Indefinite (permanent) contracts are the default, governed by the Salaried Employees Act (Funktionærloven), collective agreements and the individual contract, with written terms mandatory.
Permitted under the Act on Fixed-Term Employment, but successive renewals require objective grounds (project work, temporary replacement); otherwise the contract may be deemed indefinite.
The standard week set by collective agreements is 37 hours; average weekly time may not exceed 48 hours over 4 months, and since 1 July 2024 employers must run an objective daily working-time registration system.
Salaried employees may agree a probation period of up to 3 months, during which the employer can terminate with 14 days' notice (expiring within the probation period).
No statutory 13th or 14th salary; employees instead receive a 1% holiday supplement (ferietíllæg) under the Holiday Act, and any bonus schemes are contractual or agreement-based.
Job titles generally unregulated, but professions like doctors, lawyers and authorised auditors require Danish authorisation, and funktionær status attaching to salaried roles carries specific legal protections.
Danish employer costs are fixed DKK amounts, not percentages: ATP pension (DKK 2,376/yr employer share) plus Samlet Betaling items — AUB (DKK 2,821/yr in 2026), AES (industry-rated), barsel.dk (DKK 550/quarter ≈ 2,200/yr), FIB, AFU — totalling roughly DKK 8,000-11,000/yr per full-time employee incl. injury insurance; occupational pension of typically 8-12% applies where a collective agreement covers the role.
Employees pay an 8% labour market contribution (AM-bidrag) on all earned income plus the employee ATP share (DKK 1,188/yr full-time); income tax (state + municipal, avg ~25% municipal) gives combined effective rates of roughly 37-52%, capped by the tax ceiling.
In addition to statutory leave, employees are entitled to the following statutory benefits:
Denmark's welfare system is primarily tax-funded, so social security contributions are small fixed DKK amounts rather than percentages of salary:
Total mandatory employer contributions typically amount to roughly DKK 8,000-11,000 per year per full-time employee including industrial injury insurance; occupational pension (typically 8-12% of salary) applies where required by collective agreement.
Employers must take out industrial injury insurance (arbejdsskadeforsikring) with a private insurer to cover workplace accidents, and must contribute to AES (occupational disease scheme), billed as an industry-rated fixed amount via Samlet Betaling. Together these cover medical costs, loss of earning capacity and permanent injury compensation under the Workers' Compensation Act.
There is no general statutory severance pay in Denmark. Under section 2a of the Salaried Employees Act (Funktionærloven), employer-terminated salaried employees receive a severance allowance of 1 month's salary after 12 years of continuous service and 3 months' salary after 17 years. Collective agreements may provide additional severance for long-serving hourly workers, and unfairly dismissed employees may receive separate compensation.
A 13th-month salary is not required or customary in Denmark. Instead, the Holiday Act entitles employees to a 1% holiday supplement (ferietíllæg) on top of salary during holiday, typically paid in one or two instalments (May and August), and many collective agreements add a further supplement or fritvalg (free-choice) account of a few percent of pay.
P.S. our team speaks multiple languages and we'd love to chat in your preferred language if requested.
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. RemoFirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
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.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
