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Hire and manage employees in Denmark

As your Employer of Record (EOR) in Denmark, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.
Last updated:
July 16, 2025
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Quick facts

Denmark, located in Northern Europe, is known for its high standard of living, progressive social policies, and a strong welfare system. The economy is primarily driven by services, industry, and agriculture, with Denmark being a leader in renewable energy. Its labor market is characterized by high wages, strong unions, and a flexible employment system, often referred to as "flexicurity".

Employment Contracts

In Denmark, most employment contracts are indefinite unless otherwise specified. Fixed-term contracts can only be renewed more than once if there is a justified reason. Employment relationships are typically formalized with clear written agreements, although verbal agreements are also legally binding.

Probation Period

There are no mandatory laws on probation periods, but it is common to agree upon a 3-month probation period. During this time, either party can terminate the contract with 14 days' notice. For employees recruited from outside the Capital Region, the employment contract usually includes a probationary period.

Working Hours

The standard workweek in Denmark is 37 hours, typically from Monday to Friday between 6:00 AM and 6:00 PM. Workers are entitled to a 30-minute lunch break, which may or may not be paid, depending on the employer. The EU Working Time Directive mandates at least 11 consecutive hours of rest per day and a 24-hour rest period per week. Weekly working hours should not exceed 48 hours, including overtime.

Vacation Days

Employees in Denmark are entitled to 5 weeks of paid vacation per year, earned continuously from 1 September to 31 August. For every month of employment, employees earn 2.08 days of paid leave. If an employee hasn't worked a full calendar year, they still have the right to take vacation, though it may be unpaid.

Sick Leave

Employees in Denmark are typically entitled to full pay during illness for a limited period. Employers are required to pay sick leave for the first 30 days of illness. The amount is calculated based on the employee’s average earnings over the past 3 months, with a maximum of DKK 4,460 per week. After this period, the local authorities may provide sickness benefits if the employee meets certain eligibility requirements.

Wages and Salary Payment

Salaries in Denmark are generally paid on the last banking day of the month. There is no national minimum wage, but in 2022, most wages are around 110 DKK per hour (approximately $16.60 USD). Gross monthly salaries for full-time positions average 17,000 DKK (around $2,580 USD), although taxes can be quite high, sometimes exceeding 50%.

Public Holidays

Denmark recognizes several public holidays, including:

  • January 1: New Year’s Day
  • March-April: Easter (Maundy Thursday, Good Friday, Easter Sunday, Whit Monday)
  • Great Day of Prayer (Friday before the fourth Sunday after Easter)
  • Ascension Day (40 days after Easter Sunday)
  • Pentecost (Whit Sunday and Whit Monday)
  • December 25: Christmas Day
  • December 26: Boxing Day

Employer Taxes

Employers in Denmark contribute to social security through the following:

  • ATP (Supplementary Pension): DKK 2,271.6 annually.
  • Maternity Fund Contribution: DKK 1,350.
  • Industrial Injuries Insurance: Approximately DKK 5,000 (depending on the field).
  • Other Social Security Schemes: DKK 5,300.

Employee Taxes

Taxation in Denmark is high. The income tax structure for 2022 includes:

  • 12.14% bottom tax on personal income.
  • 15% top tax on higher earnings.
  • 24.954% municipal tax on taxable income.
  • 8% labor market tax.
  • 27% tax on share income up to DKK 55,300, and 42% above that.

Employees also contribute to ATP (Supplementary Pension): DKK 1,135.8 annually.

Notice Period

The notice period in Denmark depends on the length of employment:

  • 1 month for employment up to 6 months.
  • 3 months for employment between 6 months and 3 years.
  • 4 months for employment between 3 and 6 years.
  • 5 months for employment between 6 and 9 years.
  • 6 months for employment exceeding 9 years.

Termination and Severance Pay

Employees dismissed after 12 years of service are entitled to severance pay. The severance amount varies:

  • 1 month’s salary for employees over 40.
  • 2 months’ salary for those over 45.
  • 3 months’ salary for those over 50.
  • 5 months’ salary for those over 55.
  • 6 months’ salary for those over 60

Additionally, employees with over 17 years of service may receive an extra three months' salary as compensation.

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Frequently
Asked
Questions

What is International EOR and PEO?

International EOR (Employer of Record) and PEO (Professional Employer Organization) are services that enable businesses to compliantly hire, manage, and pay employees in foreign countries without the need for establishing a legal entity. EOR acts as the legal employer while PEO co-employs workers, handling administrative tasks such as payroll, taxes, and benefits.

Does Acvian handle time record submissions?

Acvian does not handle time record submissions directly. It is the client’s responsibility to track and submit employee work hours. However, Acvian can offer guidance and best practices to ensure efficient time tracking and compliance with local labor laws.

How can employees view their payroll details?

Employees can view their payroll details through the monthly payslips they receive and also via our Acvian platform. These payslips contain information on earnings, deductions, taxes, and net pay, giving employees a clear overview of their monthly payroll. Please note that in some countries, employers are restricted from viewing payslips due to data protection regulations, and only employees can share their payslips. For more details on these regulations, please contact our specialists.

How Acvian handles payroll disputes?

Acvian addresses payroll disputes promptly, working closely with both the client and the employee to investigate and resolve any issues.

Does Acvian require advanced monthly payments of salaries and service?

Yes, Acvian requires advanced monthly payments for salaries and service to ensure timely and accurate payroll processing.

Can Acvian provide consultations regarding a labor and tax legislation?

Yes, Acvian can provide consultations regarding labor and tax legislation. Our team of experts is well-versed in local regulations and can offer guidance to help your business maintain compliance, reduce risk, and navigate the complexities of international employment and taxation laws.

Which benefits does Acvian provide?

Acvian provides a diverse range of benefits, including but not limited to:

  • Health insurance
  • Car leasing
  • Gym allowance
  • Per diem compensation
  • Maternity leave

We can customize and offer many kinds of benefits requested by the client, ensuring that your employees receive the support and perks that align with your company culture and local regulations.

Can Acvian provide private health insurance?

Acvian can provide private health insurance options as part of its comprehensive employee benefits package.

What would the monthly/yearly costs for the employee be?

The monthly/yearly costs for an ‘average’ package vary depending on the specific plan and location. See our estimated price packages here. Acvian’s team can provide detailed cost breakdowns based on your requirements.

Can Acvian help with entity set up?

While Acvian doesn’t directly provide entity set-up services, we can introduce you to local lawyers who specialize in this area to assist you with your needs. See also, when it's better to set the entity or use the EOR.

Offboarding: how it is handled?

Offboarding is managed by Acvian in a structured and compliant manner. We coordinate with your business to ensure all necessary documentation, exit interviews, and final payments are completed. Acvian also ensures adherence to local labor laws and regulations, including providing any required notice periods and managing the termination process.

When does business need it?

Businesses typically need EOR and PEO services when they:

  • Expand into new international markets.
  • Hire remote employees in foreign countries.
  • Seek to streamline global workforce management.
  • Aim to ensure compliance with local labor laws and regulations.
  • Want to reduce the time and cost of establishing legal entities abroad.

Is Acvian compliant with GDPR?

Yes, Acvian is fully compliant with GDPR regulations. We collect and process personal data in accordance with the law, ensuring that data is used only for general, allowed purposes such as marketing and other legitimate business activities.

Where can Acvian supply EOR services?

Acvian can supply EOR services in over 180 countries, encompassing almost all European nations, the United States, and Canada, providing extensive coverage to support your business’s global expansion and workforce management needs. See our coverage here.

How does payroll work under EOR?

Under EOR, Acvian manages the payroll process by:

  • Acting as the legal employer of your foreign workforce.
  • Handling salary calculations, deductions, and disbursements.
  • Ensuring compliance with local tax and labor laws.
  • Managing payroll taxes, social contributions, and benefits.
  • Providing timely and accurate payroll processing for your employees.

Explore the details here.

Can you provide support for expatriate EOR workers?

Yes, Acvian provides comprehensive support for expatriate EOR workers, including:

  • Visa and work permit assistance.
  • Relocation and housing support.
  • Local registration and compliance.
  • Payroll and tax management.
  • Coordination of benefits and insurance coverage.

Explore in details here.

What are the details of expats support?

Expats support from Acvian encompasses a range of services designed to facilitate a smooth transition for employees working abroad. Key aspects include:

  • Assistance with visa and work permit applications, renewals, and compliance.
  • Support for relocation, including housing, schooling, and local registration.
  • Guidance on local tax regulations and filings.
  • Coordination of locally compliant benefits and insurance coverage.
  • Ongoing support for any changes or issues that may arise during the expatriate assignment.

What happens after onboarding?

After onboarding, Acvian maintains an ongoing relationship with your business and employees, ensuring smooth payroll processing, managing tax and regulatory compliance, handling benefits administration, and providing support for any changes or issues that may arise in the employment lifecycle. This allows you to focus on your core business operations while Acvian manages your international workforce.

How many days will it take for our personnel to be onboarded?

The onboarding process typically takes between 2 to 4 weeks, depending on the country and complexity of the employee’s situation. However, Acvian strives to expedite this process, ensuring a smooth and efficient transition for your personnel. See our story of the urgent employment project.

Does Acvian provide in-country support for employee inquiries or assistance requests?

Yes, Acvian provides in-country or regional support for employee inquiries and assistance requests. We have dedicated managers in the countries where we support your employees, ensuring prompt and knowledgeable assistance tailored to local regulations and practices.

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