Working in Scandinavia means relatively higher payment/hour (compared to US and emerging countries), but higher taxes. While the US is battling whether or not to tax 36-39.5% to those with income of more than USD450.000/ year, I already ended up with 36% tax on my debut as first time worker with a beginner level of payment in Denmark. However, considering good quality life I have in Denmark such as free education, free health care, good public transportation and a safe and a very nice city of Copenhagen, I complain nothing. I would not say that I am super happy with this 36% numbers, but I can understand and voluntarily will to pay this portion of taxes for the sake of collective welfare in the society.
So, here it goes, my very first salary goes to SKAT, a Danish tax bureau. The tax includes 8% contribution to labor market and A-type tax. Everything is mostly online in this country, so I can always adjust my income and income deduction points (such as my annual payment to labor union and unemployment benefit insurance) all the year, as well as obtain my tax card online.
If one does not have tax card while earning money in Denmark, SKAT will take 55% of this type of income. And if one were caught to work illegally, of course the ending would be deportation and ban to come and work in Denmark for significant period of time.
One thing that I am happy about, SKAT explained on my tax card to which sectors in the society that portion of my money will be contributed to: Transparency. Although, one of my Danish friend told disappointingly that more than 30% of our tax goes for administration.
The lady from SKAT over the phone who helped me first time settling with my tax was also very nice and helpful. So, for you first time worker in Denmark, don’t hesitate to contact them, though the Danes prefer business and public-sectors’ system to be less human contact, less manual labor, and more online.
I have to say that paying tax in Denmark has never been a painful experience, especially if I remember that a lot portion of my sweat work in Indonesia will go to corruption in almost all sectors. I cannot endure this systemic pain.
Denmark maybe a little bit conservative when it comes to market economy (considering high taxes and sets of trade and environmental regulation companies shall meet), but in terms of social values, Denmark is quiet liberal: yes to same-sex couple marriage, yes to cross-religious marriage, yes to sexual expression, yes to marijuana (in Christiania only, and possibly Copenhagen), and yes to gender equality, including father leave for kids.
It may not be a perfect tax system, and there should be plenty of problems within Danish tax system, but at least it is relatively better than many countries (exclude the Scandinavian countries…they are pretty much awesome). Of course, “Things can always be better”, said my friend in our youth worker party organization. the ruling party in Denmark.
Yes, Scandinavia is a social democrat country. As a new Danish residence, I should say, Yes, i trust Danish welfare system (at least until now). And Yes, I am willing to let my first salary goes to SKAT and public tax, and will always be, everytime I receive my monthly paycheck.
In the end of 2012, Denmark begins to publish corporate tax publicly online to monitor business and transparency better.
And SKAT word being reversed is TAKS 😀
- Something puzzling in the state of Denmark (guardian.co.uk)
- Norway leads Scandinavia in foreigner employment (icenews.is)