.svg)
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
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
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.
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.
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:
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.
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 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.
For employees covered by the Salaried Employees Act, the probation period is capped at 3 months.
.webp)
1 January- 31 December is the 12-month accounting period that businesses in Denmark use for financial and tax reporting purposes.
The payroll cycle in Denmark is usually Monthly, with employees being paid By the last working day of the month.
There is no statutory minimum wage in Denmark, as this varies per sector.
In Denmark, it is not a legal requirement to pay a 13th-month salary payment.
Employer payroll contributions are generally estimated at an additional 8% - 56.5% on top of the employee salary in Denmark.
In Denmark , the typical estimation for employee payroll contributions cost is around 1%.
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.
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.
.webp)
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.
Denmark has 11 mandatory national public holidays in a year.
Full-time employees in Denmark, working five days a week, have a minimum entitlement of 25 paid business days per year.
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
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.
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.
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.
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.
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.
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.
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.
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.
Disclaimer
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Playroll does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect Playroll’s product delivery in any given jurisdiction. Playroll makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
ABOUT THE AUTHOR
Jesse Weisz
Jesse is an experienced R&D Analyst at Playroll, a leading Employer of Record (EOR) provider. With a strong background in data analysis and market research, Jesse specializes in identifying emerging trends and driving innovation in global HR solutions. She is an all-rounder, critical thinker and success-seeker (often inextricably linked to being a late-night tea drinker).
Back to Top
.svg)
Copied to Clipboard
Where to next?
Your “everything you ever needed to know” guides to compliant global employment around the world.
.png)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg)
.svg){kind=icon}
.png)
.webp)
