No law in Denmark mandates minimum wage. The minimum wage is decided through collective bargaining agreements in each sector. The most common minimum wage across all sectors is 110 DKK per hour.

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

In Denmark, it is not a legal requirement to pay a 13th-month salary payment; however, employees are known to offer employee bonuses.

According to the Working Time Directive Act, the maximum average working hours are 48 hours per week, calculated as an average over four months. A general working week for a Danish employee is five days, working on average 37.5 hours per week.

All work more than the standard working hours a week is to be paid as overtime and is regulated by the employment contract or collective agreement. When an employee is requested to work overtime or work on holidays, there are maximums in relation to the number of hours allowed. These maximums are 48 hours a week.

All overtime hours in excess of 37 hours a week are paid at an overtime compensation rate of between 150.00% and 200.00% of the employees’ regular pay rate, depending on the collective bargaining agreement in place.

In Denmark, the standard paid leave entitlement for full-time employees is 25 days per year, accrued at the rate of 2.08 days of paid leave for each month of service.

The Danish holiday pay system operates with two different systems for pay during holidays. An employee is either entitled to pay during holiday (i.e., payment of the usual salary or wages) and a supplement of 1% (holiday supplement), or holiday allowance consisting of 12.5% of the employees’ salary or wages. The holiday allowance must be deposited with FerieKonto so that the money is available to be paid out to the employee.

The paid leave entitlement is accumulated from 1st September through to 31st December of the following year.

During the first 30 days of illness, the employee is entitled to receive 50.00% of their regular wages, so long as they have fulfilled the conditions to be eligible for this entitlement. From the 31st day of sickness until 22 weeks, the social security assumes the responsibility and compensates the employee 90.00% of their regular salary up to 4,355 DKK.

A pregnant employee is entitled to 18 weeks of maternity leave, four weeks preceding the due date, and 14 weeks after the birth, where the first two weeks are mandatory.

Employees who meet statutory eligibility requirements are covered by the Danish Salaried Employees Act and are entitled to 50.00% of their regular salary from the employer for four weeks before the expected date of birth until 14 weeks after the actual date of delivery.

The father is entitled to take two weeks of paternity leave during the mother’s 14-week period of maternity leave.  There is no legal obligation for the employer to pay salary during paternity leave. However, it is common practice in Denmark under collective agreements and under some individual agreements that employees receive full salary from the employer for a certain period during leave.

Following the initial 14 weeks of maternity leave, each parent has the right to take up to 32 weeks of leave. This time can be extended by either 8 or 14 weeks. However, this will decrease the amount of parental allowance received monthly. One of the parents may choose to defer between 8 to 13 weeks of leave which can be kept for a continuous period before the child is one year old.

During the parental leave (14 weeks after receiving the child), adoptive parents are entitled to leave to the same extent and regulation as biological parents.

In Denmark, employees between 18 and 30 are liable to be called up for the national military or civil service by ballot, while both men and women can volunteer for national service. The normal period of service is four months. Employees must be granted leave by the employer during national service and are protected against dismissal regarding requesting or taking such leave.

Employers can terminate a fix term contract for the following reasons – business, personal or worker’s’ misconduct. It requires notice and a written explanation for the termination. If the reason is misconduct, a warning needs to be given and the employee gets a chance to explain actions.

In accordance with the labor law in Denmark, the notice period is dependent on the length of employment. In general, the notice period is between one and six months.

The Danish Salaried Employees Act stipulates the following notice periods, which are based on the individual employee’s length of service:

Seniority                                                                      Employer’s notice period

5 months of employment or less:                           1 months’ notice effective as of the end of a month.

2 years and 9 months of employment or less:      3 months’ notice effective as of the end of a month.

5 years and 8 months of employment or less:      4 months’ notice effective as of the end of a month.

8 years and 7 months of employment or:             5 months’ notice effective as of the end of a month.

More than 8 years and 7 months of employment:   6 months’ notice effective as of the end of a month.

There are no statutory laws on severance pay; however, salaried employees who have been continuously employed for 12 or 17 years are entitled to severance pay corresponding to 1 month or three months’ salary if the employer terminates the employment.

The probationary period in Denmark is dependent on the type of role and is stipulated within the employment agreement. In general, probation periods are up to three months.

Danish law provides many options for employers of foreign nationals.

Denmark is a member of the European Union (EU) and the Schengen Area. Nationals of Finland, Iceland, Norway, and Sweden are free to reside, study and work in Denmark. However, suppose the employee is an EU/EEA or Swiss citizen and intends to live in Denmark for more than three months. In that case, the employee must apply for a registration certificate at the International Citizen Service or the State Administration (in Danish: “Statsforvaltningen”) upon arrival in Denmark.

If the employee is a citizen of a country outside the EU/EEA or Switzerland, the employee must apply for a residence and work permit before entering Denmark. Suppose the employee already resides legally in Denmark. In that case, the employee can submit their application for a residence and work permit at newtodenmark.dk, at a Danish police station, or the Citizen Centre of the Danish Agency for International Recruitment and Integration.

The standard rate of VAT in Denmark is 25.00%.