# Should I pay myself salary or dividends from my Danish ApS?

Last updated: 1 June 2026
Country: Denmark
Category: income-tax

**Quick answer:** Most Danish ApS owner-managers pay themselves salary up to the topskat threshold (DKK 568,900 in 2025, or approximately DKK 638,000 pre-AM-bidrag gross), then extract remaining profits as dividends at 27%/42%. Dividends avoid the 8% AM-bidrag and top income tax rates, making the effective rate significantly lower.

## Detailed explanation

## The Salary vs Dividend Question for Danish ApS Owners\n\nFor the owner-manager of a Danish ApS, how you extract profit from the company determines your total tax bill. The optimal approach almost always involves a **combination of salary and dividends**, not one exclusively.\n\n## How Salary (Løn) Is Taxed\n\nSalary paid from the ApS to the director-shareholder is taxed as personal income:\n\n1. **AM-bidrag (8%)**: Applied first on gross salary. DKK 600,000 salary → DKK 48,000 AM-bidrag. The net (DKK 552,000) is the basis for income tax.\n2. **Income tax**: Applied on the net (post-AM-bidrag) amount:\n - Personal allowance: DKK 49,400 exempt\n - Bottom bracket (bundskat): 12.06%\n - Municipal tax: ~25% (varies by municipality)\n - Church tax: ~0.7%\n - Top bracket (topskat): 15% on income above DKK 568,900\n\nAt the top marginal rate, total effective rate on gross salary: approximately **55.9%**.\n\n**From the company's perspective**: salary is fully deductible, reducing the company's selskabsskat liability by 22% of the salary amount.\n\n## How Dividends (Udbytte) Are Taxed\n\nDividends from an ApS are taxed as **aktieindkomst** (share income): a separate Danish income category taxed at:\n\n- **27%** on the first DKK 61,000 per year (DKK 122,000 for married couples, 2025)\n- **42%** on amounts above DKK 61,000\n\nCritically: **no AM-bidrag on dividends**. Dividends are not employment income and are not subject to the 8% AM-bidrag.\n\nHowever, from the company's perspective: dividends are paid from **post-tax profit** (after 22% selskabsskat). The effective total tax rate on dividends includes both the corporate tax and the personal dividend tax.\n\n## The Combined Tax Rate Calculation\n\nFor DKK 100,000 earned by the ApS:\n\n**Extraction via salary**:\n- Company pays DKK 100,000 salary → saves DKK 22,000 selskabsskat\n- Employee pays DKK 8,000 AM-bidrag + approximately DKK 50,000 income tax (at top rate)\n- Total tax: approximately DKK 58,000 on DKK 100,000 of company profit\n\n**Extraction via dividend (above DKK 61,000 threshold)**:\n- Company pays 22% selskabsskat: DKK 22,000. Net DKK 78,000 available for dividend.\n- 42% dividend tax on DKK 78,000: DKK 32,760\n- Total tax: DKK 22,000 + DKK 32,760 = DKK 54,760 on DKK 100,000, slightly better than salary at the top rate\n\n**Extraction via dividend (below DKK 61,000 threshold)**:\n- Company pays 22% selskabsskat: DKK 22,000. Net DKK 78,000.\n- 27% dividend tax on DKK 78,000: DKK 21,060\n- Total tax: DKK 22,000 + DKK 21,060 = DKK 43,060 on DKK 100,000, significantly better\n\n## The Optimal Salary Level\n\nThe commonly used strategy is:\n\n1. **Pay salary up to the topskat threshold**: DKK 568,900 (net of AM-bidrag) in 2025. In gross terms, this equates to approximately DKK 618,000-638,000 gross salary (depending on municipality). This maximises use of the lower income tax brackets while keeping the ApS deduction.\n\n2. **Retain additional profit in the ApS at 22%**, then distribute as dividends when needed.\n\n3. **Utilise the 27% dividend threshold**: Each year, DKK 61,000 (or DKK 122,000 for married couples) is taxed at only 27%. Take this amount every year to make use of the low-rate threshold even if personal income needs are otherwise met.\n\n## Pension as an Alternative\n\nBefore distributing dividends, consider employer pension contributions. The company contributes to a pension scheme on the director's behalf: fully deductible for the company (saving 22%), no AM-bidrag, no immediate income tax for the director. Tax is deferred to pension payout, typically at retirement when income is lower. For many owner-managers, pension contributions are more efficient than both salary and dividends for amounts above the topskat threshold.

Source: https://skat.dk/borger/indkomst/aktieindkomst

## Real-world examples

### Optimal extraction at DKK 1,500,000 company profit

Lars's ApS earns DKK 1,500,000. His strategy: pay DKK 630,000 salary (just below topskat threshold gross), contribute DKK 100,000 to pension, retain DKK 770,000 in the ApS at 22% (DKK 169,400 selskabsskat). Net-of-corporate-tax: DKK 600,600. He takes DKK 61,000 as dividend (27%). Remaining DKK 539,600 stays in the ApS for future extraction or reinvestment.

### Married couple using combined dividend threshold

A married couple both own shares in their ApS. Combined dividend allowance at 27%: DKK 122,000/year. They distribute DKK 122,000 annually at 27% rather than letting it accumulate. Total dividend tax: DKK 32,940. On top of normal salary, this uses the low-rate band efficiently.

### Using pension over salary above topskat

Mette draws DKK 600,000 salary (near topskat threshold). Her ApS has additional profit of DKK 300,000. Instead of paying salary (55.9% marginal) or dividend (22% corporate + 42%), the company contributes DKK 300,000 to her pension scheme. No immediate tax. Tax deferred to retirement when her marginal rate may be 40% or lower.

## Common mistakes to avoid

- Paying all income as salary and missing the dividend tax rate savings: the 27%/42% rates on dividends are considerably lower than the 55.9% marginal salary rate
- Forgetting to take DKK 61,000 of dividends annually at 27%: this threshold is use-it-or-lose-it each year
- Not considering employer pension contributions as a more efficient extraction route than dividends above the 27% threshold
- Paying too much salary and inadvertently triggering topskat on amounts that could be more efficiently distributed as dividends

## Frequently asked questions

### What is the aktieindkomst threshold in Denmark for 2025?

The low-rate (27%) aktieindkomst threshold for 2025 is DKK 61,000 per person (DKK 122,000 for married couples filing jointly). Dividend income above this threshold is taxed at 42%. These thresholds are adjusted annually by SKAT.

### Do I pay AM-bidrag on dividends?

No. AM-bidrag (8%) only applies to employment and self-employment income. Dividends from shares (aktieindkomst) are not subject to AM-bidrag: they are taxed separately as aktieindkomst at 27%/42%.

### Can my company pay dividends at any time?

The company can pay ordinary dividends (udbytter) through a formal board/shareholder decision. Interim dividends (aconto udbytter) can be paid during the year based on an interim balance sheet. All dividends must be reported to SKAT by the company.

### Is it better to take salary or dividends if I have a loss-making year?

If the company makes a loss, salary payments reduce the loss further (salary is deductible). In a loss year, there is no profit available for dividends. A salary draw in a loss year creates a larger company loss that can be carried forward to offset future profits.

### How does the topskat threshold affect the salary decision?

Topskat (15%) is triggered when personal income (after AM-bidrag deduction) exceeds DKK 568,900. The threshold-optimised strategy is to draw salary that keeps you just below this level, so all income is taxed at the lower bundskat + municipality rate (approximately 37-38%) rather than the 15% topskat plus the lower rates.

## Practical tips

- Calculate your topskat threshold salary at the start of each year: take DKK 568,900, add back AM-bidrag (divide by 0.92), to find the gross salary cap: draw salary to this level and no more from a pure tax-optimisation perspective
- Never forget the annual DKK 61,000 dividend threshold: consider declaring at least this amount of dividends every year even if you do not need the income, as the 27% rate is much more efficient than distributing later when funds are larger
- Model three scenarios with your revisor: all salary, salary to threshold plus dividends, salary plus pension: the optimal mix changes with your personal circumstances and family situation
- If you have a spouse who is a shareholder but does not draw salary, they can also take DKK 61,000 dividends at 27%, doubling the household low-rate usage to DKK 122,000

## Related questions

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- [What is the corporate tax rate in Denmark?](https://accounts-os.com/dk/questions/corporate-tax-rate-denmark-dk)
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