Mileage allowances and car reimbursement rates in Denmark (2024)

Denmark! From captivating Copenhagen to arty Aarhus, Danish business hubs are flourishing, and business travellers are increasingly taking the road. In Denmark, employees using their own car for business purposes can claim tax-free reimbursements from their employers based on the amount of mileage covered.

Whether you’re covering long distances for a conference at the other end of the country, or just heading to the outskirts of town for a team-building day, here’s the lowdown on the Danish system of mileage rates and travel allowances for 2024.

How does mileage allowance work?

Put simply, mileage allowance is the reimbursement of travel expenses: it’s a tax-deductible amount employees can claim to cover the cost of fuel, insurance, road tax, and other relevant expenses incurred while using their own car (specifically not a company car) for business trips.

Every country in Europe covers these costs at different rates, and it is the responsibility of the employer to cover these expenses, so to ensure you’re keeping compliant and not risking a shock at the end of the tax income year, it’s important for employers and employees to be clued up.

However, it is important to remember that rates and conditions will not only vary from country to country, but will likely change depending on vehicle used and distance covered.

In Denmark, as in most other countries, these journeys must be exclusively for business purposes, but can range from client meetings to trade fairs. However, Denmark stands out as one of the few countries offering daily commute allowances for employees covering longer distances. The amount reimbursed to employees is tax deductible for businesses, just so long as it doesn’t exceed government guidelines.

Both employees and employers can profit from this setup: tax-free car mileage allowance benefits workers who might otherwise be paying for travel expenses from their own pocket, and businesses can enjoy significant tax deduction rates on company journeys.

Let’s take a look at the Danish system.

What are the mileage allowance rates in Denmark in 2024?

Every November, the Danish authorities determine the upcoming year’s mileage rates based on estimations of the upcoming year’s costs for owning and operating a vehicle. In 2024, the reimbursement rate was increased from 3,73 DKK (€0.50) per kilometre in 2023 to 3,79 DKK (€0.51) per kilometre. It’s a marginal increase, but an increase all the same.

Here are the stats for tax-free mileage allowance, as per skat.dk (Denmark’s government website):

First 20,000 km of the year (per kilometre)

Above 20,000 km within the year (per kilometre)

Car or motorcycle

2023

DKK 3.73 (€0.50)

DKK 2.19 (€0.29)

2024

DKK 3.79 (€0.51)

DKK 2.23 (€0.30)

Bike or scooter

2023

DKK 0.61 (€0.08)

2024

DKK 0.62 (€0.083)

It’s important to remember that employers are allowed to pay their employees more than these maximum amounts, but the excess will be considered taxable income. If you stick to these standard rates, reimbursement is tax-free.

The Danish rates are currently some of the highest in Europe, up there with Austria (€0.42 per km) and Italy (€0.42 per km), and significantly higher than countries such as Spain (€0.26 per km).

Commuting allowances in Denmark

The Danish system stands out not only for its high rates, but also because it is one of the few countries providing deductions for commuting to and from work. Covering all means of transport (including car, train, bike and bus), you are eligible for transport deduction if you travel over 12 km to work (a total of 24 km to and from work each day).

Here are the rates:

Transport per day

Deduction per km per day for 2024

Deduction per km per day for 2023

0-24km

DKK 0 (no deduction)

25-120km

DKK 2.23 (€0.30)

DKK 2.19 (€0.29)

More than 120km

DKK 1.12 (€0.15) / (DKK 2.23 or €0.30 in peripheral municipalities)

DKK 1.10 (€0.15) / (DKK 2.16 or €0.29 in peripheral municipalities)

Source

These include all types of paid work on which you pay labour market contribution (AM-bidrag), including student jobs and paid internships. You are only entitled to a deduction for the days you actually travel to and from work—therefore you can't claim a deduction for the days you work from home, are ill, or on vacation.

As it stands, Denmark’s commuting deduction rate values at 26% in tax savings. So if your commuting deduction is DKK 5,000 (€670), you will save around DKK 1,300 (€174) in tax.

Some more good news (that’s right), employees are entitled to tax-free toll reimbursements during their commutes.

Here are the rates:

Bridge

Additional deduction per trip in 2024 and 2023

Great Belt (car/motorcycle)

DKK 110 (€15)

Great Belt (train/public transport)

DKK 15 (€2)

Øresund (car/motorcycle)

DKK 50 (€7)

Øresund (train/public transport)

DKK 9 (€1.21)

Source

Even better, there is another transport deduction bonus for those who earn under DKK 363,700 (€48,764): you are entitled to an additional deduction for transport between home and work. This extra deduction amounts to a maximum DKK 15,400(€2,065)in 2024, reduced gradually for income between DKK 313,700 (€42,061) and DKK 363,700 (€48,765). The system will automatically calculate the additional deduction on your preliminary income assessment and tax assessment notice.

While the system can be highly beneficial to employees, there are certain conditions to be aware of. You will not be eligible for transportation deduction if:

Your work is unpaid

You drive to and from your study. A Student Educational Grant (SU) does not count as pay

Your employer pays for transport (for example, by funding a commuter pass for the employee)

You have a company car at your disposal

Mileage tax deduction for self-employed workers

If you are self-employed in Denmark, you can get a tax deduction for several expenses related to the business. This also applies to business-related travel.

One important requirement for getting a mileage tax deduction as a self-employed person is that you must drive your own car on white plates—in Denmark, company cars use yellow plates while privately owned vehicles have white plates.

In order to be eligible for the scheme, you must also keep a driving log containing the following information:

Name, address, CPR or CVR number

Date of travel

Kilometre reading when the journey starts

Kilometre reading when the journey ends

Destination and any intermediate stops

Total kilometres

Driving rate

Calculation of mileage tax deduction

Looking to write your own car allowance policy? Check out our guide to corporate travel policies.

Per diems in Denmark for 2024

While separate to mileage allowance reimbursements, employees travelling for professional purposes are eligible for a tax-free travel allowance from their employer, covering food, accommodation and transport costs in connection with work-related travel. A key stipulation is that the trip must be a minimum of 24 hours.

The daily allowance amount for business trips in Denmark is DKK 574 per day in 2024. An additional tax-free amount of up to 25% of the daily rate may be paid out for meals and small expenses.

What is not included in the mileage allowance?

It’s important to remember that not all journeys carried out during an employee’s business hours will be covered by Denmark’s business mileage allowance. Here are some common trips you might take that are not covered by the transport deduction.

Personal trips that are not directly relevant to the employee’s role, for example a coffee run

Parking costs during your trip typically fall outside the mileage rate

Trips under 24 kilometres will not be eligible for tax deduction

How can I file a mileage allowance claim in Denmark?

Most European countries (including Norway, Finland, Sweden, Austria, Belgium and France) don't require a specific government form for mileage allowance claims. Companies typically handle these internally.

If you are claiming a commuter allowance, you must report it to Skattesstyrelsen (the Danish national tax agency) on your preliminary or annual assessments, using your official residential address and your work address.

If one or more of your circumstances change, remember to adjust your calculation. This may be the case if you move home, or change jobs.

Streamline travel expenses with TravelPerk's business travel management platform

One of the most efficient ways of keeping an eye on employee travel costs and mileage rates is to integrate an expense management solution with a dedicated business travel management platform—like TravelPerk.

Business travel can be a headache, but it doesn’t have to be! With an impressive selection of third-party integrations, including expense management tools from Pleo to Spendesk, TravelPerk can take your business travel management to the next level.

The key to successful travel is to keep all your expenses in one place, making sure all relevant stakeholders are in the loop. Ready to drive round Denmark? Let’s hit the road.

Mileage allowances and car reimbursement rates in Denmark (2024)

How does mileage allowance work?

What are the mileage allowance rates in Denmark in 2024?

Commuting allowances in Denmark

Mileage tax deduction for self-employed workers

Per diems in Denmark for 2024

What is not included in the mileage allowance?

How can I file a mileage allowance claim in Denmark?

Streamline travel expenses with TravelPerk's business travel management platform

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