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Employer of Record (EOR) Denmark

An Employer of Record (EOR) in Denmark is a company that takes on the responsibility of being the legal employer for a worker. This includes managing payroll, benefits, and other employment-related tasks on behalf of the worker's actual employer.

Discover the key considerations and essential details you should be aware of before opting for an Employer of Record (EOR) in Denmark to help you with your global staffing needs.

EOR Denmark - Scope of Services

An employer of record in Denmark assist you with the following

  • Draft local employment contracts
  • Register employees with the social security agencies
  • Withholding taxes
  • Provide Benefits
  • Comply with the local labor laws in Denmark
  • End to End Payroll
  • Work Permit
  • Hiring and Payments

Employment Contracts in Denmark

As per the new employment laws in Denmark (ACT no. 501 of 16/05/2023), the following laws apply to the employees with joining date after July 1st 2023.

  • It is mandatory for employers to provide employment contracts if the contract duration is over 1 month and average working hours per week is over 3. 
  • Probation period cannot exceed 3 months for a white-collar worker.
  • The new law on “work on the side” makes it easier for employees to engage in a side job alongside the primary job. Employers can prevent an employee from taking up a second job only if there are valid reasons that justify the side job will impact the current job.
  • The new minimum requirements of working conditions ensure that the employees are not required to work beyond specific set hours and days. Furthermore, if an employer cancels a work assignment before a previously agreed-upon period, employees are entitled to receive compensation. This is beneficial for employees with unpredictable work schedules as it provides protection and compensation in case of sudden work assignment cancellations.
  • Employees are entitled to receive the employment contract before 7 calendar days of the joining date.

What should be included in Denmark employment contracts?

Employment contracts in Denmark must include the following information:

  • Employer and employee details: Names and addresses.
  • Location of work: Address or information about working in different places.
  • Description of work: Job title or description.
  • Start time of employment: Commencement date.
  • Expected duration: When it's not an indefinite employment.
  • Temporary employees: Identity of user companies (when known).
  • Probationary period: Duration and conditions.
  • Absence with pay: Duration.
  • Termination notices: Employee and employer notice periods.
  • Salary details: Base salary, allowances, and payment dates.
  • Working hours: Normal hours, overtime, and shift details.
  • Unpredictable work pattern: Variable schedules, guaranteed hours, reference hours, notice periods.
  • Right to education: Offered by the employer.
  • Collective agreements: Indication of which agreements apply.
  • Social security: Identification of social security institutions for contributions.

Types of Employment in Denmark

Type of Employment Description
Full-Time Employee The most common form, typically involving a 37-hour workweek and 5 weeks of annual leave.
Part-Time Employee Involves fewer weekly working hours than full-time positions.
Temporary Employment Includes temporary work and project work where employment is for a specified period mentioned in the contract.
Freelance/Consultant Self-employed individuals who provide services on a task-to-task basis. Employers do not provide benefits like leave or sick days. Freelancers are responsible for their work equipment and offices.
Student Positions Many students work alongside their studies, and some have student or intern positions with companies as part of their education.
Posted Workers Workers posted to Denmark by foreign companies have rights and obligations regulated by Danish law.
Salaried Employees Covered by the Act on Salaried Employees, typically working more than eight hours per week, in roles such as shop assistants, engineers, nurses, and doctors. They have specific rights under the law.
Young Workers Regulations apply based on age, with legal employment contracts starting at 18 years. Special rules and considerations are in place for individuals between 13 and 15 and those under compulsory education. Parents or guardians must be notified of the employment, working hours, and potential risks.

Minimum Wages in Denmark

There is no statutory minimum wage in Denmark. Average minimum wage is DKK 110 per hour, which is equivalent to 15.6 USD as per the USD to DKK conversion rate in October 2023.

Payroll Cycle

In Denmark, payroll is typically processed monthly and salary is paid on the last day of the month. There is no statutory payroll cycle in Denmark.

Probation Period and Notice Period

As per ILO, the probationary period in Denmark is 3 months. During probation, both the employer and employee can terminate the contract with a notice of 14 days.

As per the Act on Salaried Employees (funktionærloven), notice period after probation for the employer varies based on the employment duration.

Duration of Employment Notice Periods
0–6 months 1 month
6 months – 3 years 3 months
3–6 years 4 months
6–9 years 5 months
9+ years 6 months
Agreed probationary period of max. 3 months 14 days
Agreed temporary assignment of max. 1 month No notice

Working Hours

The standard working hours in Denmark is 37 per week. Working hours cannot exceed 48 hours in 4 months. Employees are entitled to take at least 11 hours of rest per day and 24 hours rest per week.


Employees are entitled to receive an overtime pay of 150% to 200% in Denmark. 50% of the standard pay is paid for the first 3 hours and 100% for the following hours.

13th Month Salary

It is mandatory to pay a 13th month salary as per the Danish labor laws. It is common for employers to pay a bonus as agreed in the employment contract.

Social Security in Denmark

Employee Payroll Contributions in Denmark

Employers DKK per month
Mandatory Pension Scheme (ATP) / Labor Market Supplementary Pension 189.35
Educational Scheme (AUB) 233.58
Occupational Injury (AES) / Labor Market Insurance 33
Danish Labour Market Fund (AFU) 0.58
Pension Finance Scheme (FIB) 47.58
Maternity Leave Fund 102.08
Industrial Injury Insurance 273.6
Administration of Holiday Fund 10.2
Administration of Frozen Holiday Pay 2
Ferietillæg (1% holiday appendix) 1
Total Employment Cost 930.00 to 1388.00 DKK per month

Employee Payroll Contributions in Denmark

EmployeesDKK per month
Social Security1135.80 DKK
Total Employee Cost1135.80 DKK

Overview of Denmark Social Security Contributions

Labour Market Supplementary Pension aka ATP (Arbejdsmarkedets Tillægspension) Livslang

ATP Livslang is a Danish pension fund. Employers pay two-third of the contributions and employees pay one-third of the contributions. Contribution rates are decided based on the category of workers and the working hours. Categories include payroll frequency of monthly, bi-weekly, weekly and casual workers.

The below contributions apply to all employees that work in Denmark or sent by a Danish employee to a foreign country and if the minimum working hours are 9 per week, 18 per 2 weeks and 39 per month.

For a regular employee with a standard working hours of 116 per month, the ATP contributions are 189.35 DKK per month.

Contributions rates for the employees paid on a monthly basis

A-rate Employee share Employer share Total per month
Min. 117 hours/month 94.65 DKK 189.35 DKK 284.00 DKK
78 - 116 hours/month 63.10 DKK 126.25 DKK 189.35 DKK
39 - 77 hours/month 31.55 DKK 63.10 DKK 94.65 DKK
Under 39 hours/month 0.00 DKK 0.00 DKK 0.00 DKK

Contributions rates for the employees paid for every 14 days

A-rate Employee share Employer share Total per 14 days
Min. 54 hours/14 days 49.80 DKK 99.60 DKK 149.40 DKK
36 - 53 hours/14 days 33.20 DKK 66.40 DKK 99.60 DKK
18 - 35 hours/14 days 16.60 DKK 33.20 DKK 49.80 DKK
Under 18 hours/14 days 0.00 DKK 0.00 DKK 0.00 DKK

Contributions rates for the employees paid weekly

A-rate Employee share Employer share Total per week
Min. 27 hours/week 24.90 DKK 49.80 DKK 71.10 DKK
18 - 27 hours/week 16.60 DKK 33.20 DKK 47.40 DKK
9 - 18 hours/week 8.30 DKK 16.60 DKK 23.70 DKK
Under 9 hours/week 0.00 DKK 0.00 DKK 0.00 DKK

Casual Workers

Casual laborers Employee share Employer share Total per hour
Per hour 0.67 DKK 1.34 DKK 2.01 DKK

Employers are liable to report and pay the contributions on a quarterly basis as below

Quarter Reporting date Due date Final date of payment
Q1 10 April 1 May 7 May
Q2 10 July 1 August 7 August
Q3 10 October 1 November 7 November
Q4 10 January 1 February 7 February

ATP Contributions will be revised in January 2024.

Employers' Education Contribution aka Arbejdsgivernes Uddannelsesbidrag (AUB)

The aim of AUB (Arbejdsgivernes Uddannelsesbidrag) is to facilitate work placements for students pursuing vocational education.

Quarterly contributions are 803.25 DKK and monthly contributions are 267.75 DKK.

Employers are required to contribute 803.25 DKK for every quarterly contribution of 852 DKK to ATP Livslang pension.

Occupational Insurance aka Arbejdsmarkedets Erhvervssikring (AES)

AES is a workplace injury scheme and it is to ensure the employees are covered under workplace injury. AES is public insurance and it covers personal and material damage that occurs at work.

Employers are required to contribute an AES rate and an industry injury fee. The fee is determined by taking into account two factors: 17 percent of the total AES contributions and 12 percent of the expenses linked to compensating workplace accident-related costs. On top of this, each company must also pay a standard fee of DKK 2 per full-time employee to manage administrative expenses related to this fee.

Time Paying-in slip sent Charge due for payment Payment date
1st quarter 1 Jan - 31 March Mid June 1 July 14 July
2nd quarter 1 Apr - 30 June Mid Sep 1 Oct 14 Oct
3rd quarter 1 July - 30 Sep Mid Dec 1 Jan 20 Jan
4th quarter 1 Oct - 31 Dec Mid March 1 Apr 14 Apr

Danish Labour Market Fund aka Arbejdsmarkedets Fond for Udstationerede (AFU)

In Denmark, posted workers refers to the foreign workers residing in Denmark for temporary employment. AFU is to safeguard the wages of posted workers in Denmark. AFU covers the employee salary in case the foreign employer fails to pay the wage. Subsequently, the foreign employer is listed as one who has failed to pay wages to their employee working abroad.

It is required to contribute to AFU alongside ATP and these payments are collected through Samlet Betaling. There is no contribution for AFU in 2023. AFU is subject to annual adjustments.

Samlet Betaling

Samlet Betaling functions as a central collection entity. In Denmark, employers have an obligation to make ongoing contributions to various mandatory programs designed to bolster the Danish labor market and enhance the welfare of their workforce. These contributions are systematically gathered by a unified collection agency known as Samlet Betaling.

Pension Finance Scheme aka Finansieringsbidrag (FIB)

FIB is a financial obligation to cover a portion of state’s expenses related to ATP contributions to groups including Individuals receiving unemployment benefits, sick pay, maternity/paternity benefits, and resource course grants. Wage earners who are enrolled in VEU (Voksen- og Efteruddannelse) programs for occupation-oriented adult and continuing education.

A portion of the Finansieringsbidrag also contributes to Lønmodtagernes Garantifond (LG), which serves the purpose of ensuring that employees can receive their owed wages, pensions, and holiday allowances even if their employer goes bankrupt.

Employers are required to contribute 123.25 DKK to FIB for every quarterly contribution of 852 DKK to ATP.

Maternity Leave Fund aka Barselsfonden provides financial support for maternity leave. It's in addition to Udbetaling Danmark's benefits. This applies to both employers and self-employed individuals. There's a quarterly contribution. To qualify:

  • Keep paying employees on maternity leave.
  • Be eligible for Udbetaling Danmark's Benefits.
  • Ensure the employee's hourly wage is above DKK 122.97 (including holiday pay). refunds up to 37 hours per week, even for employees at multiple workplaces.

Employers are required to contribute quarterly 0.85% of the total payroll.

The following are eligible to receive a refund from the Barselsfonden:

  • Employers who have paid wages to an employee who is on maternity leave.
  • Self-employed women who are on maternity leave.

Industrial Injury Insurance aka erhvervsskadeforsikring

Erhvervs Skadeforsikring is Private insurance and it covers damage to the company's property, damage to other companies or individuals, and damage to the company's employees. It is funded by employers and the government. Employers contribute 80% and the balance is 20% through government subsidy. Employers' premium is decided based on the size, industry and the coverage selected by the employer.

Administration of Holiday Fund aka Administrering af feriefond kontingent.

Arbejdsmarkedets Feriefond (AF) is the Danish Labour Market Holiday Fund. It is a public body that uses its funds to pay for holidays for disadvantaged families and children. The fund is funded by contributions from employees and employers, as well as a government subsidy.

The contribution rates for AF are as follows:

  • Employers: 0.29% of total payroll
  • Employees: 0.12% of gross salary

The government subsidy for AF is equal to 20% of the total contributions from employers and employees.

Administration of Frozen Holiday Pay aka Lønmodtagernes Feriemidler

Lønmodtagernes Feriemidler is an important part of the Danish vacation system. The fund helps wage earners save up for vacation and ensures that they have access to their vacation funds when they need them.

All salaried employees are entitled to 25 vacation days per year. These vacation days can be availed or paid out as vacation pay. Employees can also get paid vacation pay incase of unemployment.

Employers will receive a letter from LF if the frozen holiday money is due for payment by July. Some scenarios include employees reaching national pension age or left the labor market or passed away. Employers are required to pay the due by September 1st.

Holiday Bonus aka Ferietillæg

Ferietillæg means holiday allowance refers to the additional payment made to employees in Denmark for their annual vacation period. This payment is 1% of the employee's salary and is intended to cover their expenses during their vacation.

Denmark Overview

Time zoneUTC−04:00 — Thule Air Base in Greenland
Total Time zones5
Working hours per week37
Working weekMonday–Friday
Typical hours worked7.4
The personal Tax filing deadlineThe tax return must be filed by 1 May or no later than 1 July in the year following the relevant income year.
Financial Year1st January to 31st December
Date formatdd/mm/yyyy
CurrencyDanish Krone (DKK)
VATthe standard rate is 25%

Personal Income Tax Rates in Denmark

Denmark has a progressive personal income tax system, meaning that the higher your income, the higher proportion of your income you will pay in tax. The state income tax rate in Denmark ranges from 0% to 52.1%, with the top rate applying to incomes over DKK 552,500 (in 2023).

Income TaxMarginal tax including labor market tax
DKK 0 - 46,7008%
DKK 46,701 - 544,80042.83%
Over DKK 544,800 56.5%

Taxes (2022)Income basisTax rate (%)
State taxes:
Bottom taxPersonal income12.1%
Top taxPersonal income15%
Local taxes:
Municipal tax (average)Taxable income24.982%
Labour market taxPersonal income8%
Share tax:
DKK 0 to 57,200Share Income27%
More than DKK 57,200Share Income42%

Severance Pay

Severance pay in Denmark is not mandatory as per the Danish labor laws. However it is common to pay severance pay to the senior employees. Severance pay for employees with length of employment over 12 years is equal to one month’s salary. Severance pay for employees with length of employment over 17 years is equal to three month’s salary.

Leave Policy in Denmark

Leave Type Details
  • New Year's Day: 1st January
  • Maundy Thursday: 1st April (Thursday before Easter Sunday)
  • Good Friday: 2nd April
  • Easter Monday: 5th April
  • General Prayer Day: 30th April (The 4th Friday after Easter)
  • Ascension Day: 13th May (39 days after Easter Monday)
  • Pentecost Sunday: 23rd May (50 days after Easter)
  • Whit Monday: 24th May (7th Monday after Easter)
  • Christmas Eve Day: 24th December
  • Christmas Day: 25th December
  • Second Day of Christmas: 26th December
Paid Time Off (PTO) Vacation/Annual Paid Leave: Up to 10 weeks in the transition year, with limits.
Use-it-or-lose-it policy: Unused holiday days can be carried over or agreed upon differently.
PTO payout at termination: Accrued holiday pay is provided when the employment ends.
Maternity, Paternity, and Adoption Leave Maternity Leave: Expecting mothers get various periods of paid leave, with a maximum of 46 weeks.
Paternity Leave: Fathers have paternity leave and parental leave with extensions.
Adoption Leave: Adoptive parents have leave based on the type of adoption.
Sick Leave Employers pay for the first 30 days of sick leave, followed by social benefits for up to 22 weeks, subject to specific requirements.
Dependent Care Leave Employees can get paid leave for specific situations, like hospitalization of their children under 14 years.
Jury Duty and Voting Leave Not specified by law.
Bereavement Leave Employees who lose a child before age 18 are entitled to 26 weeks of unpaid leave, including co-mothers, adoptive parents, and future adoptive parents.
Military Leave Employees between 18 and 30 are liable for national military or civil service, with protections.

In Denmark, Employer of Record (EOR) services simplify global workforce expansion by handling local employment regulations. This allows businesses to concentrate on their core operations while ensuring legal compliance and efficient payroll management. Denmark's strong economy makes it an appealing destination for international companies, and EOR services enable them to navigate the local labor market smoothly, saving time and resources.

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