Key Takeaways for Hiring in Denmark
- Denmark has no statutory minimum wage. Pay is governed by collective agreements
- Employers must pay a minimum of 1% of annual salary as holiday allowance (ferietillæg), with many offering up to 3%
- Employees get 100% salary during sick leave with no duration limit (after meeting eligibility requirements)
- Notice periods range from one month to six months based on length of service
Continent
Europe
Capital
Copenhagen
Currency
Danish Krone (DKK)
Language
Danish
Payroll Cycle
Monthly
Pay Date
Last working day of the month
VAT
25%
Denmark Employment Contract Overview
What Do You Need To Include In A Danish Employment Contract?
Make sure your contracts include all of these to comply with Danish labor law:
Employee Information
- Full name
- ID number
- Role / Job title
- Start date
- Contract duration
- Working hours
- Probation and notice conditions
- Termination provisions
- Compensation details
Payroll
Average employer cost
12.4%
| Category | Details |
|---|---|
| Salaried Employees | Monthly, usually paid on the last working day of the month |
| Avg employer tax | ~10%–12% of gross salary |
Tax Breakdown
Employee Contributions
| Category | Rate / Details |
|---|---|
| Income Tax | Progressive up to ~52% (includes state, municipal, and church tax) |
| Labor Market Contribution (AM-bidrag) | 8% (flat rate, deducted before income tax) |
VAT
| Category | Rate / Details |
|---|---|
| VAT | Standard rate of 25% on goods and services |
Employee Benefits and Mobility in Denmark
Employment of expats is supported in Denmark.
| Benefits | Provider | Funded Through | Notes |
|---|---|---|---|
| Pension / Social Security | Government | Payroll Contributions & Taxation | ATP (Labour Market Supplementary Pension): A mandatory pension scheme applies to those working over nine hours/week. Occupational (Supplementary) Pensions: In practice, most employees participate in occupational pension schemes, but these are mandated through collective bargaining agreements, not statutory law. Public (State) Pensions: Funded entirely by taxation, these include universal old-age pension paid after reaching retirement age and a supplementary pension based on residency history. |
| Other Statutory Benefits | Government & Employer | Payroll Contributions & Additional Cost | Occupational Accident Insurance Unemployment Insurance (A-kasse) Holiday Pay (Feriekonto) |
Leave And Holiday Entitlement In Denmark
Annual Leave
Employees are entitled to 25 days of annual leave each year, accruing 2.08 days of leave for every month of completed work. The statutory annual leave system follows a holiday year (ferieår) running from September 1 to August 31.
Public Holidays
Denmark observes 10 public holidays:
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January 1 – New Year’s Day
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Maundy Thursday
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Good Friday
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Easter Sunday
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Easter Monday
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Ascension Day
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Whitsun
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Whit Monday (Pentecost Monday)
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December 25 – Christmas Day
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December 26 – Boxing Day
Sick Leave
You pay 100% of salary (including bonuses) with no duration limit, if:
-
Days one to three: Usually unpaid (some employers may choose to pay).
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Employee has worked at least 240 hours in the past six months, and
-
At least 40 hours in five of the last six months
After 120 days of continuous illness, you may terminate with one-month notice. A medical certificate is required after 14 days of sick leave.
Maternity Leave
Maternity leave consists of 14 weeks, which includes up to four weeks before the expected due date. During this period, you typically pay 50% of the employee’s salary for up to five months, and this amount can later be reimbursed by the Danish Maternity Fund.
Employees are required to notify you at least three months before the expected birth date.
An additional 13 weeks of leave is granted to employees who have two or more live-born children in the same birth. This also applies to both parents in cases of adoption of twins or more, provided the children are under one year of age at the time of adoption.
Applications for maternity and paternity benefits must be submitted through Udbetaling Danmark, which manages disbursements from the maternity fund.
Paternity Leave
Biological fathers and employees who are legal, but not biological, parents of a child—regardless of gender—are entitled to two weeks of paternity leave, which can be taken consecutively or separately within 14 weeks following the birth. They’re also entitled to an additional 32 weeks of parental leave, which can be shared with the other parent.
Other Types of Leave
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Parental Leave: Single parents are entitled to 46 weeks of parental leave and may transfer a portion to a close family member, such as a sibling or grandparent. In LGBT+ families, parental leave may be shared with “social parents,” including a legal parent’s spouse, a cohabiting partner, or the spouse of a known donor.
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Parents of Twins Leave: Each parent of twins is granted an additional 13 weeks of parental leave following the birth or adoption of twins. This extra leave must be used within one year of the event.
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Adoption Leave: Adoptive parents are entitled to a total of 32 weeks of leave, which may be divided equally between them. When adopting a child from abroad, both parents are eligible for up to four weeks of paid leave before receiving the child. This pre-adoption leave can be extended by an additional four weeks if the reception is delayed for reasons beyond the adoptive parents’ control. After the child is received, the parents are entitled to 14 weeks of paid leave, which may be shared between them; however, only one parent may be on leave at a time during this period.
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Bereavement Leave: Parents who lose a child under the age of 18 are entitled to 26 weeks of paid bereavement leave.
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Compassionate Leave: Employees may take unpaid leave if their immediate presence is urgently required due to a serious illness or accident affecting a close relative.
Termination and Offboarding in Denmark
Terminating employment in Denmark requires written notice, clear documentation, and adherence to statutory notice periods based on tenure. Here’s how to handle each scenario compliantly.
| Type | Possible? |
|---|---|
| Termination for Cause (poor performance, misconduct, etc.) | Yes |
| Termination without Cause | Yes |
| Mutual Termination Agreement (MTA) | Yes |
| Redundancy | Not possible under the EOR setup |
Denmark Employee Resignation
Notice
Form
Notice of resignation must be given in writing to you by the employee. Oral notice isn’t considered legally valid.
Notice period
The statutory notice period for employees is typically one month, unless otherwise agreed in the employment contract or collective agreement.
Payment in lieu of notice or notice waiver
Payment in lieu of notice (paying the employee for the notice period without requiring work) isn’t common or explicitly regulated but may be agreed upon contractually or by mutual consent.
End-of-Service Benefits
Severance/Gratuity
No statutory severance pay is mandated under Danish law for employee resignation. Severance may apply if agreed in contract or collective agreements, but it’s not a legal requirement upon voluntary resignation.
Other Benefits
Employees are entitled to accrued but unused holiday pay and any other earned benefits as per contract or collective agreements.
Termination Documentation
You must provide a written confirmation of termination/resignation if requested by the employee.
Employer Termination With Cause in Denmark
Acceptable grounds
Termination with cause can only occur if the employee has committed a serious breach of contract or misconduct. Examples include gross negligence, theft, fraud, repeated breaches of company rules, or other significant violations.
The grounds must be well-documented and substantiated. You should consider if lesser disciplinary measures are appropriate before immediate dismissal. Termination must be justified and proportionate.
Notice
Form
Termination with cause must be communicated in writing to the employee, specifying the reasons for dismissal.
Notice period
Termination with cause typically allows for immediate dismissal without any notice period.
Payment in lieu of notice or notice waiver
Since notice can be immediate, payment in lieu of notice generally isn’t required.
End-of-Service Benefits
Severance
There’s no statutory severance pay required for termination with cause. Severance may be agreed upon in contracts or collective agreements but usually isn’t paid in cases of termination with cause.
Other Benefits
Employees are entitled to payment for accrued but unused holiday leave. Other earned benefits must be paid according to contract or collective agreements.
Termination Documentation
You must provide a written termination letter stating the reasons for dismissal.
Employer Termination Without Cause in Denmark
Acceptable Grounds
Termination without cause can be done for reasons such as business restructuring, redundancy, or other operational reasons. You don’t need to prove employee fault but must comply with notice periods and fair procedures. Terminations mustn’t be discriminatory or in violation of protected rights (e.g., pregnancy, union activity).
Form
Notice of termination must be given in writing to the employee.
Notice period
Statutory notice periods depend on the employee’s length of service:
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Up to six months of employment: one month notice
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Six months to three years: three months notice
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Three to six years: four months notice
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Six to nine years: five months notice
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Nine to 12 years: six months notice
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More than 12 years: six months notice
(Notice periods can be extended by contract or collective agreement.)
Payment in lieu of notice or notice waiver
You may agree to pay salary instead of requiring the employee to work the notice period, but this must be agreed upon.
End-of-Service Benefits
Severance
There’s no statutory severance pay for termination without cause in Denmark. Severance pay may be included in collective agreements or employment contracts.
Other Benefits
Employees are entitled to payment for accrued but unused holiday leave. Other contractual or collectively agreed benefits must also be paid.
Termination Documentation
You must provide a written termination letter stating the notice period and reason for termination if requested.
Mutual Termination Agreements in Denmark
Notice
Form
The agreement must be documented in writing, clearly stating the terms of termination.
Notice period
Notice periods can be negotiated between the parties and may differ from statutory notice periods if both agree.
Waiver of notice
The parties may agree on payment in lieu of notice or waive notice periods entirely as part of the agreement.
End-of-Service Benefits
Severance
Severance payments may be agreed upon in the mutual termination agreement but aren’t mandated by law. Any agreed severance should be clearly detailed in the agreement.
Other Benefits
Payment for accrued but unused holiday leave is mandatory. Other benefits may be included in the agreement if negotiated.
Termination Documentation
A written mutual termination agreement signed by both parties is essential to document the terms and avoid disputes. The agreement should include details such as final working day, payments, and any other agreed conditions.
Offboarding Process for the End of Fixed-term Contracts in Denmark
If the Fixed-Term Contract Ends Normally
Notice
Fixed-term contracts automatically expire on the agreed end date without the need for notice unless otherwise specified in the contract. If the contract is to be renewed or extended, parties should notify each other as agreed in the contract or collective agreements.
If the employee continues working after the fixed term without a new agreement, it may convert to an indefinite contract, requiring notice periods under normal rules.
End-of-Service Benefits
Severance/Gratuity
Danish law doesn’t mandate severance pay or gratuity for the normal expiration of a fixed-term contract. Any severance would depend on terms agreed in the contract or collective bargaining agreements (if applicable).
Other Benefits
The employee is entitled to all earned salary, unused vacation pay (vacation allowance), and any other contractual benefits. Danish holiday law requires that accrued vacation pay must be paid out if the contract ends. No additional compensation is generally due at the normal end of a fixed-term contract.
If the Employer Terminates Early
Notice
Early termination of a fixed-term contract by you is generally not allowed unless the contract explicitly allows it. If early termination is permitted, you must comply with the notice period specified in the contract or collective agreement.
If no early termination clause exists, ending the contract prematurely may be a breach of contract and could lead to claims for damages.
Notice periods for indefinite contracts under the Danish Salaried Employees Act (Funktionærloven) range from one to six months depending on length of employment, but these don’t automatically apply to fixed-term contracts unless the contract converts.
End-of-Service Benefits
Severance/Gratuity
No statutory severance is required under Danish law for early termination of fixed-term contracts. Severance pay may be due if stated in the contract or collective agreement, or in cases of unlawful dismissal.
Other Benefits
The employee is entitled to salary for the notice period (if applicable). The employee must be paid for all accrued and unused vacation allowance. If termination is unlawful, the employee may have the right to compensation or damages.
Final Payment Timing & Immigration and Visa Compliance in Denmark
Final Payment Deadline
Salary and accrued benefits (e.g., unused vacation pay) must be paid no later than the next regular payday after termination.
Penalty
Failure to pay final salary on time may result in interest penalties and potential legal claims by the employee.
Visa and Immigration Compliance
Employees with work or residence permits must comply with Danish immigration rules upon resignation or termination. You must notify the Danish Immigration Service if the employee loses their job, which may affect the employee’s right to remain in Denmark. Employees are responsible for applying for new permits or extensions if applicable.
Supporting Guides
Frequently Asked Questions
Is there a minimum wage in Denmark?
No. Denmark doesn’t have a statutory minimum wage. Pay is governed by collective agreements (overenskomster) negotiated between unions and employer organizations. These agreements set sector-specific minimum wages and conditions.
How much holiday allowance must I pay?
At minimum, 1% of the employee’s annual salary as ferietillæg (holiday allowance). This is often paid annually in April/May or proportionally when employees take vacation days. Many collective agreements or employers offer up to 3% or more.
How long do employees get full sick pay?
Indefinitely, with no duration cap. Employees get 100% of salary (including bonuses) if they’ve worked at least 240 hours in the past six months and at least 40 hours in five of the last six months. After 120 days of continuous illness, you may terminate with one-month notice.
Can I terminate a fixed-term contract early?
Generally no, unless the contract explicitly allows it. If no early termination clause exists, ending the contract prematurely may be a breach of contract and could lead to claims for damages.
What’s the holiday year (ferieår)?
The statutory annual leave system follows a holiday year running from September 1 to August 31. Employees accrue 2.08 days of leave for every month of completed work.
How much notice is required for termination?
For employees: typically one month (unless otherwise agreed). For employers: depends on employee’s length of service, ranging from one month (under six months service) to six months (nine+ years service).
Do I need to reimburse maternity pay?
During maternity leave, you typically pay 50% of the employee’s salary for up to five months, and this amount can later be reimbursed by the Danish Maternity Fund. Applications must be submitted through Udbetaling Danmark.
