Denmark Payroll Services

Q: How does payroll work in Denmark?

In Denmark, there are no mandatory pension contributions. Any scheme that is opened is negotiated by the employee and employer on a case-by-case basis. Such schemes can be split between both parties, or paid entirely by the employer. Employers are required to contribute into Samlet Betaling on a quarterly basis. This is an overarching Government Body that collects and contributes funds into a variety of schemes aimed at improving the local labour markets for employers.

Q: What are the general employment rules?

Full time employment in Denmark is 37 hours per week. There are no Danish laws surrounding Overtime, however, the EU Working Time Directive does apply. This states that employees must not work more than 48 hours in any given week. In cases whereby Overtime is offered, it is common for a rate of 150% to be payable for the first three hours and 200% thereafter.

Q: What about dismissing an employee?

To dismiss an employee in Denmark, a process must be followed and sufficient grounds supplied. We recommend speaking with one of our Employment Experts before engaging in the termination process.

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Denmark Payroll Services

Hire employees in Denmark

Currency

Danish Krone (DKK)

Population

5,824,857

Capital

Copenhagen

Official language(s)

Danish

Date format

dd/mm/yyyy

Fiscal year

1 January – 31 December

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Denmark Payroll

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Denmark HR

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Employing in Denmark

In Denmark, there is no statutory minimum wage set by the government. Wages are determined through collective bargaining agreements (CBAs) between employers and trade unions, and they vary between industries and sectors.

Denmark has a progressive income tax system and is known for its high tax rates and comprehensive welfare system. In addition, different types of income are subject to different tax rates. National personal income tax rates range from 0% to 15%, and municipal tax rates range from 22% to 27%.

Denmark has a well-funded, multi-pillar pension system where both employees and employers contribute to a workplace pension and a labour market pension. The average contribution is around 15%, with the employers’ share of this being around two thirds (between 8-10% of an employee’s basic salary).

In Denmark, a standard working week consists of 37 hours, typically between Monday and Friday and not exceeding 8 hours per day. Any hours exceeding this standard amount are considered overtime, for which rates of pay can be anything between 150-200% of the employee’s regular rate of pay.

Working hours in Denmark are governed by the Working Time Directive Act, which stipulate that an employee cannot work more than an average 48 hours per week, calculated as an average over a 4-month period.

Employee’s leave consists of several types:

Statutory time off or paid leave, which is 25 days per year for full-time employees
Public holidays (there are 8 public holidays per year in Denmark)
Maternity, Paternity and Parental leave
Sick leave
National Military or Civil Service Leave

Termination of an employment contract in Denmark should follow a fair process for the dismissal to be lawful. Reasons for dismissal can include, but are not limited to:

Misconduct
Capability
Redundancy
Other legal or substantial reasons

All dismissals require a minimum notice period to be given, which is dependent on the employee’s length of service.

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Frequently Asked Questions

In Denmark, there are no mandatory pension contributions. Any scheme that is opened is negotiated by the employee and employer on a case-by-case basis. Such schemes can be split between both parties, or paid entirely by the employer.

Employers are required to contribute into Samlet Betaling on a quarterly basis. This is an overarching Government Body that collects and contributes funds into a variety of schemes aimed at improving the local labour markets for employers.

Full time employment in Denmark is 37 hours per week. There are no Danish laws surrounding Overtime, however, the EU Working Time Directive does apply. This states that employees must not work more than 48 hours in any given week. In cases whereby Overtime is offered, it is common for a rate of 150% to be payable for the first three hours and 200% thereafter.

To dismiss an employee in Denmark, a process must be followed and sufficient grounds supplied. We recommend speaking with one of our Employment Experts before engaging in the termination process.