Employer of Record Denmark
Hire staff and expand your business in Denmark with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in Denmark designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in Denmark. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
Employer of Record in Denmark
A Brief Guide to Denmark
Denmark is a Nordic country located in Northern Europe. It is known for its high standard of living, well-developed welfare system, and strong emphasis on sustainability and renewable energy. Denmark has a constitutional monarchy with a parliamentary system of government and is a member of the European Union, the United Nations, and other international organizations.
|Area||43094 square kilometers|
|Population||Approximately 5.8 million|
|Currency||Danish Krone (DKK)|
|Major Cities||Cities Aarhus, Odense, Aalborg, Esbjerg|
|GDP||-2020 $355.3 billion USD|
|Human Development Index (HDI)||0.94 (very high)|
|Major Industries||Manufacturing, services, renewable energy, and agriculture|
Business Culture in Denmark
Danish business culture is characterized by a flat hierarchy, open communication, and a collaborative approach. Danes value equality, work-life balance, and consensus-based decision-making. Meetings are usually informal, and everyone is expected to contribute their opinions and ideas. Punctuality and preparedness are highly regarded, and business attire is typically casual yet professional. Building trust and long-term relationships are essential in Danish business culture, and networking and socializing play a significant role in business interactions.
Danes appreciate directness and honesty, and it’s important to provide well-reasoned arguments and facts in discussions. Overall, success in Danish business culture requires a collaborative and egalitarian mindset, adaptability, and a focus on building strong relationships.
Payroll and Taxes
Payroll and Taxes in Denmark
Standard practice in Denmark is to have 12 pay months in a year. Employees are entitled to receive holiday pay, which is typically 12.5% of their annual salary and is paid out in May and/or June. Employees are also entitled to a mandatory pension scheme called ATP, to which both employees and employers contribute.
Income taxes are progressive, meaning that higher income levels are subject to higher tax rates. The rate of employee taxation depends on various factors, including the employee’s income level, marital status, and number of dependents:
|Gross Annual Income||Tax Rate (%)|
|Up to DKK 50,761||8%|
|Up to DKK 544,800||42.83%|
|Over DKK 544,800||56.5%|
In addition to income tax, employers in Denmark are also responsible for various employer costs, which may include:
|Employer Costs in Denmark||Approx % of Gross Salary|
|Social Security Contributions||2%|
|Labor Market Contributions||8%|
|Health Insurance Contributions||0.67%|
Arbejdsmarkedets Tillægspension (ATP)
Employment Law in Denmark
Employment Contracts: In Denmark, employment contracts can be either written or verbal, but it is common practice to have written contracts that specify important details such as the duration of the employment, working hours, salary, and notice period for termination.
Working Hours: The standard maximum working time in Denmark is 37 hours per week or 7.4 hours per day. Overtime work is generally subject to an agreement between the employer and employee, and there are specific regulations for night work, Sunday work, and public holiday work.
Leave: Employees in Denmark are entitled to various types of leave, including paid annual leave (minimum of 25 working days per year), maternity leave, paternity leave, sick leave, and family care leave.
Termination: Termination of employment in Denmark is subject to notice periods that vary depending on the length of employment. Unjustified termination can result in claims for damages or compensation.
Employees Rights: Employees in Denmark have various rights, such as the right to equal treatment, protection against discrimination, and freedom of association. There are also regulations related to working conditions, workplace safety, and employee representation.
Collective Bargaining Agreements:
Collective bargaining agreements are commonly used in Denmark and cover many aspects of employment, including wages, working hours, and other employment conditions. These agreements are negotiated between employers’ organizations and trade unions.
Pension and Healthcare
A mandatory employer-funded pension scheme called ATP (Arbejdsmarkedets Tillægspension) exists in Denmark. This requires employers to contribute to their employees’ retirement savings. In addition, employees in Denmark can also participate in voluntary pension schemes offered by employers or set up their own private pension plans.
Healthcare in Denmark
A universal healthcare system exists in Denmark, which means that all residents are entitled to healthcare services regardless of their income or employment status. The healthcare system is funded through a combination of taxes and social health insurance contributions from employees and employers.
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Denmark Employer of Record Benefits
When you choose Agility EOR to expand in Denmark, we guarantee an Employer of Record Service tailored to the needs of your business