In Salary, you can add various employee benefits that are automatically reported to the Danish Tax Agency (SKAT) and posted separately in your accounting – provided the setup is correct.
To add or edit an employee benefit. Go to the Employees tab. Select the relevant employee. Click the edit icon next to the Employee Benefits field.
You can then set up and customize the following types of employee benefits (click the text to read more):
Other Employee Benefits
Other Employee Benefits
If you have provided an employee benefit that is not work-related and falls under the minor benefit threshold in section § 16, stk. 3, 3. pkt,. Of the Danish Tax Assessment Act, you must enter the taxable value here – provided that the value of the individual benefit exceeds the minor benefit threshold. You can see the value limit here. The amount will then appear on the payslip.
Examples of employee benefits that must be reported in this field:
Free motorcycle
Free access to a fitness center
Free hunting rights or hunting yield
Free childcare that is not provided through a company daycare or nursery operated by the employer
Free multimedia that does not meet the requirements for reporting as A-income in field 20 and must be taxed at market value (without salary reduction). This requires monthly reporting
Free computer (including accessories) provided without relation to work and without salary reduction. Taxation is based on market rental value and must be reported at least once per month with a proportional amount
Other Employee Benefits Without a Minor Benefit Threshold
Other Employee Benefits Without a Minor Benefit Threshold
In this field, you must report employee benefits that are not mentioned elsewhere and are not covered by the minor benefit thresholds. This means benefits that must always be taxed, regardless of their value.
These benefits are reported as B-income, which is exempt from labour market contributions (AM contribution). The tax is collected through the employee’s annual tax assessment.
Examples of benefits that must be reported here:
Employee loans
Computer (including accessories)
Free electric car or plug-in hybrid car
Fixed Deduction
Fixed Deduction
The fixed deduction can be used for gross salary arrangements, where a fixed deduction is created for the employee benefit. It is also possible to create a fixed net deduction if the company has arrangements that the employee pays for on a regular basis through their net salary.
No reporting to SKAT takes place when using fixed deductions.
Fill in the following:
Description: The text that should appear on the payslip.
Gross/net deduction: Select which type of deduction it should be.
Gross deduction basis: Choose whether the gross deduction should affect the
calculation basis for holiday pay and pension. If it is green, accrual is reduced by the gross deduction. If it is grey, accrual is not reduced.
Deduction per period: The amount to be deducted from the employee each pay period.
Fixed expense reimbursement
Fixed expense reimbursement
If an employee is to receive a fixed expense reimbursement on an ongoing basis, you can register it here.
Click Add expense and enter:
A description that will appear on the payslip
The amount to be paid out
Paid car
Paid car
If the car is leased, the leasing company will most often provide the necessary information for tax reporting purposes.
You can enter the information in two ways:
Use Easy handling
Or manually enter the monthly taxable value, for example if the amount has been provided by an accountant or leasing company.
Without Easy handling
Disable Easy entry and enter the monthly taxable value. Enable Major shareholder if the employee is a major shareholder. Then click Save changes.
With Easy handling
Salary uses SKAT’s calculation method. The full calculation is (Car value × 0.225 + environmental supplement × 7) / 12 = taxable value of company car.
Value: Enter the car’s value according to SKAT’s calculation method. Find the method here.
Acquisition date: The date the company acquired the car.
First registration date: The date the car was first registered in Denmark.
Annual periodic tax: Enter the environmental supplement. Find the calculation method here.
Employee contribution: Enter the amount if the employee pays the company for private use of the company car. The amount paid via net salary is deducted from the taxable value of the company car.
If the employee instead pays for fuel directly at the petrol station, this does not give a tax deduction.
Major shareholder: Enable if the employee is a major shareholder.
Then click Save changes.
The taxable value of the company car will then appear on the payslip.
Paid permanent residence
Paid permanent residence
If you provide a free permanent residence wholly or partially to an employee, you must report the taxable value.
In the field, you must state the difference between:
The amount the employee pays for the residence, and
The market rent for a comparable residence.
If you also pay expenses that are normally covered by the tenant, such as electricity, heating, or water, the value of these expenses must be added and included in the total amount. The value corresponds to the actual expenses.
The detailed rules can be found in section § 16, stk. 3, jf. stk. 7–9 of the Danish Tax Assessment Act.
Paid internet
Paid internet
You simply need to select this employee benefit in the system, and it will automatically be displayed correctly on the employee’s payslip.
Paid accommodation
Paid accommodation
When you pay for accommodation for your employees, they must generally pay tax on it, unless it relates to travel or a temporary workplace. If you need to pay tax-free travel allowance, you must create the payment via the per diem button.
Salary’s current solution supports the following employee groups:
Agricultural workers etc.
Domestic help
Hospital staff
Kitchen and serving staff
Private nurses with free meals at the place of employment
You must enter the total amount that the employee is to be taxed on for the relevant month in the appropriate field. Once selected, it will be shown on the employee’s payslip.
Paid phone
Paid phone
You simply need to select this employee benefit in the system, and it will automatically be displayed correctly on the employee’s payslip.
Free text
Free text
Free text is used simply to display a fixed text on the payslip.
Paid Commute
Paid Commute
This should only be selected if you as the employer pay for the employee’s transport to and from work. Free transport does not appear on the payslip but is only reported to the tax authorities.
The taxation works as follows:
The employer pays the full amount – the employee does not have to pay tax on the value (i.e. not the standard amount of 1,200 DKK).
The taxation occurs indirectly because the employee is not allowed to claim a commuting deduction on their annual tax assessment when field 63 is marked.
The benefit of having the travel card paid is therefore not taxed as salary (A-income), but instead by the employee losing their deduction.
Lunch scheme
Lunch scheme
The lunch scheme is simply a net deduction and is not reported to the tax authorities.
Lunch can be managed in the following ways:
Fixed monthly amount
Choose this option if the employee must pay the same amount every month, regardless of how often they eat lunch.
Payment per working day
Choose this option if the employee should only pay for actual working days.
Salaried employees: If the employee registers absence or remote work, no lunch deduction will be made for that day.
Hourly employees: Lunch is automatically deducted on days where working hours are registered. You can set a minimum number of hours before the system deducts lunch. See how to do this here.
Example:
An employee registers 2 hours in one day.
– If no minimum is set, the system will deduct lunch.
– If the minimum is set to 4 hours, the employee will not be deducted, as only 2 hours are registered.
Important: If the employee registers multiple time blocks on the same day and each block exceeds the minimum threshold, the system may deduct lunch multiple times. Therefore, we recommend considering which threshold best fits your working and registration patterns.
Example:
The threshold is set to 3 hours.
An employee registers two blocks of 3.5 hours on the same day.
The system will deduct lunch twice.
Guide:
Choose whether lunch should be deducted as a fixed monthly amount or a fixed amount per day.
Enter the amount and save.
The lunch deduction will now automatically appear on the payslip as a net deduction.
The system books it under the account Fri frokost (indtægt), and the amount is credited.
Forenede Gruppeliv
Forenede Gruppeliv
This function should only be used if the company has taken out a group life insurance policy administered by Forenede Gruppeliv. Enter
Membership number
Taxable value
The amount you enter in the value field is the amount that will be transferred to Forenede Gruppeliv, If you use Overførselsservice(payment service). The amount will also appear on the employee’s payslip, and the employee will be taxed on it.
Employee stock §7P
Employee stock §7P
If the employee has employee shares covered by section 7P of the Danish Tax Assessment Act, you have the option to report a text to SKAT. The scheme must be covered by income type 0101. Contact SKAT if you are unsure which text should be entered. The text will appear on the payslip.
Note: Only text can be reported – not amounts or other information.
Read more about income types here.
Employee association
Employee association
Via this function, you can create a fixed net deduction for the employee’s payment to the staff association.
The amount appears on the payslip.
It is booked as income in the accounts.
Health insurance (+ treatment)
Health insurance (+ treatment)
Enter the taxable value of the insurance or treatment. The value is usually provided by the insurance or treatment provider. Once the amount has been entered, the employee benefit will automatically appear on the employee’s payslip.
FAQ
I have added a taxable employee benefit, why is the employee’s net salary lower?
I have added a taxable employee benefit, why is the employee’s net salary lower?
When an employee is provided with an employee benefit, it is generally taxable. See which employee benefits are subject to A-tax here. This means that the value of the employee benefit is added to the employee’s salary – but only for tax calculation purposes.
Even though the employee does not receive the money, their total taxable income increases. This results in a slightly higher tax amount, and therefore the amount the employee receives is slightly lower.
It is not because the amount for the employee benefit is deducted directly – it is solely the tax effect that makes the difference.
In some payroll systems, free phone is shown as both an addition and a deduction. In Salary, it is not displayed this way.
In short:
Employee benefits are generally taxable.
The value is added to the salary but not paid out.
The higher tax results in a slightly lower net salary.
I have added a taxable employee benefit, why does the taxation not change on the payslip?
I have added a taxable employee benefit, why does the taxation not change on the payslip?
If an employee benefit is considered B-income, it will simply appear on the employee’s payslip and be reported to SKAT. The tax is not withheld through payroll but is instead collected via the employee’s annual tax assessment, which is why there are no changes on the payslip when it is added.
You can see an overview of which employee benefits are considered B-income here.
Which employee benefits are considered A-income (taxable)?
Which employee benefits are considered A-income (taxable)?
Paid car (Reported in field 19 in eIndkomst)
Paid phone (Reported in field 20 in eIndkomst)
Paid internet (Reported in field 20 in eIndkomst)
Paid accommodation (Reported in field 21 in eIndkomst)
Value of employer-paid health insurance and treatment (Reported in field 26 in eIndkomst)
Which employee benefits are considered B-income (taxable)?
Which employee benefits are considered B-income (taxable)?
Value of paid permanent residence (Reported in field 50 in eIndkomst)
Other employee benefits (Reported in field 55 in eIndkomst)
Other employee benefits without a minor benefit threshold (Reported in field 56 in eIndkomst)
Other fields
Other fields
Paid commute (Reported in field 63 in eIndkomst)
Handling of employee benefits
How do I add a gross salary arrangement?
How do I add a gross salary arrangement?
If you wish to set up a gross salary arrangement, you can create a fixed deduction. See how to do it here.
How do I add a DSB business travel card as a gross salary arrangement?
How do I add a DSB business travel card as a gross salary arrangement?
If you wish to create a gross salary arrangement, you can set up a fixed deduction. See how to do it here.
The employee is missing taxation of company car for previous months / has been taxed too little, what should I do?
The employee is missing taxation of company car for previous months / has been taxed too little, what should I do?
If you have mistakenly not paid company car tax or the employee has been taxed too little on a company car, you can create an extraordinary payroll run for each month and add the company car via the bonus function for each month.
Remember to set the payout date for the company car to the same month as the relevant extraordinary payroll run(s).
Guide:
Extraordinary payroll
Start by creating an extraordinary payroll run for the month(s) where company car should have been included. If you already know how to create the payroll run, you can go directly to the next step via this link.
Go to the Payroll tab and click Create extraordinary payroll.
2. To create the correct payroll run, make sure to:
Select the correct payroll cycle in order to select the employee.
Select the correct payroll cycle in order to select the employee.
By default, the payroll cycle is set to “per month”. If you have employees with a different pay period (for example, staggered month), you must select the correct cycle in the dropdown menu. Please note that employees and periods that do not match the selected payroll cycle will not be shown in the overview.
Select the payroll period the salary should apply to.
Select the payroll period the salary should apply to.
Vælg den lønperiode, du ønsker at udbetale løn for. Sørg for, at den valgte periode stemmer overens med den løn, der skal køres.
Select the relevant employee(s).
Select the relevant employee(s).
Vælg de medarbejdere, der skal indgå i lønkørslen, ved at klikke på dem i listen. Bemærk, at du ikke kan tilføje flere medarbejdere, efter lønkørslen er oprettet, så sørg for at vælge alle relevante medarbejdere fra starten.
3. Once the employee(s) are selected, click Start extraordinary payroll.
Add company car
4. Make sure that Multiple bonus types is enabled under Advanced settings. You can activate it via this link.
4. Create a bonus. Go to the specific employee and click Grant bonus.
5. Click Create bonus.
6.Fill in the following:
Payout date: Select the same month as the extraordinary payroll run.
Bonus amount: Enter the amount the employee should be taxed on. If the employee has already been taxed on a company car that month, enter only the difference.
Type: Select Company car.
Text on payslip: For example, Company car.
Once all fields are completed, click Save changes.
Approve payroll
Approve payroll
7. After creating the bonus, go to the Payroll tab and click on the relevant extraordinary payroll run.
8. Check that Value of company car appears on the payslip. Note that an outstanding net amount will arise and be transferred to the next payslip. This happens because the employee has already received their salary, and additional taxation is added without sufficient salary to cover it. Instead of the payslip going into a negative amount, the net deduction is transferred to the next payslip to be covered by future salary.
If you use Overførselsservice, you can switch to Overførselsservice afterward via this guide. If the transfer is set to manual, you can also transfer the difference manually to the tax account.
The employee is missing taxation of free phone/free internet for previous months, what should I do?
The employee is missing taxation of free phone/free internet for previous months, what should I do?
If you have mistakenly not paid tax on free phone/free internet, you can create an extraordinary payroll run for each month and add free phone/free internet via the bonus function for each month.
Remember to set the payout date for free phone/free internet to the same month as the relevant extraordinary payroll run(s).
Extraordinary payroll
Start by creating an extraordinary payroll run for the month(s) where company car should have been included. If you already know how to create the payroll run, you can go directly to the next step via this link.
Go to the Payroll tab and click Create extraordinary payroll.
2. To create the correct payroll run, make sure to:
Select the correct payroll cycle in order to select the employee.
Select the correct payroll cycle in order to select the employee.
By default, the payroll cycle is set to “per month”. If you have employees with a different pay period (for example, staggered month), you must select the correct cycle in the dropdown menu. Please note that employees and periods that do not match the selected payroll cycle will not be shown in the overview.
Select the payroll period the salary should apply to.
Select the payroll period the salary should apply to.
Vælg den lønperiode, du ønsker at udbetale løn for. Sørg for, at den valgte periode stemmer overens med den løn, der skal køres.
Select the relevant employee(s).
Select the relevant employee(s).
Vælg de medarbejdere, der skal indgå i lønkørslen, ved at klikke på dem i listen. Bemærk, at du ikke kan tilføje flere medarbejdere, efter lønkørslen er oprettet, så sørg for at vælge alle relevante medarbejdere fra starten.
3. Once the employee(s) are selected, click Start extraordinary payroll.
Paid phone/internet
4. Make sure that Multiple bonus types is enabled under Advanced settings. You can activate it via this link.
4. Create a bonus. Go to the specific employee and click Grant bonus.
5. Click Create bonus.
6.Fill in the following:
Payout date: Select the same month as the extraordinary payroll run.
Type: Select paid phone.
Once all fields are completed, click Save changes.
Approve payroll
7. After creating the bonus, go to the Payroll tab and click on the relevant extraordinary payroll run.
8. Check that Value of company car appears on the payslip. Note that an outstanding net amount will arise and be transferred to the next payslip. This happens because the employee has already received their salary, and additional taxation is added without sufficient salary to cover it. Instead of the payslip going into a negative amount, the net deduction is transferred to the next payslip to be covered by future salary.
If you use Overførselsservice, you can switch to Overførselsservice afterward via this guide. If the transfer is set to manual, you can also transfer the difference manually to the tax account.
Can Salary handle employee shares and/or dividend payments?
Can Salary handle employee shares and/or dividend payments?
No, Salary does not handle employee shares or dividend payments. It is only possible to report text to SKAT in connection with employee shares covered by section 7P of the Danish Tax Assessment Act. See how to do it here.
How should a free bicycle be registered?
How should a free bicycle be registered?
There are many ways the scheme can be structured, so you must ensure that you know how it should be reported to SKAT. If you are unsure which fields it should be reported in to SKAT, you can contact your accountant or SKAT to obtain this information. Afterward, you can send the specific fields to support and ask them to help set it up correctly in the system.
Free phone without employee payment
Free phone without employee payment
If it is solely a work phone, you do not have to pay tax on it. A declaration of truth must be signed, and it should not be set up in the contract. Instead, it must be reported directly to SKAT.