Salaries in Denmark – How Much Money Can You Earn?

This article provides an overview of salaries in Denmark. For you as an expatriate, it can be relevant to get an impression of the salary levels to expect in Denmark compared to those of other countries around the world. In this comparison, the average level of salaries in Denmark is quite high, before as well as after tax.

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This article also examines salary levels across various job types and professions. With labor shortages becoming more pronounced, employers are increasingly turning to international recruitment to fill gaps in high-demand skills. The article identifies and describes the skill sets and job categories currently experiencing scarcity.

Salaries in Denmark compared globally.

The table below provides an overview of average monthly wages in selected OECD countries plus Brazil and India.

Table: Average monthly wages in selected countries.

Note to the table: The data is from an OECD study. Average wages – OECD. Wages are measured differently from the method used by Statistics Denmark, referred to below. Some wage elements in the statistics from Statistics Denmark are not included in the OECD statistics. But it is still the best statistic for comparison across all Western countries, so average wages are measured by the same method for all 38 OECD countries. Average wages are adjusted for different price levels by using the PPI conversion. Annual wages are then converted to monthly figures by dividing by 12. For Brazil and India – which are not OECD countries- the average wages before tax are from another source (“timecamp.com”). This study measures salaries by a different method, and the figures are therefore not directly comparable with those from the OECD study. But the data still provides an indication of salary levels for these 2 countries, which are relevant countries to include in this context.

Salaries in Denmark are high

Denmark’s average monthly wages are the 9th highest among the 38 OECD countries and 18% higher than the OECD average. So salaries in Denmark are in the high end among the Western countries in OECD.

Also, when looking at average salaries after tax, Denmark is in a good position. Average monthly salaries in Denmark after tax are the 8th highest among the 121 countries covered in the cost of living study from Numbeo: Cost of living study – Numbeo. So, despite relatively high income taxes in Denmark, the average salary after tax is also in the high end globally.

Important benefits for workers that you don’t see on the monthly paycheck.

Besides the average wage you can expect to earn in a given country, things like work-life balance or how many hours you work on average per month also matter when comparing the overall attractiveness of a country. As described in this article about working week, Denmark has one of the shortest working weeks and the best work-life balance.

In Denmark, you also get at least 5 weeks of paid holiday (and for some groups even 6 weeks) besides the official public holidays. And very good conditions for absence because of sickness or maternity leave. Conditions such as these and also the norm of 37 hours of work per week are agreed upon in collective agreements between unions and employer organizations.

Moreover, the salary package is accompanied by a high degree of job security and extensive social benefits, including health care, education, and relatively generous unemployment insurance. There is full employment in Denmark, with a lack of labor in some areas. And the unemployment rate is around 3%. Therefore, the risk of getting unemployed for a longer period is generally very low.

These factors contribute to the overall compensation package, which goes beyond just the monthly paycheck. Hence, the wage figures are only a part of the overall picture of a worker’s financial well-being in Denmark. Taking into consideration these additional factors, Denmark stands out as a favorable place to work and live.

Actual salaries in Denmark depend on several things.

The average employee in Denmark earns DKK 46,972 per month before taxes as of 2022, according to Statistics Denmark. The amount includes pension contributions. This is an overall average, and the actual earned salary differs a lot. But the variation between high and low earners is much higher in many other countries, such as the USA. Half of the Danish employees earn between 35.700 DKK and 55.000 DKK per month. A quarter part earns less than 35.700 DKK while the last quarter part earns more than 55.000 DKK.

Historically, the annual growth rate in salaries in Denmark has been around 2-3% with some fluctuations. The growth rates in real wages in the long run depend particularly on increases in employee productivity and economic growth.

Salary levels differ between sectors, industries, and types of occupation. But also education level, work experience, and geographical location within Denmark impact the wage level. Besides, there are differences in average salaries between men and women. Lastly, legislation concerning taxation can influence take-home pay for employees. The main points are described below.

Salaries in different professions and types of jobs.

In the table below, average monthly salaries in selected professions are shown. There are a total of 28 professions in the source data set. 15 of these have been selected to cover the most important job types across the salary spectrum.

Table: Average monthly salaries in selected professions.

Note: The monthly salaries are for 2023 and include pension, employee benefits and bonuses for employees without management responsibilities. Overtime payment is not included in the figures. The data source is: Monthly salary in different jobs – CEPOS and Statistics Denmark.

As the table shows, there are quite a few differences in the salaries in Denmark depending on the specific profession. To get an impression of the net monthly salary on the paycheck, income taxes shall be taken into account. So the actual tax payment will depend on income levels and allowed deductions in each case. Danish income taxes have progressive rates and are relatively high in international comparison. The average effective tax rate on income in Denmark is calculated to be 36% as of 2022 by OECD. You can read more about income taxes in this article: Income taxes in Denmark.

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The professions with highest salaries in Denmark often also require the highest level of education. Scarcity and recruiting difficulties from employers perspective is important in many of these professions. In the middle salary range from 35.000 DKK to 55.000 DKK there are a variety of professions in the private as well as public sector. Here you find many professions which require middle level education called skilled workers. Such as Electricians and auto mechanics.

Jobs with the highest salaries in Denmark.

Employees with management responsibilities are not included in the table above. Chief executives and senior officials in larger private companies have in general the highest salaries. And higher than the highest salaries reported in the table above.

Professions and job types known to have the highest salaries include IT-specialists, lawyers, finance and management consultants, specialists in the pharmaceutical and energy industries and some types of engineers. This is due to a combination of high demand and scarcity in supply for these types of skills

To be among the 10% with highest earnings, an income of 68.000 DKK per month or more is required. The statistic behind this metric measures total personal income. So besides salaries it also includes other types of income such as capital income.

Salaries in Denmark are highest in the industries Finance and IT.

The finance and insurance industries have by far the highest average salaries in Denmark at around 65,000 DKK per month. Along with the information and communication industries, it is here that many of the highly educated specialists in scarcity and high demand are working. Such as IT specialists, financial and management consultants, etc.

Many of the other industries (such as manufacturing, agriculture, and construction) are demanding other job types with often lower education levels. But the public sector also hosts many highly educated employees (such as administrative professionals, doctors, academics, and teachers). The average salaries in these industries are more modest, in the range from 41,000 DKK to 50,000 DKK.

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In general, the public sector does not pay as high salaries for highly educated persons as private companies do. Often, companies have more economic resources available in terms of salaries and other benefits to offer in the recruitment process.

The gender wage gap still exists – women earn on average less than men.

In the public sector, men earned on average 45,407 DKK per month and women 40,487 DKK per month as of 2021. In the private sector, men earned on average 47,798 DKK and women 42,475 DKK. So the gender wage gap still exists.

The gender wage gap has been gradually declining over the last decades. The main reason for the gap is occupational segregation: Women are more likely to work in lower-paying sectors such as care and education, while men are more represented in higher-paying sectors like IT and finance. Women in Denmark are also more likely to work part-time or take career breaks. Lastly, some unconscious gender biases among employers may still exist. Suc biases can influence hiring, promotion, and compensation decisions.

Salaries are highest in Copenhagen.

Average salaries are approximately 20% higher in the Region of Greater Copenhagen than in the 4 other regions of the country according to official statistics.

Most of the high paying jobs and industries are concentrated in greater Copenhagen. And companies within manufacturing, transportation and agriculture, – with lower salaries for workers – are mostly placed in Jutland. But the other larger cities (Aarhus, Odense and Aalborg) also host larger private companies offering attractive salary packages.

Skills and types of jobs where lack of labor is present.

The so-called skilled workers are generally in high demand and scarce at present time. This group includes professions as electricians, carpenters and auto mechanics. They have gained significant improvements in salary levels recently compared to highly educated as well as unskilled workers. One reason for this scarcity is that many school students choose long university educations instead of the shorter ones to become a skilled worker.

The issue of scarcity (or problem from the employers’ perspective) also applies to groups employed in the public sector. Such as nurses, social and health assistants, and kindergarten workers. This is beginning to be reflected in salary levels. Generally, though, wages in the public sector are more sticky and adjust more slowly to new circumstances than wages in the private sector. The government has recently extraordinarily lifted the salary levels for some selected groups of public sector employees. Finally, there are the above-mentioned high-earning job types IT-specialists, engineers, specialists in pharmaceutical and energy industries, etc., where a lack of labor is present.

Foreign workers are increasingly the solution to the lack of labor problem.

Employers increasingly recruit workers with the relevant skills from other countries when faced with the problem of a lack of labor. Mostly within the European Union – where labor can move freely – but increasingly also from countries outside the EU. And so the foreign workforce accounts for a steadily increasing part of the workforce. As of 2023, there were 318,000 full-time employees from other countries. This amounts to 15% of the total number of full-time employed persons in Denmark and contributes 12% of GDP.

Foreign recruitment is facilitated and supported by the government through legislation and tax schemes such as the Expatriate Tax Scheme.

For workers coming from countries outside the EU, this is primarily regulated by the so-called Amount Scheme (“Beløbsordningen” in Danish). To get a permanent residence permit, this rule states that your yearly salary, including pension, must be at least 487,000 DKK as of 2024. The permit is valid as long as employment in the job lasts.

Conclusion

Salaries in Denmark are quite high compared internationally, also when measured after tax. When you also consider the Danish work-life balance, Denmark stands out quite favorably from an employee’s perspective. This includes a relatively short working week and at least 5 weeks of paid holidays per year.

Moreover, the salary package is accompanied by a high degree of job security and extensive social benefits. This includes health care, education, and relatively generous unemployment insurance. And also good conditions in the absence from the job because of sickness or maternity leave. In this overall picture, Denmark is an attractive country to work and live in.

There are significant variations in salary levels depending on job type or profession, work experience, education level, and industry or sector. Although this variation is not as big as in many other countries, such as the US.

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Lack of labor and scarcity are important in some professions and skill types. For professions with high education levels, this applies to IT-specialists, engineers, finance and management consultants, and professionals in the pharmaceutical and energy industries. The result in practice has been higher salaries for these types of jobs. Scarcity is also present among skilled workers in the private sector. And resulted in increased salary levels for this group relative to other groups of employees. In the public sector, there is a lack of workers in professions such as nurses, social and health assistants, plus pedagogues

The foreign workforce is therefore increasingly important for employers in the recruitment process. And by now, workers coming from other countries constitute around 15% of the total of full-time employed workers in Denmark.

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Steen Andersen

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