Hiring guide in Denmark

Contributions & taxes

Employer tax

The total employer cost is around 13,721 DKK + 1%. 

Corporate tax

The corporate tax rate in Denmark is 22%.

Employee tax

The total employee tax is 10.5%.

Income tax

The individual income tax ranges from 8% to 56.5%. It’s calculated progressively: 

• Up to 50, 761 DKK – 8%
• Up to 544, 800 DKK – 42.03%
• Over 544, 800 DKK – 56.5%

To calculate the salary and taxes in Denmark please click here.

Payroll cycle

The payroll cycle in Denmark is usually on a monthly basis, and employers must make payments on the same day each month before the end of the month.

Is there a 13th salary in Denmark?

It’s not legally required to pay a 13-month salary payment; however, employers often offer and give employees bonuses.

Labor rules

Probation period

Generally, in Denmark, probation periods last up to 3 months. However, the probation period is dependent on the role and what’s stipulated in the employment agreement.

Notice period 

The notice period is dependent on the length of employment and the Act of Employment. The Act of Employment stipulates:

• 0 – 3 months of service = 14 days’ notice
• 3 – 6 months of service =  1 month’s notice
• 6 months  – 3 years  of service =  3 months’ notice
• 3 – 6 years of service = 4 months’ notice
• 6 – 9 years of service =   5 months’ notice
• More than 9 years of service = 6 months’ notice

Employee notice during the probation period is two weeks, after the probation period ends, it increases to one month.

Severance period

If the termination is business-related, the severance package will depend on the situation’s specifics. If the company goes out of business, the employee’s position is eliminated, or the same company rehires the employee, the severance payment will be the same as the employee’s average monthly wage.

In the event of an employee-related termination (e.g., due to long-term disability, retirement age, significant changes in working circumstances, or mandatory military service), severance compensation will be calculated based on the employee’s length of service as follows:

• Less than a year of service: 10x daily average salary;
• From 1 year to 5 years of service: 25x daily average wage;
• From 5 to 10 years of service: 30x daily average salary;
• From 10 to 15 years of service: 35x daily average salary;
• More than 15 years of service: 44x daily average salary.

Working hours

The average working hours in Denmark are 37.5 hours per week, from Monday to Friday. The maximum hours that can be worked overtime is 48 hours, which are paid at an overtime compensation rate.

Leave and benefits

Public holidays

National public holidays in Denmark include:

1. New Year’s Day
2. Maundy Thursday
3. Easter
4. Great Prayer Day
5. Ascension Day
6. Whitsun
7. Constitution Day
8. Christmas Day
9. 2nd Day of Christmas

Sick leave

If the employee has been continuously working for the same employer for at least 74 hours or for the last eight weeks, the first 30 days of sickness are covered by the employer. After the first 30 days, the municipality will cover the sickness benefit, given that the employee has worked at least 240 hours in the last six months or has been employed for at least 40 hours in the last five months.

Maternity leave & Paternity leave

Pregnant employees are entitled to 18 weeks of maternity leave, including four weeks before the due date and 14 weeks after birth giving. The first weeks after birth giving are mandatory. These employees receive 50% of their regular salary during the 18 weeks of maternity leave. 

Fathers can take two weeks of paternity leave during the mother’s 14 weeks of maternity leave. There’s no legal obligation for the employer to provide a salary during paternity leave. However, it’s a common practice under collective and individual agreements to receive full salary for a certain period during paternity leave.

Other leave

Bereavement leave

Employees who lose a child before the age of 18 are entitled to 26 weeks of unpaid leave.

Parental leave

After the initial 14 weeks of maternity leave, each parent can take 32 weeks of leave. This period can be extended to 8 or 14 weeks. But this will decrease the amount of parental allowance received monthly.

Marriage leave

Every employee can take 1 day off for their own wedding, either on the wedding day or a day in connection to the wedding. They also get 1 day off for their child’s wedding.

Special leave

Employees between 18 and 30 years old can be called up for national military service by ballot. The period of service usually lasts up to four months. The employer must grant employees leave for national service. Employees are protected against dismissal for requesting and taking such leave.

What are the minimum vacation days?

Danish employees can take up to 25 days of paid annual leave.

Insurance

Health security & private insurance

Anyone who has worked for an employer for at least three months within the previous fifteen months is entitled to free medical and dental care through the Social Security Administration.

*Native Teams can support you in finding the best private insurance in the country. Contact us, and we will send a comparison of insurance packages and prices.*

Visa

Relocation and work permits

Native Teams will apply for your work visa in the nation on your behalf and serve as your Employer of Record. All the required documents can be uploaded using our app. Until you have your work and residency visa, Native Teams will support you by providing you with frequent information on the progress.

How long is the visa/work permit process?

2 to 4 weeks depending on the authorities and provided documents.

Which documents do you need?

To apply for a visa/work permit in Denmark, upload the documents from our onboarding list (relocation to log in/pricing). 

Why use Native Teams for hiring in Denmark?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.