In episode 3 of the How to Live in Denmark podcast, host Kay Xander Mellish answers an email from a UAE‑based computer engineer weighing job offers in Australia versus Denmark. Kay illustrates Denmark’s high cost of living by recounting how a pair of ordinary white cotton socks cost 13 Danish crowns (about $5) compared to $1 in the engineer’s home country. He breaks down the price, showing that roughly 75% of the sock’s cost goes to taxes – VAT, corporate tax, wage taxes, and other levies – while the remainder covers the actual product and store expenses. Despite the high taxes, Kay emphasizes that many services in Denmark are heavily subsidized: no need for a car, subsidized daycare, healthcare, and free university education, which offset the tax burden. The episode concludes with a sponsor message for KXM Group and a plug for Kay’s "How to Live in Denmark" book.
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Hi, and welcome to episode 3 of the How to Live in Denmark podcast. I'm Kay Xander Mellish. As someone who's had a website up for a while about being a foreigner in Denmark, I get a lot of emails from people who are considering becoming foreigners in Denmark. I got one this week from a fellow in the United Arab Emirates. He's a computer engineer, and he's trying to decide whether to accept a job in Australia or a job in Denmark. Clearly, he has not looked at the weather report. Anyway, this is what he writes. My concern is, is the cost of living in Denmark is so high, buying a car is almost impossible, and taxes are high as the sky. I thought to check with you on salaries, and is it easy to live with my wife and three kids a good life on the salary only? So I won't lie to this guy. I wrote back to him. Denmark is expensive, and in a lot of unexpected ways. One example: socks. Ordinary white cotton socks. Like a lot of foreigners, I do most of my shopping in my home country and come back to Denmark with a. But this year I forgot to buy enough socks— ordinary white cotton socks. I ran out. At home, nice socks might cost $1 a pair. At the cheapest place I could find in Denmark, white socks cost 13 crowns per sock— $5 a pair, or about $2.50 per sock. That's a very high per-sock price. I know. And I'm guessing that most of it did not go to the Vietnamese or Bangladeshi teenager who actually produced the sock. So where does the money go? Why are things so expensive in Denmark? I paid $2.50 for each white cotton sock, but the half dollar was actually sales tax, or VAT. That goes directly to the government, so the store got $2 per sock. The store pays 25% corporate tax, so 40% of my sock payment has already gone to the government. Out of what's left, the store pays its employees the Danish minimum wage, about $20 an hour, half of which they'll pay in taxes. Plus the store pays rent, electricity, cleaning, all of which is taxed too. So bottom line, I estimate out of the $2.50 I paid for a single sock, 75% goes to the Danish government in one form or another. The rest goes to the store and, you know, goes to pay for the actual sock. So, things are expensive in Denmark. But I did tell the guy who wrote to me that a lot of expenses you have in other countries, you won't have here in Denmark. You don't need a car, which means you don't need car insurance, or gasoline, or fuzzy dice to hang in the back window. Daycare is subsidized, healthcare is subsidized, even private schools are subsidized. Plus, you don't have to save up or take out loans for university the way you do in many countries. It's all covered by those crazy taxes on my socks and other things. That's the How to Live in Denmark podcast for this week. See you next time. The How to Live in Denmark podcast is sponsored by KXM Group. If you're a Danish company looking to do business abroad, we make you look good in English. Contact us at kxmgroup.dk. Remember, the How to Live in Denmark book is available for download on amazon.com. You can read it on any phone or tablet. All you need is the Kindle app, and the Kindle app is free. The book's not free, but it's not very expensive either. If you read the book and enjoy it, please leave a review on your local version of amazon.com. It helps other people find the book and find the podcast.
