Lønskat

Lønskat, or wage tax, is a term used in Danish and Norwegian to denote a tax on earned income that is typically collected at the source by employers. It applies to wages, salaries, bonuses, and other forms of compensation, and serves as a mechanism to finance public spending through income taxation.

The tax base generally starts with gross wages and salaries and is reduced by allowances, deductions, and credits defined by the tax system. Rates are often progressive, meaning higher income levels incur higher marginal rates. In many countries, wage tax is integrated with personal income tax and may be accompanied by social security contributions tied to earnings.

Collection and settlement usually occur via payroll withholding, where the employer deducts the tax from the employee’s paycheck and remits it to the tax authority on a regular schedule. At the end of the tax year, individuals may file a tax return to reconcile with actual liability, claiming eligible deductions and credits or receiving a refund if too much was withheld.

Variations exist between countries. Some systems maintain a distinct payroll tax structure that funds social programs, while others combine wage tax with the broader income tax. In practice, lønskat is often linked to other employer-based withholdings, such as social insurance contributions, but the specifics depend on national law.

Historically, wage taxation emerged as states expanded income tax regimes in the 20th century and sought reliable revenue sources. Today, the concept remains a central element of how workers’ earnings are taxed in several Nordic countries.

See also: withholding tax, payroll tax, personal income tax, tax bracket, tax credits.