Denmark
Make employment in Denmark easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Denmark, all in one easy-to-use platform.
- Capital city
Copenhagen
- Currency
Danish krone (kr., DKK)
- Languages
Danish
- Population size
5,824,857
Facts & Stats
- Capital city
Copenhagen
- Currency
Danish krone (kr., DKK)
- Languages
Danish
- Population size
5,824,857
- Ease of doing business
Very easy
- Cost of living index
$$$$ (7 of 139 nations)
- Payroll frequency
Monthly
- VAT - standard rate
25%
- GDP - real growth rate
1.49% (2018 est.)
Denmark (Danish: Danmark), officially the Kingdom of Denmark (Danish: Kongeriget Danmark), is a Nordic country in Northern Europe. Denmark is considered to be one of the most economically and socially developed countries in the world. The country ranks as having the world's highest social mobility, a high level of income equality, the lowest perceived level of corruption in the world, the eleventh-highest HDI in the world, one of the world's highest per capita incomes, and one of the world's highest personal income tax rates.
Grow your team in Denmark with Remote
Looking to employ workers in Denmark? Companies hiring in Denmark must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.
Remote can employ your team in Denmark on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Denmark team. You can also pay contractors now in Denmark with Remote.
Risks of misclassification
Denmark, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Denmark may lead to fines and penalties for the offending company.
Employing in Denmark
Employment law in Denmark is governed by statutory legislation and collective labour labour agreements. Denmark has a long tradition of allowing the conditions of employment and pay to be decided on through collective bargaining agreements. This means that there are just a few pieces of legislation that applies to all employers and employees, such as the Danish Salaried Employees Act (Funktionærloven and the Holiday Act (Lov om Ferie).
Almost all employment contracts in Denmark are governed by collective agreements. Danish employment law and collective agreements provides strong labor conditions and protections for employees, so employing people will be an important investment and commitment.
Temporary agencies are popular options for more flexible workforce arrangements. For these and many other reasons, the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Denmark.
Minimum Wage
There is no statutory minimum wage in Denmark, but national collective bargaining agreements negotiated between workers' unions and employer associations effectively set minimum wages. The average effective hourly minimum salary across all private and public sectors is approximately 110 DKK.
Payroll Cycle
For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.
Onboarding Time
We can help you get a new employee started in Denmark fast. The minimum onboarding time we need is only 4 working days.
Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.
For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.
Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.
11 Public holidays
Competitive benefits package in Denmark
Remote supports our clients by offering competitive benefits packages that will help you attract and retain the best talent across the globe! Our benefits specialists have done the research on norms and requirements in each local market and have crafted packages that will allow your employees to thrive, no matter what country they live in.
Our benefits packages in Denmark are tailored to fulfil the local needs of your employees. Typically, our packages contain some or all of the following benefits:
Health Insurance
Dental Insurance
Vision Insurance
Mental Health Support
Pension or 401(K)
Life and Disability Insurance
Local market insights
In Denmark, 90%* of employers offer supplemental health insurance to their workforce. (*based on 3rd-party market research from our partners)
Although the country has a robust public health system, supplemental health insurance provides employees with access to a wider range of options for providers and specialists, as well as significantly shorter wait times. Our plans also offer global coverage (excluding the US) to protect your employees when they are traveling outside their home country.
Approximately 90%* of employers in Denmark also offer an occupational pension plan. (*based on 3rd-party market research from our partners)
The typical pension contribution in the market is 12% per employee per year. The percentage is calculated from the employee’s yearly base salary only.
Our core benefits (which often include things like healthcare) are required in most countries where we hire. Because Remote is the employer of record, it’s important for us to offer the same core benefits to all employees in a country to ensure fair equity and non-discriminatory hiring practices, which protects your business and ours. Note that we do not add a markup on any benefits premiums or administration costs.
If you'd like specific information about our benefits packages in Denmark, start onboarding your first employee with Remote today.
For more insight into fair equity and benefits best practices, download our Global Benefits Guide and share with the rest of your hiring team.
Taxes in Denmark
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Denmark.
2,791 DKK - Employer's Reimbursement System (AUB)
2,272 DKK - Danish Labour Market Supplementary Pension Scheme (ATP)
1,176 DKK - Occupational injury insurance (Arbejdsskadeforsikring)
1,150 DKK - Maternity/paternity leave fund (Barselsfond)
592 DKK - Financing for ATP contributions for the unemployed (FIB)
299 DKK - Labour Market Insurance (AES)
12 DKK - Securing payment for foreign workers in Denmark (AFU)
Types of Leave
All full-time workers are entitled to 5 weeks days paid holiday leave a year under the Holiday Act (Lov om ferie). Holidays accrue from the previous calendar year and can be taken in the holiday year which runs from September 1st to August 31st the following year.
Employment termination
Termination process
Termination of the employment relationship always have to be with written notice with proof that the notice has been received. Employees have been employed for at least one year at the time of the termination are protected against dismissal without just cause. Generally, collective bargaining agreements have the same protection, but after 9 months. Just causes include, but are not limited to:
Change in employer's financial situation and reduction of staff;
Restructuring of the company;
Problems related to co-operation or trust in the employee;
Employee's unfitness for the job; or
Contract breach by the employee, for example in the case of serious misconduct or theft.
Notice period
The statutory notice period for an employer depends on the duration of employment:
Less than 6 months: 1 month
Between 6 months and 3 years: 3 months
Between 3 and 6 years: 4 months
Between 6 and 9 years: 5 months
More than 9 years: 6 months
Probation periods
For salaried employees, probationary periods of up to three months are allowed.
During these three months it is possible to agree that both parties can terminate the employment with 14 days’ notice.
For non-salaried employees, there is no minimum or maximum probationary period (unless agreed in a collective agreement).