A lot of the doctors we talk to daily have heard of the Danish tax system.
Let us just say the attitude towards paying 39-41% in taxes is always positive. We offer many great jobs in the Danish health care system, but some people fear moving to a country with such high tax payments.
But how come Danes happily pay these high taxes? And is there a connection between being one of the happiest countries in the world and paying high taxes?
Obviously, there is not a direct connection. Paying taxes does not make you happy. But the outcome of living in a welfare state who offers everyone equal care and money for going to school, if you are sick, having a baby and retiring could make you happier.
A real welfare system
The high tax rates in Denmark are often mentioned as one of the biggest objections against the Danish welfare system. However, Danes happily pay them with satisfaction. Danes are some of the happiest people in the world.
The Danish welfare state is based on the concept that every citizen has equal access to the services paid for with tax. That includes
- Everyone must be able to get help in situations such as unemployment or illness.
- All children must attend school and have the possibility of completing an education.
- All citizens must have access to information and guidance (for example from libraries and media).
- The public sector provides numerous services.
The Danish tax system is progressive, meaning the more you earn the more you pay. In Denmark, there is a saying that “Those with the widest shoulders have to carry the heaviest burdens.”
The benefits you get from paying taxes
Danes pay around 39-41% of their income as taxes. Here is how the money is spent.
Education:
School systems in Denmark are tuition-free. Including university. Any individual can explore their field of interest without being worried about whether they can afford it or not.
Student Grants:
Not only is the school tuition-free but each university student is also given around 900 dollars per month from the state to help pay for student life, accommodation, food etc.
Parental Leave:
In Denmark, new parents can enjoy up to 52 weeks (about 12 months) of paid leave when they have a child. In Denmark, new parents can enjoy up to 52 weeks of paid leave when they have a child. The mother is entitled to four weeks prior to the birth, and 14 weeks (about 3 months) afterwards. The father is entitled to two weeks following the birth, and then an additional 32 weeks (about 7 and a half months) can be split between parents.
Annual leave
You get 5 weeks of vacation each year to spend time away with family and friends.
Health care
In Denmark you have universal access to healthcare. It is free and equal healthcare for all who need it.
Childcare
Danish parents pay 30% of the nursery fees for their children. The rest of the amount is paid by the welfare system. This allows parents to start working as soon as they wish without worrying about how to pay for childcare after having their baby.
Pension and elderly care
When you reach 65 years old you will receive a pension of approximately 743 dollars per. Month. If you do not have an additional income, you will receive other benefits such as lower medicine prices and tax rates.
When you are over 80 you are entitled to home visits.
For Danes, these benefits do in general outweigh the high tax payments. What do you think? Could you live in a welfare state like Denmark?
Who pays taxes?
Every citizen in Denmark pays taxes. It also applies if you:
- have your own business
- are unemployed and receive benefits from your unemployment fund or from the state
- are students and receive state education grants
- are retired and receive pension(s)
- work abroad or have income from abroad while living in Denmark
If you are interested in a more in-detail introduction to the Danish tax system for non-Danish speakers, you can check it out here.