Rude awakening: An encounter with Danish tax law

Thus far in my journey I’ve been enjoying many of the benefits of the social welfare state of Denmark without having to pay much in return: (mostly) free health care, affordable  public transport, steep student subsidies, etc. But after a paid gig tutoring undergraduates, the Danish powers that be decided it was time for me to pay up.

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For 7 hours of tutoring at 120kr/hour ($18/hour), I earned, as basic multiplication would have it, 827.40kr ($121). As I didn’t have a tax card, the Powers That Be decided to tax me at the default rate – that is, the maximum rate – which happens to be a whopping 58%. Of the 827kr that I earned, only 343kr ($50) made it into my bank account.

According to Couch Surfing Thomas, I paid 50% taxes, had money put into my vacation account, had tax collected from the vacation account and paid for market contribution. Harsh! (But seriously… what is this vacation amount and how do I find it?)

Anyway, it turns out that this was indeed a mistake, that you have to earn above a certain income threshold to be taxed like that, and that I will get a refund at some point. Still, that was scary!

As an American, I’m still not completely used to Scandinavian socialism and attitudes about work. Danes have one of the shortest work weeks of any nation, at 37 hours, and they also get more paid holiday and sick leave than Americans (34 days per year). There are also certain disincentives to work. For instance, while my American friends had certain love/hate or excitement/dread feelings about graduating from college – excitement at their level of educational achievement, dread at finding a job and paying back student loans – one of my Danish friends was just telling me how he was excited to graduate, so he could start collecting unemployment right away, which was three times as high as SU.

(SU is the money Danish students get from the government while they’re studying to live on. That’s right, not only is university free, they get PAID to study. Non-Danes are eligible for this as well if they work at least 37 hours/month. Danes don’t have to do anything to get it. When I first arrived in Denmark, it was about $1,000/month, but due to the dollar getting stronger it’s about $700/month. Just enough to live on in a city like Aarhus, more than enough in a small town, and “HAHA good luck if that even pays your rent” in Copenhagen.)

Anyway, our conversation went something like this.

Me: “Yeah, but have you ever had a job? Like, EVER?”
Dane: “Yeah, I worked in a supermarket one summer when I was 15.”
Me: “But you didn’t work at all while you were going to university?”
Dane: “No, I had to study.”
Me: “Yeah, I had to study, too. But I did it. I worked sometimes up to 30 hours a week, did an unpaid internship as well for two semesters, and still graduated with two degrees in four years.”
Dane: “Yeah but why would anyone WANT to do that? Isn’t it better if you focus on your studies?”
Me: “I mean, it was the hardest I’ve ever worked in my life, but I’m pretty proud of it.”
Dane: “Yeah, but why would anyone put themselves through that if they didn’t have to?”

Our conversation kind of went in circles after that, with me unable to provide a good answer as to why working so hard was in any way preferable to *not* working hard. I bit my tongue back against the L-word (lazy), and while it’s tempting to call out Danes’ sense of entitlement, I’m not sure how entitled it really is if you wind up paying it all back in taxes later in life.

As my dear friend Tommy would say, “It is neither better nor worse, just different!”

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