Denmark

Employment

Most commonly used employment contracts are just agreements between the employee and the employer. However all employers are supposed to provide the employee by law a written contract that describes their working conditions and benefits.

Payroll

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

HR & Labor

Working hours: Employees are allowed to work 48 hours in total including overtime and night shifts in 7 day period. Employees younger than 15 years are allowed to work 12 hours per week during school year and 35 hours per week during vacation time. Employees younger than 18 years old must get a break after working 4.5 consecutive hours. Also they are not allowed to work between 8:00 pm and 6:00 am.

Immigration

If the employee is not a citizen of the Nordic countries and the EU/EEA, then they must apply for a work permit prior to entering Denmark.

Minimum Wage

No minimum wage

Pension Fund

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.

Severance Payments

The severance payment is 1 month’s salary if the employee has been in the company for at least 12 years but less than 15 years. Payment of 2 months’ salary if the employee has been in the company for 15 years but less than 18 years. And three months’ salary if they been in the company for over 18 years.

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.

Termination Procedure

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

Sick Days

First 14 days of the employee’s sick leave is paid by the employer. After the first 14 days, the state pays the sick leave. During leave, employees receive 90% of their salary with a maximum of DKK 3,016.

Public Holidays

There are 11 public holidays.

Vacation Days

Employees are entitled to 5 weeks each full calendar year (25 days).

Holiday Allowance

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%.

Maternity Leave

Maternity leave of 4 before birth and 14 weeks after birth

Paternity Leave

Parental leave of 2 weeks before birth and 14 weeks after birth

Parental Leave

Parents are entitled to receive 52 weeks of of paid parental 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 years old.

Social Security

Danish social security is modest compared to most other countries, contribution are made both by employee and employer.

The average employer contributions are approximately EUR 2,000 per year per full-time employee.

The annual cost for the employee is DKK 1,080 , this amount is withheld by the employer.

Expat Benefits

Expats in Denmark are entitled to special tax rate of 32% for the first 5 years of living there. In order to qualify for the special tax rate, the employee’s monthly salary should be minimum DKK 69,300 after deductions. The employee may not have a role in the management of the company or have 25% or more of the shares in the five years prior to the employment start. Also the employee must have not worked in the company in three years before moving to Denmark or one year after the previous employment in Denmark with tax liability. Lastly the expat can't be a previous tax resident in Denmark or have been taxed in Denmark in the past 10 years.

VAT

VAT is 25% standard rate.