for 2022. The USA is at top with a 4 person family using 40% of disposable income on average on child care. Denmark is 2th cheapest with only 2% of disposable income used on child care. The OECD average is 10%. Child care cost relative to income – OECD.

This big difference is due to Americans having to pay for child care services at the private market while in Denmark – where child care is a welfare benefit  – parents are only entitled to pay up to 25% of the expenses. So child care expenses are quite low in Denmark and favorable compared internationally.

The healthcare benefits are very important, when you take cost of living in Denmark under consideration.

Cost of living in Denmark for students. No tuition fees for international students from EU and EEA

In Copenhagen the monthly cost including rental costs is from 9.000 DKK to 13.000 DKK per month. For the other larger cities with universities, it is estimated to be around 7.500 DKK per month. Your actual monthly expenses can turn out much lower than this especially if you live in a smaller town.

For students, accommodation amounts to  an average of 36% of total monthly expenses. Accommodation costs can vary from around 3000 DKK in a dormitory through 3,500 DKK – 6000 DKK for a shared apartment and topping at up to 8000 DKK for a private apartment.  There is a lot to save by finding accommodation outside the city and pendling to university or education sites. But then plan for more cost on transportation. In Denmark, almost 50% of students use bikes to get to their university, while 30% use public transport. 

For international students coming from EU countries, Switzerland and the EEA countries (Iceland, Liechtenstein and Norway), Danish universities do not charge tuition fees so you significantly save on cost here. For others the fees can range between about 8.000 Euro and 18.000 Euro a year, depending on the programme.

Dental treatment is free for citizens in the age between 18 and 21 years. Health care services are free for individuals living in Denmark including international students.

Cost of Living in Denmark – Conclusion

The cost of living in Denmark is quite high compared to other countries globally due to high price levels. But also salary levels are among the highest and so your purchasing power. If you live in Denmark and earn an average income, you purchasing power is quite high. When also considering that the average working week or month – as of number of hours worked – is among the shortest, Denmark stands out nice and favorable in this area.

The actual cost of living depends of course on individual consumer behavior and circumstances. As in most western countries housing costs are a significant item in the monthly budget. Taking income levels into account, Denmark is actually the country in Europe where buying a house is most affordable. Child care is not a big expense for households with children as this is a welfare benefit provided by the government.

For international students accomodation is a large part of the cost of living in Denmark. Importantly though, students coming from EU and EEA-countries are not charged tuition fees. These fees amount to 8000 Euros up to 18000 Euros per year for international students from countries outside EU and EEA countries.

With reasonable management the cost of living in Denmark can be fairly low.