Factsheet for measure
DK-2026-25/4310
– measures in Denmark
Temporary Increase in Commuting Allowance in Response to Rising Fuel Prices
Midlertidig forhøjelse af befordringsfradraget som følge af stigende brændstofpriser
Background information
The Danish government proposed a temporary increase in the commuting tax deduction (befordringsfradraget) in response to rising petrol and diesel prices and the resulting increase in commuting costs for employees. The measure aims to alleviate cost-of-living pressures by providing tax relief to workers affected by higher transport expenses. Due to the urgency of the situation, the proposal was submitted as a fast-track government bill in June 2026. The measure is intended as a temporary response to the sharp increase in fuel prices and is scheduled to remain in force until the end of 2026.
Legal reference: Bill L 4 – Proposal for an Act amending the Tax Assessment Act (Ligningsloven) concerning a temporary increase in the commuting tax deduction ((Forhøjelse af befordringsfradraget for indkomståret 2026). https://www.ft.dk/ripdf/samling/20252/lovforslag/l4/20252_l4_som_fremsat.pdf
Content of measure
The measure consists of a temporary increase in the commuting tax deduction (befordringsfradraget) for the remainder of 2026. It applies to employees who are eligible for the Danish commuting tax deduction, meaning that the distance between their home and workplace exceeds 12 kilometres one way (more than 24 kilometres per day). The measure includes an increase in the standard deduction rates, higher rates for long-distance commuters, and an increase in the supplementary deduction available to low-income commuters. The measure aims to compensate commuters for higher transport costs resulting from rising fuel prices and to alleviate cost-of-living pressures. Approximately 1.1 million employees are expected to benefit from the measure. A typical commuter is estimated to receive around DKK 2,300 in additional tax relief during 2026.
Use of measure
Approximately 1.1 million commuters are expected to be eligible for and benefit from the temporary increase in the commuting tax deduction. According to government estimates, a typical commuter will receive around DKK 2,300 in additional tax relief during 2026. As the measure was only recently proposed, no information is yet available on the actual uptake, the number of realised beneficiaries, or its effectiveness.
Target groups
Actors and funding
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Actors
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Funding
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National government
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Consulted
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Consulted
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Form
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Direct consultation outside a formal body
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Direct consultation outside a formal body
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: Unknown
Involvement
Employers’ organisations and trade unions were consulted during the legislative process through a written public hearing on the draft bill between 12 and 16 June 2026. Due to the urgency of the measure, the consultation period lasted four days. Organisations consulted included the Confederation of Danish Employers (DA), the Confederation of Danish Industry (DI), Danish Chamber of Commerce (Dansk Erhverv), the Danish Trade Union Confederation (FH), FOA, Dansk Metal and a number of other employer and employee organisations.
Views and reactions
Trade unions were generally supportive of the measure. Dansk Metal welcomed the proposal and described the temporary increase in the commuting tax deduction as “a helping hand for employees”. The union argued that many workers, particularly those employed outside large urban areas, depend on private cars to commute to work and are therefore directly affected by rising petrol and diesel prices. According to Dansk Metal, the measure helps prevent transport costs from becoming a barrier to employment and supports labour market mobility. The union also considered the proposal an appropriate short-term response to the increase in fuel prices.
Sources
