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How to hire and pay employees in Denmark
Slasify
Jun 21, 2025
| Key Takeaways |
|---|
| 1. Payroll operates monthly, with no statutory minimum wage; pay and bonuses are typically set by collective agreements. |
| 2. Personal income tax is progressive up to 15%, with additional municipal and church taxes depending on location and membership. |
| 3. Statutory contributions apply to both employers and employees, including ATP, AM-bidrag, maternity scheme, and occupational accident insurance. |
| 4. Standard working hours are 37 per week, with regulated overtime, breaks, daily and weekly rest periods, and limits on annual overtime. |
| 5. Annual leave is 5 weeks, plus public holidays, sick leave, maternity/paternity leave, parental leave, and other statutory leaves. |
| 6. Termination requires statutory notice or just cause; severance applies for employees with 12+ years of continuous service. |
| 7. Probationary period is usually 3 months, with notice requirements based on contract length; leave, overtime, and bonuses follow agreements. |
Discover the global hiring and employment landscape in Denmark – a European leader in sustainability, innovation, and quality of life. With its highly skilled workforce and strong economic stability, Denmark offers an ideal environment for businesses seeking to expand in the Nordic region.
Personal Income Tax
The employee's taxable income base is calculated on what is referred to as the employee's personal income, with addition of positive net income from capital. Tax is only payable on the part of personal income that exceeds the taxpaye's personal allowance.
| Taxable Income (DKK) | Progressive Tax Rate (%) |
|---|---|
| Up to 611,800 | 12.01% |
| Over 611,800 | 15% |
Members of the Danish National Evangelical Lutheran Church (Folkekirken) pay church tax. The size of the church tax varies from municipality to municipality, and it is collected together with the other direct taxes. Members of another church or religious association pay contributions to their respective association.
Local Taxes
All citizens in Denmark must also pay tax to their municipality, which is calculated as a percentage of their income. Each municipality determines the tax percentage that its citizens must pay.
Statutory Contributions
Employer Contributions
| Contribution rate | Note | |
|---|---|---|
| ATP Contribution | DKK 198 per month | This applies to a full-time, monthly paid employee. Contributions may vary depending on the employee's regular working hours. |
| Maternity Compensation Scheme | DKK 1,550 per year (or DKK 387.50 per quarter) |
This applies to a full-time, monthly paid employee. Contributions may vary depending on the employee's regular working hours. Contributions are exempt for students under the age of 25. |
| Occupational Accident Insurance | Varies | Varies depending on the insurance company and plan. |
Employee Contributions
| Contribution rate | ||
|---|---|---|
| Labor Market (AM-bidrag) | 8% | |
| ATP Contribution | DKK 99 per month |
This applies to a full-time, monthly paid employee. Contributions may vary depending on the employee's regular working hours. This contribution will be deducted from the employee's pay before the calculation of income tax. |
It should be noted that the labor market contributions are actually a tax, deducted from employees' gross pay, or self-employed persons' income from self-employment.
Payment of Wages
Hourly wages, day wages and piecework wages are, as a rule, paid out once or twice a month, and monthly wages are paid out monthly.
Minimum Wage
There is no statutory minimum wage in Denmark. Instead, pay is typically regulated by collective agreements or negotiated individually.
Statutory Bonus
There is no statutory bonus in Denmark.
Termination
Employers must always have a substantial reason for firing an employee, such as the employee's unfitness, cooperative problems, or a situation in the company which requires dismissal.
If the employer is not satisfied with their employee's efforts, it is normal for the employer to provide one or several warnings, so that the employee has the opportunity to correct the situation.
It is not necessary for a termination to occur in writing in order for it to be legally binding. However, it is recommended that the employee requests a written termination for the sake of having evidence. If the employee resigns, this should also occur in writing.
Notice Period
Under the Act on Salaried Employees, the employee has to give a month's notice before their resignation, while the employer is subject to the following notice period:
| Length of service | Notice period |
|---|---|
| Up to 6 months | 1 month |
| 6 months–3 years | 3 months |
| 3–6 years | 4 months |
| 6–9 years | 5 months |
| 9+ years | 6 months |
Severance Pay
Employees who are dismissed shall be entitled to receive severance if they have been continuously working for the same company for at least 12 years.
| Length of service | Severance pay |
|---|---|
| 12–15 years | 1 month's salary |
| 15–17 years | 2 months' salary |
| 17 or more years | 3 months' salary |
Probationary Period
Parties to the employment contract may agree to a probationary period that usually lasts for 3 months. In case of fixed-term contracts, the probationary period may not exceed 25% of the duration of the contract.
| Duration of probationary period | Notice period |
|---|---|
| Up to 1 month | No notice |
| Up to 3 months | 14 days |
Note: No notice is required from the employee during the agreed probationary period of up to 3 months.
Work Time Rules
Standard Working Hours
As a general rule, working hours are fixed in a collective agreement and in the great majority of sectors, standard working hours are 37 hours per week. Working hours are primarily between Monday to Friday in the time frame between 6:00 a.m. and 6:00 p.m.
Break Period
Employees are typically granted a break period of 30 minutes. At certain workplaces, these breaks are paid as part of general working hours, while at others it is unpaid.
The EU Working Time Directive defines a break during any working day lasting more than 6 hours, the duration of which depends on its purpose.
Overtime
Overtime can either result in compensatory leave as a supplement to the 5-week annual leave, or it can be paid out as part of one's salary.
A collective or individual agreement typically regulates the premium for any overtime work performed. It is important that the contracts contain clear rules pertaining to whether the overtime work is to be compensated for, or paid out as salary, and how over time is to be settled.
The EU Working Time Directive defines weekly working hours that may not exceed an average of 48 hours, including overtime.
Weekly Rest Days
Working hours must be organized in such a way that employees are given a rest period of at least 11 consecutive hours within each 24-hour period.
Furthermore, within each period of 7 days, the employees must have a weekly day off that is immediately adjacent to a daily rest period. This day off must, as far as possible, fall on a Sunday.
A collective or individual agreement typically regulates the compensation for any work performed on the employee's weekly rest days.
Holiday and Leave Entitlements
Public Holidays
Employees are generally entitled to time off during public holidays, though whether they are paid a premium for work during such days being regulated by their individual or collective agreement. There are 10 days of public holiday in Denmark for 2025.
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Maundy Thursday | April 17 |
| Good Friday | April 18 |
| Easter Sunday | April 20 |
| Easter Monday | April 21 |
| Ascension Day | May 29 |
| Whit Sunday | June 8 |
| Whit Monday | June 9 |
| Christmas Day | December 25 |
| Boxing Day | December 26 |
Annual Leave
Employees shall accumulate 2.08 days of paid leave per month of employment during the year of accumulation, corresponding to 5 weeks per year.
The year of accrual runs from September 1 to August 31 and, starting from September 2020, employees can earn and take their holiday over the same period. Employees are entitled to 3 consecutive weeks of primary leave in the period from May 1 to September 30.
| Year of accrual | Holiday period |
|---|---|
| September 1 to August 31 | September 1 to December 31 of the next year |
Monthly-paid employees with paid annual leave shall receive a holiday bonus equivalent to 1% of the salary received during the year of accumulation in addition to their usual salary during their leave. Other employees shall receive a holiday allowance corresponding to 12.5% of the salary received during the year of accumulation.
Note: The employee shall be entitled to take 5 weeks of annual leave in each holiday period, regardless of whether the right to paid leave has been earned. If an employee covered by Section 16(1) of the Holiday Act takes holiday without payment from the employer, 4.8% of their monthly salary shall be deducted for each day of leave.
Sick Leave
If an employee is employed as per the Act on Salaried Employees, they shall be entitled to full pay during sick leave as a general rule.
The employer pays sickness benefits to employees in the event of absence due to illness for 30 calendar days from the first day of absence. Afterwards, the sickness benefits shall be paid for by the municipality,
The right to sickness benefits from the employer, unless otherwise exempted, is conditional on the employee having been employed continuously for the last 8 weeks prior to the absence with the employer in question and, during this period, having been employed by the employer for at least 74 hours.
Parental Leave
Parents are entitled to a total of 48 weeks of leave with maternity benefits after the birth of the child, with each parent having 24 weeks of leave. Mothers are additionally entitled to 4 weeks of leave before giving birth with maternity benefits.
The 48 weeks of leave are divided equally between the parents, so that each parent generally has 24 weeks of leave after the birth with maternity benefits. Out of the 24 weeks, 2 of the weeks must be taken in connection with the birth.
For employees, an additional 9 weeks are earmarked. This means that a total of 11 weeks of leave with maternity benefits are earmarked and therefore cannot be transferred to the other parent.
Note: The 9 additional weeks of earmarked leave must be taken before the child turns 1 year old.
Other Leave
| Leave | Paid/Unpaid | Duration | Note |
|---|---|---|---|
| Bereavement Leave | Unpaid | 26 weeks | For employees who lose a child under 18. This also applies to co-mothers, adoptive parents and future adoptive parents. |
| Carer's Leave | Unpaid | 5 working days per year | This leave can be taken to look after the employee's seriously sick children, parents, partner or others living in the same household. |
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