Overview

Capital
Copenhagen
Currency
Danish Krone
Date Format
dd/mm/yyyy

Taxes

Employer
DKK 2,272.00 - Danish Labour Market Supplementary Pension Scheme (ATP)
DKK 2,700.00 - Employersu2019 Reimbursement System (AUB)
DKK 283.00 u2013 6,239.00 - Labour Market Insurance (AES)
DKK 8.00 - Labor Market Fund for Expatriates (AFU)
DKK 546.00 - Funding Contribution (FIB)
DKK 950.00 - Maternity Leave Fund
DKK 1,176.00 - DKK 24,441.00 - Occupational Injury Insurance
Employee
DKK 1,135.80 - Social Security
8.00% - Up to 50,000
40.20% - 50,000 - 524,282
56.50% - Over 524,282

Minimum Wage

General

No minimum wage. However, for public and private sectors, collective barganing agreement states approximately DKK 110 per hour.

Working Hours

General

Full time employment is 37 hours weekly. A work week should not exceed 48 hours, including overtime.

Overtime

Denmark does not have a mandatory or general overtime regulation. Rules for overtime should be stated in the collective bargaining agreement. The typical overtime pay is 50% pay for the first three hours, and 100% pay for subsequent hours, holiday or Sunday work.

VAT

General

25% standard rate.

Mandatory Benefits

Pension Fund

The Danish pension system is comprised of three pillars; The national public pension, labor market pension and company-based pension (voluntary), and the individual pension (voluntary).

All employers and employees in Denmark with must make contributions to the supplementary old-age pension (ATP). The contribution rates depend on how the employee is paid.

Private pension plans are very common, the average employer contribution can reach 15% of the pensionable salary. The pensionable earnings are calculated on the monthly base salary of January × 12,24.

Social Security

Contributions are made to the following:ATP –An employer and employee contribution made towards lifelong pension.AUB–Contributions from employers that goes to funding apprenticeships andvocationaltraining. AES –Contributions made towardsoccupational injury and disease. AFU The Danish Labor Market Fund for Posted Workers is a fund ensuring that employees posted to Denmark receive wages owing to them. Maternity Leave Fund-All Danish employers are obligated to contribute to a maternity leave fund. There are public as well as private maternity leave funds. The annual contribution is approximately EUR 128 per full time employee.

Total cost for both social security and occupational insurance are about DKK 10,000-12,000 per employee.

Additional Benefits

Salary is paid in 12.24 instalments. Special holiday allowance accounts for the additional 0.24 as it is paid at a rate of 2%.

On September 1, 2020 a new Holiday Act is due to enter into force, which significantly will change the Danish holiday system. (Danish Holiday Act No 60 of 30 January 2018)

Payroll

Payroll Cycle

Salaries are usually paid on monthly basis. Paydays vary from the last day of the month to the 15th of the following month.

Termination

Termination Process

Employees are given from 1 month to 6 months notice depending on the length of their employment in the company.

Advance Notice

Under the labor law in Denmark, salaried employees are entitled to a notice period of 1-6 months, depending on the length of employment. 

Severance Pay

There is no general statutory regulation on severance pay, but salaried employees who have been in continuous employment for between 12 to 17 years are entitled to a severance payment of between 1 to 3 months salary. Some CBAs also include rules on severance pay that depend on seniority.