Why is Denmark a high income country?
The economy of Denmark is a modern high-income and highly developed mixed economy. The economy of Denmark is dominated by the service sector with 80% of all jobs, whereas about 11% of all employees work in manufacturing and 2% in agriculture.
Denmark supports a high standard of living—its per capita gross national product is among the highest in the world—with well-developed social services. The economy is based primarily on service industries, trade, and manufacturing; only a tiny percentage of the population is engaged in agriculture and fishing.
Denmark is a unitary country and a member of the European Union. It is a high-income country with a very high human development level. Note: Data from Denmark refer to 2022, except for NEET (2021), poverty rate (2019), Gini coefficient (2019) and stakeholder engagement (2017).
There are reasons for this, among other things, the high rate of VAT of 25 percent and the high average income in Denmark means the costs can be greater! Denmark is a leader in the food industry with numerous slaughterhouses, dairies and grain mills.
The labour market is flexible, making it easy to hire and fire employees, and there is less litigation than in some other developed countries. Meanwhile, the business infrastructure is top-class, with reliable supplies of electricity and water and a well-developed financial system.
Denmark's current account balance in 2024 reflects a structurally positive outlook, driven by consistent surpluses in both the balance of goods and services. This stability is rooted in the economic structure, where a robust export sector and competitive service industries contribute to the overall positive trend.
Denmark is quite expensive to live in compared to other countries around the world when it comes to the prices of food and accommodation. However, free education and healthcare financed through taxes as well as proportionately higher salaries makes it more affordable to live here.
You need an annual income of at least 1.9 million kroner to be in Denmark's top one percent of high earners.
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Life expectancy for both women and men in Denmark has been on an upward trend since the 1990s. General improvements in public health and advanced healthcare options are credited for the longer expected lifespans.
What are the cons of living in Denmark?
- High cost of living (Copenhagen is one of the most expensive cities in the world)
- The taxes (high personal income tax rate)
- Learning Danish can be challenging (even though English is widely spoken, at least in the workplace)
Here are some examples to give you an idea of the price range in supermarkets. 1 liter (¼ gallon) of milk: $1.50 / 10 kr. 1 loaf of bread: $3 / 20 kr. 1 banana: $0.60 / 4 kr.
The “sugar tax” is based on the weight or volume of the product and not on the content of sugar. The current rates are DKK 24.61 (€3.57) per kilo of chocolate and sweets, DDK 6.61 (€0.89) per litre of ice cream and DKK 1.64 (€0.22) per litre of soft drink.
Why is Denmark so clean? Denmark leads in environmental innovation with a green tax reform in 1993, ambitious targets for reducing greenhouse gas emissions, and high reliance on wind power for over 40% of its electricity.
Denmark has been named the world's happiest country on numerous occasions, and remains to be very near top of the UN World Happiness Report, we're currently second.
The list of what Denmark is famous for ranges from impeccable modernist design to baroque palaces, a popular, long-reigning royal family to an equally popular quasi-anarchist Copenhagen community, and so much more. Above all, this small nation is proud of its welcoming spirit, which makes it a joy to visit.
Danish residents have universal access to a wide range of health services free of charge.
Economic Survey of Denmark - 9 January 2024
Headline inflation has fallen, but underlying price pressures remain high. While the public finances are robust with a budget surplus and low public debt, population ageing poses long-term risks to the social model, calling for efficiency gains at the local level.
Smaller base effects from energy
Lower prices from energy is still the main driver of the very low inflation in Denmark. In total, electricity, gas and fuel subtracted more than 2 percentage points to annual inflation.
Prices are also distorted by the 25% VAT/sales tax on almost everything, including food. Some items are surprisingly inexpensive in Denmark. Purchased in a supermarket, liquor is relatively cheap, as is beer and wine.
How much money do you need to live comfortably in Denmark?
| Total living expenses in Copenhagen | Average cost⁵ |
|---|---|
| 1 person, per month (without rent) | DKK 7,751 |
| 4 person family, per month (without rent) | DKK 27,961 |
| Utilities, basic, for 85m² apartment | DKK 1,408 |
Average Wages
In recent years, the average gross salary in Denmark has been consistently high, with monthly averages hovering around 40,000 to 45,000 Danish kroner (DKK) before taxes, which equates to roughly 5,400 to 6,100 euros, or 6,500 to 7,300 US dollars, depending on the exchange rates.
Yes, it's above average…after taxes this would probably be about 30.000 DKK still pretty much because most people make about 30–40.000 dkk before taxes are paid.
Occupations in Denmark with the highest average salaries 2022. Chief executives, senior officials, and legislators, is the occupational group in Denmark with the highest average monthly salaries. In 2022, people with this occupation earned 111,500 Danish kroner per month on average.
In the U.S., it may take you $5.81 million to be in the top 1%, but it takes a minimum net worth of $30 million to be considered among the ultra-high net worth crowd. As of the end of 2023, this ultra-high net worth population is on the rise, reaching 626,000 globally, up from just over 600,000 a year earlier.
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