Denmark
Introduction
General overview & country facts, as well as labour regulations.
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Employment Terms
All you need to know about salary & bonuses, working hours & overtime, probation period, notice period & severance pay, as well as all leave types.
COUNTRY PLAYBOOK
Denmark
Everything you need to know about payroll, benefits & hiring top talent in Denmark
Currency
Danish Krone (DKK)
Salary payment frequency
Monthly
Capital
Copenhagen
Time Zone
GMT +2:00
Official Languages
Danish
Is English spoken?
Yes
Quick Links
Introduction
General Overview & Economic Facts
- Denmark is a Nordic country located in Northern Europe
- It spans an area of approximately 42,943 km2 (16,580 mi2) and has a population of approximately 5.91 million
- Denmark ranks highly in terms of human development with a ranking of 10th on the HDI (2019)
- Denmark’s economy ranks 40th in terms of nominal GDP (2022) and 53rd in terms of PPP (2022)
Why Employ In Denmark?
- The main exports from Denmark include machinery, foodstuffs, medication and instruments
- 12.33% of the population is between the ages of 15 and 24 years, with 38.71% of the population being between the ages of 25 and 54. Denmark has a fairly mature population, making it an excellent country to hire more experienced professionals
Overview Of The Labour Law
- The main sources of Labour Law include the Salaried Employees’ Act, the Holiday Act and the Act on Restrictive Covenants Act. Collective bargaining agreements are also applicable in Denmark
- The Labour regulations provides the minimum terms and conditions for employment including working hours, leave, notice periods and severance pay
- Denmark’s labour laws offer protection to both employers and employees
Fun Country Facts
- Denmark has been named the world’s happiest country
- There is no direct translation for “please” in Danish
- Denmark has the oldest State flag in the world
Why Use Playroll Services For Denmark?
- Employing in Denmark requires companies to have their own legal entity in the country as well as to manage payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in Denmark
- With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
- We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing your team
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Social Cost
Contribution per annum: DKK 9221.40
Pension Finance Scheme
DKK 571.00
Contribution to Maternity Fund
DKK 1,350.00
Danish Labour Market Fund (AFU)
DKK 7.00
Financing Compensation (AES)
DKK 396.00
Educational Scheme (AUB)
DKK 3,213.00
Lønmodtagernes Garantifond (LG)
DKK 3,543.00
Holiday account admin cost
DKK 122.40
Holiday account
DKK 19.00
Industrial Injuries Insurance
DKK 6000.00
Contribution is per annum
Varies by industry, number of employees and insurance provider
Accrued Holiday Pay
Calculated on total monthly salary
Vacation fee
12.50%
Vacation add on- feriefridage
1.00%
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Labour Market Supplementary Pension (ATP)
Contribution is per annum
DKK 1135.80
Denmark Healthcare Contribution
DKK 900.00 per annum
Labour Market Tax
Calculated on total monthly salary
8.00%
Church Tax
Average contribution. Varies by municipality. Only charged for members of the Danish State Church (Lutheran)
+/- 0.70%
Income Tax
Income Tax is calculated on ‘Worldwide Income’
Income bracket per annum
Bottom tax
Calculated on a maximum salary of DKK 552500.00 per annum
12.10%
Top tax
Calculated on a minimum salary of DKK 552500.00 per annum
15.00%
Municipal tax
Average contribution. Calculated on taxable income. Varies by municipality.
24.98%
Employment Terms
General
Minimum Wage
- There is no statutory minimum wage
- Bargaining agreements determines wages. The average minimum wage is approximately DKK110.00per hour
Working Hours
- Maximum of 48 hours per week (including overtime)
- There is no statutory meal interval
- Typical working hours are 08h00 to 17h00, Monday to Friday
Overtime
- Maximum of 48 hours per week over a 4 month period
Notice Period
Termination by employee- 1 month
Termination by employer-
- Employed between 0 and 6 months- 14 days’ notice
- Employed between 6 months and 3 years- 3 months’ notice
- Employed between 3 and 6 years- 4 months’ notice
- Employed between 6 and 9 years- 5 months’ notice
- Employed for 9 or more years- 6 months’ notice
Severance Pay
- Employed between 0 and 5 months- 1 month’s salary
- Employed between 5 months and 2 years and 9 months- 3 months’ salary
- Employed between 2 years and 9 months and 5 years and 8 months- 4 months’ salary
- Employed between 5 years and 8 months and 8 years and 7 months- 5 months’ salary
- Employed for 8 years and 7 months or more- 6 months
Probation Period
- There is no mandatory probation period
- A probationary period of up to 3 months may be agreed for white collar employees
Bonus
- There is no mandatory bonus
- In the financial and insurance sectors, bonus regulations apply to the executive management, board of directors, and employees who are considered risk takers
Public Holidays
Public holidays 2022
- January 1st – New Year’s Day
- April 14th – Maundy Thursday
- April 15th – Good Friday
- April 18th – Easter Monday
- May 1st – May Day
- May 13th – Great Prayer Day
- May 26th – Ascension Day
- June 6th – Whit Monday
- December 25th – Christmas Day
- December 26th – Boxing Day
Leave
Paid Leave / Vacation Days
- Paid leave
- Paid by employer
- 25 working days
Sick Leave
- Paid leave
- Paid by employer
- 30 days
Maternity Leave
- Paid leave
- Paid by Social Security
- 18 weeks
Paternity Leave
- Paid leave
- Paid by Social Security
- 2 weeks
Parental Leave
- Paid leave
- Paid by Social Security
- 32 weeks
Bereavement Leave
- Unpaid leave
- 26 weeks
Dependent Care Leave
- Paid leave
- Paid by employer
- 5 days
Adoption Leave
- Paid leave
- Paid by Social Security
- 56 days
Start hiring in Denmark today!