Denmark has been rated one of the easiest places to do business in Europe and is a very competitive economy, offering companies a range of opportunities to grow and expand. Before you get started, there are many payroll, HR, and compliance requirements to consider.
Payroll and Tax Considerations
- There is no national minimum wage in Denmark. Minimum wages are regulated by collective bargaining agreements in some industries and more than 65% of workers in Denmark are members of different unions
- There are no statutory requirements for overtime pay
- Denmark labor law states that a notice of termination must be given before terminating a salaried employee
- Severance pay is granted if the employee has been continuously working for the same company for at least 12 years
- Taxes are paid on the national and municipal levels, and there are additional taxes for church affiliation
- A married man is taxed on the income of his wife and children
- There are a variety of taxes and rates based on income
- Employers are required to provide a written contract containing all contract terms to employees working for at least a month and more than 8 hours per week
- Employees cannot exceed 48 hours per week on average over a period of 4 months including overtime
HR and Statutory Requirements
- Employees are entitled to 5 weeks of paid leave per year. Leave is earned continuously from September 1 – August 31 and 2.08 days of paid leave is earned for each month of employment
- Employees qualify for sick benefits if they have been employed for at least 240 hours in the past 6 months and for at least 40 hours in 5 of those months
- The employer pays sick leave to employees for the first 30 days of illness, and then the municipality will pay the employee sickness benefits
- Denmark provides pregnant employees 4 weeks of maternity leave prior to birth and 14 weeks of maternity leave after delivery. After the first 14 weeks of maternity leave, each parent has the right to parental leave up to 32 weeks
- Employees are entitled to 2 consecutive weeks of paternity leave within 14 weeks after the birth of the child. Both parents are entitled to receive the statutory maternity leave pay throughout the leave period unless stated otherwise in the employment contract
- To receive full pension benefits, a person must have lived in Denmark for at least 40 years. There is a basic and a supplemental pension plan
Holidays in Denmark
- January 1 – New Year’s Day
- April 14 – Maundy Thursday
- April 15 – Good Friday
- April 17 – Easter Sunday
- April 18 – Easter Monday
- May 1 – Labor Day / May Day
- May 13 – Great Prayer Day
- May 26 – Ascension Day
- June 5 – Whit Sunday
- June 5 – Constitution Day
- June 6 – Whit Monday
- December 25 – Christmas Day
- December 26 – Second Christmas Day
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