Employer of Record in Denmark

Guide to Hiring Employees in Denmark

Your guide to hiring employees in Denmark, covering the employment landscape, working customs, and local labor laws.

Capital City

Copenhagen

Currency

Danish Krone

 (

Kr

)

Timezone

GMT +1

Payroll Frequency

Monthly

Tax Year

1 January- 31 December

Employer Tax

8% - 56.5%

Languages

Danish

Leave The hiring to a local expert

Hire in Denmark with ease—our experts handle employment and compliance for you.

Enquire Now

How to Hire In Denmark

Hiring in Denmark for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Denmark in the following three ways:

  • Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Denmark.
  • Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Denmark’s labor laws and tax regulations.
  • Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Good To Know

Employees in Denmark subject to a non-compete agreement are eligible for monthly compensation. The compensation is 40% of their monthly salary if the clause's duration is up to six months and 60% if the duration exceeds six months. This compensation is applicable for the entire duration of the non-compete agreement, starting from the termination of employment.

Denmark consistently ranks high in global happiness indexes. The Danish workplace culture values equality, transparency, and collaboration, fostering a sense of community among employees. This cultural aspect contributes to high job satisfaction levels and a harmonious work atmosphere.

The annual paid leave entitlement in Denmark is based on the employee's previous year's work. For each month worked in a calendar year, employees accrue 2.08 days of paid vacation leave, totaling 25 days for a full year's work, which they can utilize in the following year.

Denmark boasts one of the most generous parental leave policies globally. Parents are entitled to a combined total of up to 52 weeks of partially paid leave, providing ample support for the well-being of both parents and their children.

How to Employ In Denmark

Businesses can only operate smoothly in Denmark if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Denmark below, to avoid any compliance issues.

Employment Contract Requirements

Denmark, known for its progressive work culture and emphasis on a healthy work-life balance, offers a welcoming environment for businesses. When employing individuals in Denmark, there are several key hiring formalities to consider for the employment contract:

  • Employment Contract Terms
  • Probationary Period
  • Working Hours and Overtime
  • Non-Compete Clauses

Onboarding Process

We can help you get a new employee started in Denmark quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Denmark

In Denmark, the standard working week for an employee typically consists of five days, with an average of 37.5 hours worked per week. As per the Working Time Directive Act, the maximum allowable working time is set at 48 hours per week, calculated as an average over a four-month period

Overtime in Denmark

Overtime hours exceeding 37 hours per week are subject to compensation at a rate ranging from 150% to 200% of the regular pay rate, depending on the provisions outlined in the applicable Collective Bargaining Agreement. It's important to note that the payment of overtime is not mandatory unless specified in a Collective Agreement.

Probation Period in Denmark

For employees covered by the Salaried Employees Act, the probation period is capped at 3 months.

A collage of people in various careers

Payroll Management in Denmark

Fiscal Year in Denmark

1 January- 31 December is the 12-month accounting period that businesses in Denmark use for financial and tax reporting purposes.

Payroll Cycle in Denmark

The payroll cycle in Denmark is usually Monthly, with employees being paid By the last working day of the month.

Minimum Wage in Denmark

There is no statutory minimum wage in Denmark, as this varies per sector.

Bonus Payments in Denmark

In Denmark, it is not a legal requirement to pay a 13th-month salary payment.

Overview of Employment Taxes in Denmark

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 8% - 56.5% on top of the employee salary in Denmark.

Tax TypeTax Rate
Mandatory Social Security (ATP)198 DKK
Other social security schemes (estimated)800 DKK
Industrial injuries insurance (estimated)100 DKK
Holiday Bonus (accrued each month & paid out in May)1%

Employee Payroll Tax Contributions

In Denmark , the typical estimation for employee payroll contributions cost is around 1%.

Tax TypeTax Rate
ATP99 DKK

Individual Income Tax Contributions

Income tax in Denmark is 'Pay As You Earn'. The individual income tax ranges from 8% to 56.5%. Income tax is calculated according to progressive rates.

Income BracketTax Rate
0 - 54,021 DKK8%
54,022 DKK - 640,109 DKK43.8%
640,110 DKK And above56.50%

Pension in Denmark

Denmark's pension system integrates both public and private schemes to ensure retirees' financial well-being. The Basic State Pension, funded by taxes, offers a fundamental income upon retirement. Supplementary pensions, managed by private providers or pension funds, allow workers to enhance their retirement benefits. This comprehensive approach underscores Denmark's dedication to securing retirees' financial stability.

Info Icon

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Denmark tailored to your needs.

CTA Image showing employees in various countries across the globe
Employee Cost Calculator

Get an instant breakdown of the true costs of hiring in Denmark.

Calculate Now Default Icon Hover Icon

Leave Entitlements And Company Policies In Denmark

Mandatory Leave Entitlement in Denmark

The annual leave entitlement in Denmark is 5 Weeks for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Denmark

Denmark has 11 mandatory national public holidays in a year.

HolidayDate
New Years Day1 January
Maundy Thursday6 April
Good Friday7 April, the specific date fluctuates each year
Easter Sunday10 April, the specific date fluctuates each year
Easter Monday11 April, the specific date fluctuates each year
Ascension day18 May, the specific date fluctuates each year
Whit Sunday28 May, the specific date fluctuates each year
Whit Monday29 May, the specific date fluctuates each year
Christmas day25 December
Boxing Day26 December

Paid Time Off in Denmark

Full-time employees in Denmark, working five days a week, have a minimum entitlement of 25 paid business days per year.

  • The accrual rate for leave is 2.08 days per month, and part-time employees enjoy the same allocation of vacation days.
  • If an employee is given more than 25 days, the accrual rate per month is their annual vacation allowance divided by 12. Employees are required to take a minimum of 20 days off annually.

Maternity Leave In Denmark

The mother has the right to take 4 weeks of maternity leave before the anticipated date of birth. However, if her terms of employment specify a longer maternity leave, she is entitled to it. After giving birth, mothers are granted a total of 24 weeks of leave. This is paid by the state through maternity benefits

Paternity Leave In Denmark

Parents of children born after August 2, 2022, are entitled to 24 weeks of leave. This includes 2 compulsory weeks directly after birth, 9 non-transferable weeks to be used within a year, and 13 flexible weeks that can be taken, postponed, or transferred to the other parent before the child turns 9.

Sick Leave In Denmark

The Salaried Employees Act and most Collective Agreements stipulate, but the general rule is that employees are typically entitled to their regular remuneration during periods of sickness.

  • The employer covers the payments during the initial 30 days of sickness. Subsequent leave is compensated by the authorities. The maximum benefit is 4695 DKK per week and 126.89 DKK per hour.
  • In general, employees can receive sickness benefits for a maximum of 22 weeks within a nine-month period. To qualify for sickness benefits, individuals must have been continuously employed for the eight weeks preceding the sickness absence and worked a minimum of 74 hours during that period.
  • Employers are required to inform the municipality of their employee's illness-related absence within the specified timeframe.

Parental Leave In Denmark

Parents can collectively opt for an additional 14 weeks of parental leave. The distribution of this unpaid leave, to be taken after the initial 52 weeks of maternity and paternity leave, is at the discretion of both parents.

National Military/Civil Service Leave

In Denmark, employees aged 18 to 30 may be selected for national military or civil service through a random draw, and voluntary participation is open to both men and women. Employees will not receive pay for their first call-up, but subsequent call-ups will be paid for the month of call-up and one month thereafter.

Carer's Leave

An employee has the right to time off to care for a close relative who is dying, is seriously ill or disabled. The leave can be up to 6 months with possible extension of 3 months.

Employment Termination and Severance Policies in Denmark

Termination Process in Denmark

In Denmark, Employers must provide a valid justification for terminating an employee to mitigate the risk of potential claims of unfair dismissal. Specifically, when terminating employees with over 12 months of service due to poor performance, it is crucial to adhere to a proper disciplinary procedure to reduce the likelihood of facing an unfair dismissal lawsuit.

  • Misconduct
  • Performance due to unsuitability for the job
  • Disciplinary dismissal
  • By mutual agreement

Notice Period in Denmark

Employee notice periods are one month. The minimum notice period required by the employer is 2 weeks and increases according to the length of the employment.

  • Up to 3 months of employment - 2 weeks notice
  • Up to 6 months of employment - 1 months notice
  • Up to 3 years of employment - 3 months notice
  • Up to 6 years of employment - 4 months notice
  • Up to 9 years of employment - 5 months notice
  • Over 9 years of employment - 6 months notice

Severance in Denmark

In Denmark, there are typically no statutory requirements for severance pay. However, employees with continuous employment ranging from 12 to 17 years are entitled to 2 months' pay. Employees with continuous employment for more than 17 years are entitled to 3 months' of pay.

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Woman with glasses
Woman with glasses

Take your business to new places

Employer of Record for Denmark

  • hire icon Hire employees without entity setup.
  • handshake icon Full compliance, we assume 100% liability.
  • gift icon Handle local payroll and benefits seamlessly.
  • headphones icon 24/5 responsive real-human support.
  • money icon Transparent pricing, no hidden fees.

FAQS

FAQs About Hiring In Denmark

Playroll makes growing your team in Denmark effortless. Ready to start?

The HR Platform built to scale your global team.

Employer of Record in [State]

Guide to Hiring Employees in [State]

Your guide to hiring employees in [State], covering the employment landscape, working customs, and local labor laws.

Capital City

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Employer Tax

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Leave The hiring to a local expert

Hire in Denmark with ease—our experts handle employment and compliance for you.

Enquire Now

How to Hire In Denmark

Hiring in Denmark for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Denmark in the following three ways:

  • Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Denmark.
  • Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Denmark’s labor laws and tax regulations.
  • Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Good To Know

Employees in Denmark subject to a non-compete agreement are eligible for monthly compensation. The compensation is 40% of their monthly salary if the clause's duration is up to six months and 60% if the duration exceeds six months. This compensation is applicable for the entire duration of the non-compete agreement, starting from the termination of employment.

Denmark consistently ranks high in global happiness indexes. The Danish workplace culture values equality, transparency, and collaboration, fostering a sense of community among employees. This cultural aspect contributes to high job satisfaction levels and a harmonious work atmosphere.

The annual paid leave entitlement in Denmark is based on the employee's previous year's work. For each month worked in a calendar year, employees accrue 2.08 days of paid vacation leave, totaling 25 days for a full year's work, which they can utilize in the following year.

Denmark boasts one of the most generous parental leave policies globally. Parents are entitled to a combined total of up to 52 weeks of partially paid leave, providing ample support for the well-being of both parents and their children.

How to Employ In Denmark

Businesses can only operate smoothly in Denmark if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Denmark below, to avoid any compliance issues.

Employment Contract Requirements

Denmark, known for its progressive work culture and emphasis on a healthy work-life balance, offers a welcoming environment for businesses. When employing individuals in Denmark, there are several key hiring formalities to consider for the employment contract:

  • Employment Contract Terms
  • Probationary Period
  • Working Hours and Overtime
  • Non-Compete Clauses

Onboarding Process

We can help you get a new employee started in Denmark quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Denmark

In Denmark, the standard working week for an employee typically consists of five days, with an average of 37.5 hours worked per week. As per the Working Time Directive Act, the maximum allowable working time is set at 48 hours per week, calculated as an average over a four-month period

Overtime in Denmark

Overtime hours exceeding 37 hours per week are subject to compensation at a rate ranging from 150% to 200% of the regular pay rate, depending on the provisions outlined in the applicable Collective Bargaining Agreement. It's important to note that the payment of overtime is not mandatory unless specified in a Collective Agreement.

Probation Period in Denmark

For employees covered by the Salaried Employees Act, the probation period is capped at 3 months.

A collage of people in various careers

Payroll Management in Denmark

Fiscal Year in Denmark

1 January- 31 December is the 12-month accounting period that businesses in Denmark use for financial and tax reporting purposes.

Payroll Cycle in Denmark

The payroll cycle in Denmark is usually Monthly, with employees being paid By the last working day of the month.

Minimum Wage in Denmark

There is no statutory minimum wage in Denmark, as this varies per sector.

Bonus Payments in Denmark

In Denmark, it is not a legal requirement to pay a 13th-month salary payment.

Overview of Employment Taxes in Denmark

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 8% - 56.5% on top of the employee salary in Denmark.

Tax TypeTax Rate
Mandatory Social Security (ATP)198 DKK
Other social security schemes (estimated)800 DKK
Industrial injuries insurance (estimated)100 DKK
Holiday Bonus (accrued each month & paid out in May)1%

Employee Payroll Tax Contributions

In Denmark , the typical estimation for employee payroll contributions cost is around 1%.

Tax TypeTax Rate
ATP99 DKK

Individual Income Tax Contributions

Income tax in Denmark is 'Pay As You Earn'. The individual income tax ranges from 8% to 56.5%. Income tax is calculated according to progressive rates.

Income BracketTax Rate
0 - 54,021 DKK8%
54,022 DKK - 640,109 DKK43.8%
640,110 DKK And above56.50%

Pension in Denmark

Denmark's pension system integrates both public and private schemes to ensure retirees' financial well-being. The Basic State Pension, funded by taxes, offers a fundamental income upon retirement. Supplementary pensions, managed by private providers or pension funds, allow workers to enhance their retirement benefits. This comprehensive approach underscores Denmark's dedication to securing retirees' financial stability.

Info Icon

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Denmark tailored to your needs.

CTA Image showing employees in various countries across the globe
Employee Cost Calculator

Get an instant breakdown of the true costs of hiring in Denmark.

Calculate Now Default Icon Hover Icon

Leave Entitlements And Company Policies In Denmark

Mandatory Leave Entitlement in Denmark

The annual leave entitlement in Denmark is 5 Weeks for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Denmark

Denmark has 11 mandatory national public holidays in a year.

HolidayDate
New Years Day1 January
Maundy Thursday6 April
Good Friday7 April, the specific date fluctuates each year
Easter Sunday10 April, the specific date fluctuates each year
Easter Monday11 April, the specific date fluctuates each year
Ascension day18 May, the specific date fluctuates each year
Whit Sunday28 May, the specific date fluctuates each year
Whit Monday29 May, the specific date fluctuates each year
Christmas day25 December
Boxing Day26 December

Paid Time Off in Denmark

Full-time employees in Denmark, working five days a week, have a minimum entitlement of 25 paid business days per year.

  • The accrual rate for leave is 2.08 days per month, and part-time employees enjoy the same allocation of vacation days.
  • If an employee is given more than 25 days, the accrual rate per month is their annual vacation allowance divided by 12. Employees are required to take a minimum of 20 days off annually.

Maternity Leave In Denmark

The mother has the right to take 4 weeks of maternity leave before the anticipated date of birth. However, if her terms of employment specify a longer maternity leave, she is entitled to it. After giving birth, mothers are granted a total of 24 weeks of leave. This is paid by the state through maternity benefits

Paternity Leave In Denmark

Parents of children born after August 2, 2022, are entitled to 24 weeks of leave. This includes 2 compulsory weeks directly after birth, 9 non-transferable weeks to be used within a year, and 13 flexible weeks that can be taken, postponed, or transferred to the other parent before the child turns 9.

Sick Leave In Denmark

The Salaried Employees Act and most Collective Agreements stipulate, but the general rule is that employees are typically entitled to their regular remuneration during periods of sickness.

  • The employer covers the payments during the initial 30 days of sickness. Subsequent leave is compensated by the authorities. The maximum benefit is 4695 DKK per week and 126.89 DKK per hour.
  • In general, employees can receive sickness benefits for a maximum of 22 weeks within a nine-month period. To qualify for sickness benefits, individuals must have been continuously employed for the eight weeks preceding the sickness absence and worked a minimum of 74 hours during that period.
  • Employers are required to inform the municipality of their employee's illness-related absence within the specified timeframe.

Parental Leave In Denmark

Parents can collectively opt for an additional 14 weeks of parental leave. The distribution of this unpaid leave, to be taken after the initial 52 weeks of maternity and paternity leave, is at the discretion of both parents.

National Military/Civil Service Leave

In Denmark, employees aged 18 to 30 may be selected for national military or civil service through a random draw, and voluntary participation is open to both men and women. Employees will not receive pay for their first call-up, but subsequent call-ups will be paid for the month of call-up and one month thereafter.

Carer's Leave

An employee has the right to time off to care for a close relative who is dying, is seriously ill or disabled. The leave can be up to 6 months with possible extension of 3 months.

Employment Termination and Severance Policies in Denmark

Termination Process in Denmark

In Denmark, Employers must provide a valid justification for terminating an employee to mitigate the risk of potential claims of unfair dismissal. Specifically, when terminating employees with over 12 months of service due to poor performance, it is crucial to adhere to a proper disciplinary procedure to reduce the likelihood of facing an unfair dismissal lawsuit.

  • Misconduct
  • Performance due to unsuitability for the job
  • Disciplinary dismissal
  • By mutual agreement

Notice Period in Denmark

Employee notice periods are one month. The minimum notice period required by the employer is 2 weeks and increases according to the length of the employment.

  • Up to 3 months of employment - 2 weeks notice
  • Up to 6 months of employment - 1 months notice
  • Up to 3 years of employment - 3 months notice
  • Up to 6 years of employment - 4 months notice
  • Up to 9 years of employment - 5 months notice
  • Over 9 years of employment - 6 months notice

Severance in Denmark

In Denmark, there are typically no statutory requirements for severance pay. However, employees with continuous employment ranging from 12 to 17 years are entitled to 2 months' pay. Employees with continuous employment for more than 17 years are entitled to 3 months' of pay.

Back to Top

Copied to Clipboard

Woman with glasses
Woman with glasses

Take your business to new places

Employer of Record for Denmark

  • hire icon Hire employees without entity setup.
  • handshake icon Full compliance, we assume 100% liability.
  • gift icon Handle local payroll and benefits seamlessly.
  • headphones icon 24/5 responsive real-human support.
  • money icon Transparent pricing, no hidden fees.

FAQS

FAQs About Hiring In Denmark

Playroll makes growing your team in Denmark effortless. Ready to start?

The HR Platform built to scale your global team.