Denmark Employment Law & Compliance Guide for Employers
Key employment laws in Denmark: what employers need to know
Danish employment law is spread across separate acts rather than one labour code: the Funktionærloven [Salaried Employees Act], the Holiday Act, the Employment Certificates Act and the Working Time Act, topped up by sector collective agreements. Foreign employers are most often surprised that Denmark has no statutory minimum wage or overtime premium, and that pay floors, pensions and extra leave usually come from collective agreements. This page summarises the core employer rules, with official sources for each fact.
Denmark employment rules at a glance
| Topic | What the rule is | Official source |
|---|---|---|
| Minimum wage | No statutory minimum wage. Pay floors are set by sector overenskomster [collective agreements] or agreed individually. Employers, including foreign ones, are not legally required to sign a collective agreement. | Lifeindenmark.dk (Danish Agency for Digital Government) – Pay |
| Standard working hours | No statutory standard week; 37 hours is the norm under most agreements. Maximum 48 hours a week on average including overtime, at least 11 hours' daily rest and one 24-hour rest period a week. | Lifeindenmark.dk – Working hours |
| Overtime pay | No statutory overtime premium. Overtime pay or time off in lieu is set by the collective agreement or employment contract. Overtime counts towards the 48-hour average limit. | Lifeindenmark.dk – Working hours |
| Paid annual leave | 25 days (5 weeks) a year, earned at 2.08 days per month and used from 1 September to 31 December of the following year. Salaried staff keep pay plus a 1% holiday supplement; others receive 12.5% holiday pay. | Lifeindenmark.dk – Holiday allowance |
| Public holidays | 10 public holidays (e.g. Easter, Ascension Day, Whit Monday, Christmas); Great Prayer Day was abolished from 2024. No statute gives paid time off on them; this follows the collective agreement or contract. | WageIndicator Foundation – Annual leave and public holidays (professional source) |
| Sick leave | Salaried employees keep full pay. Others get sickness benefit from the employer for the first 30 days (if they worked 74 hours in the prior 8 weeks); the municipality then pays, capped at DKK 5,085 a week (2026). | Lifeindenmark.dk – Sickness benefits for a salary earner |
| Maternity and parental leave | Mother: 4 weeks before birth. After birth each parent has 24 weeks with benefit (11 earmarked, 13 transferable), including 2 compulsory weeks for the mother. State benefit is capped at DKK 5,085 a week (2026). | Lifeindenmark.dk – Maternity/paternity benefits |
| Probation period | For salaried employees, an agreed probation of up to 3 months allows the employer to dismiss on 14 days' notice; the employee may leave without notice. Collective agreements set probation for other staff. | Lifeindenmark.dk – Resignation and termination |
| Notice period | Salaried employees: employer notice 1 month in the first 6 months, then 3 months, rising by 1 month per 3 years' service to a maximum of 6 months. Employee notice: 1 month. Others follow the agreement or contract. | Lifeindenmark.dk – Resignation and termination |
| Severance pay | Salaried employees dismissed after 12 or 17 years' continuous service get 1 or 3 months' pay. Unfair dismissal of salaried staff with 1+ year's service can cost up to 6 months' pay. No general severance otherwise. | Funktionærloven §§ 2a–2b (Retsinformation) |
| Employer social contributions | Low and mostly fixed amounts, not a % of pay, so no cap applies. 2026: ATP DKK 198 a month; AUB DKK 705.25, Barsel.dk DKK 550 and FIB DKK 82 per full-time employee a quarter; plus industry-rated AES work-injury cover. | Virk.dk – Samlet Betaling rates |
| Employee social contributions | 8% labour market contribution (AM-bidrag) on gross pay, deducted before income tax, plus ATP of DKK 99 a month for full-time staff (2026). No cap. Pension shares under collective agreements are extra. | PwC Worldwide Tax Summaries – Denmark (professional source) |
| Income tax on salaries | Employer withholds A-tax monthly via eIndkomst using the tax card. 2026: municipal tax about 25%, bottom tax 12.01%, middle tax 7.5% above DKK 641,200, top tax 7.5% above DKK 777,900, top-top tax 5% above DKK 2,592,700 (after AM-bidrag). | Skat.dk – Bundskat, mellemskat, topskat og toptopskat |
| Mandatory bonuses and 13th-month pay | None required by law; there is no 13th-month salary. Salaried staff receive the statutory 1% holiday supplement (ferietillæg), paid with May and August pay or when holiday starts. Other bonuses depend on contract or agreement. | Lifeindenmark.dk – Holiday allowance |
| Work permits for foreign nationals | EU/EEA, Nordic and Swiss citizens need no permit. Others usually apply to SIRI, e.g. under the Pay Limit Scheme (salary ≥ DKK 552,000 a year, 2026). Employer and employee file jointly; normal processing time is 1 month. | Nyidanmark.dk (SIRI) – Pay Limit Scheme |
| Employment contract requirements | Written terms required for staff working over 3 hours a week on average: key terms within 7 calendar days of starting, the rest within 1 month. No language rule or registration; a version the employee understands is advisable. | Act on Employment Certificates, Act no. 501/2023 (Retsinformation) |
Employer obligations in Denmark, topic by topic
Filter by primary service relevance
Does a Danish employment contract have to be in writing, and what must it include?
How many hours can employees work in Denmark, and must you record them?
Is there a minimum wage in Denmark, and how should salaries be paid?
How much paid holiday, sick leave and parental leave must a Danish employer give?
What payroll taxes and social contributions does a Danish employer pay?
How much notice and severance do you owe when dismissing an employee in Denmark?
Which permit does a non-EU employee need to work in Denmark?
Can you engage freelancers in Denmark instead of hiring employees?
Do you have to join a collective agreement in Denmark?
Key employment laws in Denmark and official sources
- Salaried Employees Act (Funktionærloven), LBK no. 1002/2017 — Sets minimum notice, probation, sick pay, maternity pay, severance and unfair dismissal compensation for salaried employees.
- Holiday Act (Ferieloven), LBK no. 152/2024 — Gives employees 25 days’ paid holiday a year and governs holiday pay, the 1% supplement and FerieKonto.
- Act on Employment Certificates and Certain Working Conditions, Act no. 501/2023 — Requires written employment terms within 7 days or 1 month for staff working over 3 hours a week and sets certain minimum working conditions.
- Act implementing parts of the Working Time Directive, LBK no. 982/2024 — Caps average weekly working time at 48 hours and requires employers to record daily working time.
- Sickness Benefit Act (Sygedagpengeloven), LBK no. 1221/2025 — Sets the 30-day employer period for sickness benefit and the rules for municipal reimbursement.
- Maternity Leave Act (Barselsloven) — Governs pregnancy, maternity, paternity and parental leave and the related state benefits.
- Aliens Act (Udlændingeloven) – work permit schemes — Sets the Pay Limit, Positive List and Fast-track schemes for non-EU workers, administered by SIRI.
- Personal Tax Act and Withholding Tax Act (Personskatteloven, Kildeskatteloven) — Set income tax brackets and the employer’s duty to withhold A-tax and AM-bidrag from salaries.
FAQs: hiring employees in Denmark
Can a foreign company hire employees in Denmark without a local entity?
Yes. A foreign company can employ staff in Denmark without a subsidiary, but it must register with the Danish Business Authority and tax authorities to report payroll, withhold A-tax and AM-bidrag and pay ATP and other contributions. Work permit schemes for non-EU hires generally expect a Danish-registered employer. Many companies use an Employer of Record, which employs the worker locally and handles contracts, payroll and permits on their behalf.
How much does an employee cost in Denmark on top of gross salary?
Statutory employer costs are low. In 2026 they are mostly fixed amounts per full-time employee: ATP of DKK 198 a month, plus AUB (DKK 705.25), Barsel.dk (DKK 550) and FIB (DKK 82) each quarter, and industry-rated work-injury cover. The main extra cost is usually pension under a collective agreement or contract, plus holiday pay rules. Employees pay the 8% labour market contribution and income tax themselves through payroll.
What is the minimum wage in Denmark in 2026?
Denmark has no statutory minimum wage in 2026. Pay floors are set by sector collective agreements between unions and employers’ organisations, or agreed individually. Employers are not legally required to join an agreement, but agreement rates are the market benchmark in many sectors. For non-EU hires, the Pay Limit Scheme sets an effective floor of DKK 552,000 a year for that permit route.
How much notice and severance does an employer owe when dismissing an employee in Denmark?
For salaried employees, employer notice is 1 month in the first 6 months, then 3 months, rising by 1 month for every 3 years of service to a maximum of 6 months. Statutory severance of 1 or 3 months’ pay applies after 12 or 17 years’ service. An unjustified dismissal after 1 year can cost up to 6 months’ pay in compensation. Other staff follow their collective agreement or contract.
Can a company hire a foreign national in Denmark, and what permit is needed?
Yes. EU/EEA, Nordic and Swiss citizens can work without a permit. Most other nationals need a residence and work permit from SIRI. The most used route is the Pay Limit Scheme, which in 2026 requires a salary of at least DKK 552,000 a year and normally takes about 1 month. Other routes include the Supplementary Pay Limit Scheme, the Positive Lists and the Fast-track Scheme for certified employers.
Is it risky to engage contractors instead of employees in Denmark?
It can be. Status depends on how the work is done: instructions, supervision, financial risk and whether the person runs a real business. If a contractor is treated as an employee in practice, the company can owe A-tax, AM-bidrag, ATP, 12.5% holiday pay and Salaried Employees Act rights such as notice and severance. Long-term, full-time engagements with one client carry the highest risk.
Related NNRoad resources for Denmark: Employer of Record in Denmark · Payroll in Denmark · Hiring foreign employees in Denmark · Contractors and on-demand talent in Denmark · Denmark employer cost calculator
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Regulation Updates in Denmark
Discover the latest employment and compliance updates in Denmark — helping you stay ahead in a changing regulatory landscape.
Pay Limit Scheme
What it is: The Pay Limit Scheme policy update clarifies which salary components and documentation count toward the pay-limit and reiterates employer responsibilities in relation to payment into a Danish bank account and the use of employer application forms for sponsoring work permits.
What it changes: The update specifies which salary components and required documentation count toward the pay-limit and restates employer responsibilities, including payment into a Danish bank account and use of employer application forms.
Who is affected:
- Employers involved in sponsoring work permits
What employers should do:
- Ensure understanding of which salary components and documentation count toward the pay-limit
- Comply with requirements for payment into a Danish bank account
- Use the employer application forms as required
Notes: Effective month: 2026-04.
Sep 2025: Denmark’s Youth Employment Regulations 2025 – Support for Youth and Employers
Beginning July 2025, Denmark introduces new regulations to make it easier for youth aged 15–17 who have finished compulsory education to participate in part-time and summer employment, supporting both young workers and seasonal employers.
Update first published on NNRoad in Sep 2025. The current rules are summarised in the sections above.
Sep 2025: Amendment to the Parental Leave Act – Expanded Benefits During Bereavement Leave
Beginning July 1, 2025, Denmark has amended the Parental Leave Act to provide increased support for parents who experience the loss of a child. The reform expands eligibility for parental benefits (dagpenge) during bereavement leave by disregarding previous periods of compensation for lost earnings, making it easier for affected parents to access paid leave and financial support during difficult times. Employers, HR professionals, and benefit administrators should prepare for these…
Update first published on NNRoad in Sep 2025. The current rules are summarised in the sections above.
Jul 2025: Denmark Expands Work-for-Benefits Policy
Effective July 1, 2025, Denmark will require around 22,000 cash‑assistance recipients lacking sufficient residency or employment history to perform up to 37 hours per week of “work obligation” activities in exchange for benefits.
Update first published on NNRoad in Jul 2025. The current rules are summarised in the sections above.