Denmark is a Nordic country bordered by Germany. It is considered one of the most economically and socially developed countries in the world with a great quality of life. Denmark ranks highly in terms of social mobility, with a high level of income equality, the low corruption, and one of the world's highest per capita incomes.
As of mid-2022, maternity/paternity leave in Denmark has been extended to 48 weeks, at 24 weeks of leave for each parent. Some of this leave can be transferred between the parents. Maternity/paternity benefits are calculated according to the hourly wage (excluding Labour Market Contribution) and how many hours of leave are taken per week. In 2023, the maximum is DKK 122.97 per hour before tax for maternity benefits.
An employee is entitled to full pay when they are sick in Denmark, no matter their tenure or length of the illness. If the employee is sick for more than 30 days, the employer needs to apply for sick pay no later than 5 weeks after the first sick day.
Denmark has 11 public holidays, and full-time employees have a right to 25 days of paid time off each year, accrued monthly at 2.08 days per month. Employees can also be eligible for adoption leave, parental leave, bereavement, or care leave.
While there is no legal minimum wage in Denmark, collective bargaining agreements negotiate minimum wages. The average hourly minimum salary across all sectors is around DKK 110 per hour. A standard workweek in Denmark is 37 hours.
Termination of an employee in Denmark has to come with written notice and proof that the notice was received. Employees who have been employed at least 1 year are protected against termination without cause which includes: reduction of staff, misconduct, unfitness for the job, or contract breach.
The notice period for a termination depends on the length of employment:
There are no laws on severance pay in Denmark. Nevertheless, employees continuously employed for 12 years or more are entitled to severance pay equivalent to 1 month’s salary. Employees continuously employed for 17 years or more are entitled to severance pay equivalent to three months’ salary.
While it’s not a legal requirement to pay a 13th-month salary in Denmark, most employers are known to offer annual bonuses.
★ DKK 2,791 - Employer's Reimbursement System
★ DKK 2,272- Pension Scheme
★ DKK 1,176 - Occupational Injuries Insurance
★ DKK 1,150 - Maternity Leave Fund
★ DKK 592 - Unemployment
★ DKK 299 - Labour Market Insurance
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Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.