What is AM-bidrag?
AM-bidrag (arbejdsmarkedsbidrag/labor market contribution) is an 8% tax on your gross salary that finances labor market-related benefits such as unemployment benefits, sickness benefits, and maternity benefits.
AM-bidrag is 8% of gross income and is deducted from salary before all other taxes are calculated. The rate has been 8% since 2008.[↗]
AM-bidrag was introduced in 1994 and replaced several different contributions. It is paid by everyone with employment income in Denmark — there is no minimum threshold.
AM-bidrag vs. tax
Although AM-bidrag is technically not a "tax" but a "contribution", in practice it functions as a flat 8% tax on all employment income. The key difference is that AM-bidrag is deducted before your other taxes are calculated.
See what AM contribution means for your pay — calculate your net salary in 10 seconds
AM-bidrag rate 2026
| Year | Rate |
|---|---|
| 2024-2026 | 8% |
| 2008-2023 | 8% |
| 1994-2007 | Variable (up to 9%) |
How AM-bidrag is calculated
AM-bidrag is calculated very simply:
AM-bidrag = Gross salary × 8%Example: Monthly salary of 45,000 DKK
| Gross salary | 45.000 kr |
| AM-bidrag (8%) | - 3.600 kr |
| Income after AM-bidrag | = 41.400 kr |
This amount (41,400 DKK) forms the base for your other taxes.
On a monthly salary of 45,000 DKK, you pay 3,600 DKK in AM-bidrag. Your A-income (base for other taxes) becomes 41,400 DKK.
Why is AM-bidrag deducted first?
AM-bidrag reduces your taxable income. This means you effectively pay less in other taxes (bottom tax, municipal tax, any top tax).
Tax Calculation Order
AM-bidrag reduces the base for all other taxes
What does AM-bidrag cover?
AM-bidrag finances labor market-related expenses:
- Unemployment benefits — for unemployed A-kasse members
- Sickness benefits — for extended illness
- Maternity/paternity benefits — during parental leave
- Job training — activation and upskilling
- Early retirement pension — partially financed
Note: Even though you pay AM-bidrag, you still need to be a member of an A-kasse to receive unemployment benefits.
AM-bidrag impact on your taxes
Because AM-bidrag is deducted before other taxes, it has a "leverage effect" on your total tax. At a salary of 500,000 DKK, you pay 40,000 DKK in AM-bidrag. But because your other taxes are calculated on 460,000 DKK instead of 500,000 DKK, you save about 16,000 DKK in other taxes.
AM-bidrag Impact on Your Tax
Although AM-bidrag is 8%, the real cost is lower because your other taxes are calculated on a reduced amount.
Frequently Asked Questions
AM-bidrag (arbejdsmarkedsbidrag/labor market contribution) is an 8% tax on your gross salary that finances labor market-related benefits such as unemployment benefits, sickness benefits, and maternity benefits. It is deducted from your salary before other taxes are calculated.
AM-bidrag is 8% of your gross salary in 2026. The rate has been unchanged since 2008 and is expected to remain at 8% in the future. It is a flat rate that applies to everyone regardless of income level.
No, everyone with employment income in Denmark must pay AM-bidrag. There is no minimum threshold or possibility for deductions. Both employees and self-employed individuals pay AM-bidrag on their work income.
AM-bidrag finances labor market-related expenses: unemployment benefits (via A-kasser), sickness benefits for extended illness, maternity/paternity benefits, job training and activation programs, and partially early retirement pension.
AM-bidrag is deducted before your other taxes are calculated because it reduces your taxable A-income. This means you actually pay slightly less in bottom tax, municipal tax, and any top tax, as these are calculated on a lower amount.
Technically, AM-bidrag is a "contribution" and not a "tax", but in practice it functions as a flat 8% tax on all employment income. The difference is primarily legal - the money goes to specific labor market purposes.
No, retirees do not pay AM-bidrag on their pension. AM-bidrag is only paid on employment income (salary, fees, self-employment). Pension payments, student grants (SU), and transfer income are exempt.
AM-bidrag is calculated very simply: Gross salary × 8% = AM-bidrag. For a monthly salary of 45,000 DKK, AM-bidrag is 3,600 DKK. Your A-income (base for other taxes) then becomes 41,400 DKK.
Want to see your full tax calculation including AM-bidrag?
Try our salary calculator →