Guide to employment, payroll and benefits in

Denmark

Rivermate offers complete payroll, benefits and compliance services for

Denmark

01. Overview

Last updated: 

August 19, 2021

Currency
Danish Krone
Capital
Copenhagen
Ease of doing business
85.3
Language
Danish
Population
5792202
GDP growth
2.24%

02. Grow your team in

Denmark

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Denmark

, particularly if you don't have established local relationships. You can hire employees in

Denmark

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Denmark is a Nordic country in Northern Europe, officially known as the Kingdom of Denmark. Denmark proper, the southernmost of the Scandinavian nations, is made up of a peninsula, Jutland, and a 443-island archipelago, the majority of which are Zealand, Funen, and the North Jutlandic Island. Flat, arable land and sandy coasts, low elevation, and a temperate climate characterize the islands. Denmark is located southwest of Sweden and south of Norway, with Germany to the south. Denmark is a constitutionally unitary state that includes Denmark itself as well as the two autonomous territories in the North Atlantic Ocean: the Faroe Islands and Greenland. Denmark has a total area of 42,943 km2 as of 2020, with a total area of 2,210,579 km2 when Greenland and the Faroe Islands are included. Denmark has a population of 5.84 million people. In the 8th century, the united kingdom of Denmark emerged as a capable seafaring country in the fight for dominance of the Baltic Sea. The Kalmar Union, which began in 1397 and ended with Swedish secession in 1523, united Denmark, Sweden, and Norway under a single sovereign ruler. Denmark–Norway was the name given to the territory of Denmark and Norway that was ruled by the same ruler until 1814. Several destructive wars with the Swedish Empire began in the 17th century, culminating in major cessions of land to Sweden. Norway was given to Sweden after the Napoleonic Wars, while Denmark retained the Faroe Islands, Greenland, and Iceland. There was a surge of nationalist movements in the nineteenth century, which were defeated in the First Schleswig War. Denmark lost the Duchy of Schleswig to Prussia during the Second Schleswig War in 1864. During World War I, Denmark remained neutral; however, in 1920, the northern half of Schleswig reverted to Danish control. A German invasion in April 1940 resulted in brief military skirmishes, while the Danish resistance movement operated from 1943 to the German surrender in May 1945. Denmark, an industrialised agricultural exporter in the second half of the nineteenth century, implemented social and labor-market reforms in the early twentieth century, laying the groundwork for the current welfare state model with a well-developed mixed economy. On June 5, 1849, the Danish Constitution was ratified, putting an end to the absolute monarchy that had existed since 1660. It creates a representative democracy within a constitutional monarchy. Copenhagen, the nation's capital, largest city, and main commercial center, houses the government and national parliament. Denmark wields hegemony over the Danish Realm, delegating authority to manage internal affairs. In the Faroe Islands, home rule was established in 1948; in Greenland, home rule was established in 1979, followed by more autonomy in 2009. Denmark joined the European Economic Community in 1973, albeit with certain exemptions, and it keeps its own currency, the krone.

04. Public holidays

05. Types of leave

Paid time off

Employees in Denmark have a "concurrent holiday" scheme, which means they can take their vacation while they receive the days per month. Per month, employees get 2.08 days of paid vacation, for a total of 25 days per year. Employees usually accrue a vacation pay of 12.5% of their wages.The holiday season begins on September 1 and lasts until August 31 the following year. Employees who want to take vacation days before they are paid will do so with the employer's permission.Employees who were unable to take vacation time due to Covid-19 will postpone it to the next year.

Public holidays

Denmark recognizes 10 public holidays.

Sick days

For the first 30 days, salaried workers are paid by their employers if sick. After that, employers are paid for up to 22 weeks of social security.Paid sick leave is not given to non-salaried workers. In the work contract, all sick care should be stated.

Maternity leave

Expectant mothers are entitled to a four-week maternity leave before giving birth and a fourteen-week maternity leave thereafter. Salaried workers are paid 50% of their normal pay at this period. Employees bound by a collective bargaining deal could be entitled to full compensation.

Paternity leave

New fathers are entitled to two weeks of paid leave, which must be taken within the first 14 weeks after the birth of their child.

Parental leave

Each parent has the right to take up to 32 weeks of maternity leave after the initial 14 weeks. This period will be continued by an additional 8 to 14 weeks, but the amount of parental allowance earned annually will be reduced. Each of the parents can opt to delay between 8 and 13 weeks of leave, which may be taken at any time before the child reaches the age of one year.

Other leave

Work-Related Injury Leave: Employers are covered for work-related injuries thanks to social security payments (ATP). In comparison, the majority of employers offer private workers' compensation plans. Workplace injuries can be identified within nine days of the first day off. For days off and benefits, see sick leave.

06. Employment termination

Termination process

To dismiss an employee, enough justification must be presented. Although not needed, a written notification is suggested to avoid any disputes.

Notice period

In Denmark, salaried employees are entitled to a notice period ranging from one to six months, depending on the length of service.

Severance pay

Although there is no universally applicable statutory law regarding severance pay, paid employees who have worked continuously for 12 to 17 years are entitled to a severance payment ranging from one to three months' pay. Certain collective bargaining agreements also include restrictions on severance pay based on seniority.

Probation period

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 collective bargaining agreements also include rules on severance pay that depend on seniority.

07. Working hours

General

The standard workweek is 37 hours per week, five days per week, as defined by collective bargaining agreements. Employees must be provided with at least one full day of rest per week, which is typically Sunday. The standard workweek is 48 hours, including overtime.

Overtime

Denmark does not have an overtime requirement or a general overtime regulation. Overtime rules should be spelled out in the collective bargaining agreement. Overtime pay is typically set at 150 percent of regular pay for the first three hours and 200 percent for additional hours, holidays, or Sunday work.

08. Minimum wage

General

In terms of compensation laws, Denmark employment law is relatively straightforward. There aren't many statutory compensation and benefits laws in the United States. Trade unions or collective bargaining agreements, on the other hand, outline these rules for specific employees.


Denmark has no mandatory minimum wage. However, the most common minimum wage is around 110DKK per hour.

09. Employee benefits

General

Employees who travel from home are entitled to a statutory stipend for the cost.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Denmark

to hire a team takes time, money, and effort. The labor law in

Denmark

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Denmark

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Denmark

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Denmark

via our Employer of Record / PEO solution.

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