How to report tax for hiring-out labour

The Danish company must withhold 8 % in labour market contribution (AM-bidrag) and 30 % in hiring-out of labour tax from the salary. If the withholding does not take place when settling with the employer (the foreign company), the Danish company must pay the taxes to the Danish Tax Agency (Skattestyrelsen) itself.

Calculate the hiring-out of labour tax (in DKK)

The gross income is used as the basis for calculating Hiring-out of labour tax and includes salary, bonus, commission, allowances, etc., including:

• Salary etc. during compensatory time off earned in connection with work performed in Denmark
• Holiday pay or holiday allowance earned from work in Denmark
• Travel and transportation allowances
• Value of free meals and accommodation if the employee is not considered to be traveling under travel rules
• Other types of taxable employee benefits

The foreign company/employer must document the employee’s gross income.

If the gross income is unknown, the hiring-out of labour tax must be calculated based on the invoice amount. The tax must be withheld from the payment to the foreign employer.

How to Report This

Work performed from 1 January 2023 onwards must be reported via eIndkomst. Hiring-out of labour must be reported in eIndkomst using:

• Income type 02 “Særlig beskatning” (“Special taxation”)
• Income code 132 “Arbejdsudleje – leje af udenlandsk arbejdskraft” (“Hiring-out of labour – hiring of foreign labour”)

Amounts must be entered into fields 13, 15, and 16, along with information on the foreign address, etc., of the Hred-out employee.

Payment of the Company’s Hiring-out of Labour Tax

The tax must be paid in DKK via the company’s tax account (skattekonto). To find the payment line, log in at skat.dk/tastselverhverv:

1. Log in to skat.dk/tastselverhverv
2. Select Skattekonto
3. Choose Stamoplysninger (Basic information)
4. You can now see the payment line