The palace’s income from the state of 81.6 million kroner was not enough to cover costs, and the royal family ended up with a loss of 1.6 million kroner for the year, according to the palace accounts, which were published on Thursday.
Prince Henrik’s funeral was cited as a primary reason for the financially precarious year.
The prince, who was the husband of Queen Margrethe, died on February 13th, 2018 aged 83 after several months of poor health.
Meanwhile, the 50th birthday celebrations of Crown Prince Frederik, who reached the milestone on May 26th last year, also represented a significant outlay for the palace.
Costs associated with the state visit of French president Emmanuel Macron were a further factor.
In its published report of the accounts, the palace writes that cuts were made to staff after Prince Henrik died, limiting the financial strain on the royals.
Approximately two third of palace expenses are spent on staff, with much of the remainder going towards maintenance of buildings, equipment, kitchens, laundry, transport and the many medals awarded annually by the Queen.
A total of 91 full and part-time staff were employed by the palace in 2018.
Balance between costs and income is expected to return in 2019, the palace said.