Payroll and Benefits Guide Denmark
Last updated: Mar 03, 2026
Contribution
|
Employer Payroll Contributions
|
Annual Rate (estimated) |
|
2,376 DKK
|
Pension (ATP)
|
|
5,300 DKK
|
Other Social Security
|
|
Up to 5,000 DKK
|
Industrial Injuries Insurance (varies significantly per industry)
|
|
1,500 DKK
|
Maternity Leave Fund
|
|
1.0%
|
Holiday Pay, accrued each month and paid out to the worker for the period 1 September to 31 May and for the period 1 June to 31 August is paid in August.
|
| 14,176 DKK +1% |
Total Employment Cost
|
|
Employee Payroll Contributions
|
Annual Rate |
| 1,188 DKK |
Pension (ATP)
|
|
Employee Income Tax
|
Annual |
|
National/State Tax
|
|
|
12.01%
|
Bottom Tax
|
|
15.00%
|
Top Tax
Applied as 15% of the part of the top tax base exceeding DKK 611,800 after a deduction of 8% Labour Market Tax. |
|
8.00%
|
Labor Market Tax, applied on personal income.
|
|
25.068%
|
Local Municipal Tax (country average)
|
|
27.00%/42.00%
|
Share Tax
Share income up to DKK 67,500 (DKK 135,000 for a married couple) is taxed at 27%. Share income in excess of this amount is taxed at 42%.
|
|
0.64%
|
Church Tax (country average).
Church tax is imposed by municipalities and is only charged for members of the Danish State Church (Lutheran). When registering in Denmark, all individuals should explicitly state if they should not be comprised.
|
Employer taxes
Employee taxes
Minimum Wage
General
The minimum wage is decided through the Collective Bargaining Agreements of each sector. The average minimum wage across different sectors covered by CBAs is approximately DKK 110 per hour and circa DKK 17,000 per month.
For foreign nationals working in Denmark, the Government has set a minimum salary under the pay-limit scheme at 514,000 DKK per year.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
The payroll cycle in Denmark is generally monthly and employers must make payments on the same day of each month before the end of the month.
13th Salary
There is no legal requirement to pay a 13th-month salary payment, however, it is common for employers to offer bonuses.
Authority Payments
|
Authority Payment |
Paid To |
Due Date |
Method |
|
Payroll tax withholding |
A-Tax |
10/12 of the following month |
Wire |
|
Employer Contribution |
AM bidrag |
10/12 of the following month |
Wire |
Working Hours
General
A general working week for a Danish employee is five days, working on average 37 hours per week. According to the Working Time Directive Act, the maximum working time is 48 hours per week, calculated as an average over four months.
Overtime
The maximum limits are derived from the Danish Working Time Act, which implements the EU Working Time Directive. These rules apply to almost all employees, including those without a CBA.
- Standard Ordinary Hours: There is no statutory rule on standard hours. However, the vast majority of CBAs stipulate a standard work week of 37 hours. Overtime is any work beyond the contractual standard (usually 37 hours).
- Absolute Maximum Weekly Hours: Total working time, including overtime, must not exceed an average of 48 hours per week (calculated over a reference period of four consecutive months).
- Rest Periods: Employees must have a minimum of 11 consecutive hours of rest in any 24-hour period, and at least one full rest day (24 hours) per week.
- Time Registration: Since July 1, 2024, employers are legally obligated to implement an objective, reliable, and accessible system to register employees’ daily working hours to ensure compliance with the 48-hour limit.
- Opt-Out: Opting out of the 48-hour limit is possible only if agreed upon through an individual agreement, provided the relevant social partners have agreed to allow it within that sector’s CBA.
Overtime Compensation (Contractual/CBA)
The compensation for overtime is not set by the Danish Working Time Act but by agreement.
| Compensation Detail | Statutory Requirement (Danish Working Time Act) | Common CBA Structure (Non-Statutory) |
| Minimum Pay Rate | No statutory minimum premium is set for standard overtime. | Most CBAs mandate 50% premium for the first 3 overtime hours, and 100% premium thereafter. |
| Source of Rates | Determined entirely by the Collective Bargaining Agreement (CBA) or the Individual Employment Contract. | CBA provisions often set the minimum rate. |
| Compensation Method | Compensation can be paid as a monetary premium OR as equivalent time off in lieu (afspadsering), as agreed upon. | CBAs usually specify the compensation method. |
| Salaried/Management: | Overtime pay is often included in the fixed salary for managers, executives, and other “trusted employees” (those with functional salaries). |
Premiums for Sundays and Holidays
- Public Holidays: If an employee is required to work on a public holiday, CBAs typically entitle them to a pay bonus of 100% of their average salary for the hours worked (Total 200%).
- Sunday Work: Compensation for Sunday work is determined by the specific CBA but commonly ranges from 50% to 100% premium on the daily pay.
Leave
Annual Leave (vacation)
In Denmark, the standard paid leave entitlement for full-time employees is 25 working days per year, accrued at the rate of 2.08 days of paid leave for each month of service. It is common to give 5 additional days’ leave as an added benefit. Holidays are divided into 3 weeks consisting of the main holiday plus an additional 2 called residual holidays.
The Danish Holiday Act operates with two different systems for pay during holidays. An employee is either entitled to pay during the holiday i.e. payment of the usual salary and a holiday supplement of 1%, or, a holiday allowance consisting of 12.5% of the employee’s salary or wages (for blue-collar workers). The holiday allowance must be deposited with FerieKonto (administrator of the holiday allowance) so that the money is available to be paid out to the employee.
The paid leave entitlement is accumulated from 1 September through to 31 August. However, the period for taking leave is extended by four months giving a use period of 16 months in total e.g. leave earnt between 1 September 2024 to 31 August 2025 may be taken up to and including 31 December 2025, though this is still subject to approval from the employer.
PTO carryover
- For Papaya Direct:
- Employees earn 25 vacation days (5 weeks) per year.
- Vacation year runs 1 Sept – 31 Aug; days must normally be used by 31 Dec of the following year.
- 20 days (4 weeks) = protected vacation → must be taken, generally cannot be carried over.
- 5th week (5 days) → can be carried over only with a written agreement with employer made before year-end.
- Carryover is not automatic and requires mutual agreement.
- Unused vacation not taken or carried over may expire or be paid out per legal rules.
- Unused vacation is paid out when employment ends.
- For People 2.0, 5 days can be carried over every year with no deadline to be used.
Public Holidays
Public holidays that fall on the weekend are usually lost.
| Date | Day | Holiday | Notes |
| 1 Jan 2025 | Wednesday | New Year’s Day | |
| 17 Apr 2025 | Thursday | Maundy Thursday | |
| 18 Apr 2025 | Friday | Good Friday | |
| 21 Apr 2025 | Monday | Easter Monday | |
| 29 May 2025 | Thursday | Ascension Day | |
| 9 Jun 2025 | Monday | Whit Monday | |
| 25 Dec 2025 | Thursday | Christmas Day | |
| 26 Dec 2025 | Friday | 2nd Day of Christmas |
Sick Days
The Salaried Employees Act and most Collective Agreements outline that workers are generally entitled to receive their usual remuneration during sickness.
- The first 30 calendar days are paid by the employer. Further leave is paid by the authorities at an amount capped at DKK 4,865 per week (usually the employer will continue to pay the full compensation and then claim a refund from the authorities for the amount corresponding to the sickness benefit rates from the local municipality).
- As a general rule, employees will receive sickness benefits for a maximum of 22 weeks in a nine-month period.
- To be eligible for sickness benefits, workers must have been employed continuously for the eight weeks prior to sickness absence and during that time worked for a total of at least 74 hours.
- Employers must notify the municipality of their employee’s absence due to illness within the specified time period.
Maternity Leave
Mothers are entitled to take maternity leave of 4 weeks before the expected date of birth and a further 24 weeks leave after the birth, broken down as:
- 2 weeks of mandatory leave immediately after childbirth.
- 8 further weeks of leave to be taken within 10 weeks of the birth.
- 14 further weeks of leave to be used before the child turns one years old. Under certain circumstances, some of this leave may be postponed, to be used up to the time the child reaches nine years old.
- An additional 13 weeks of leave can be entitled in the case of multiple births such as twins. This also applies when adopting twins or multiple children providing they are under the age of 1 years old at the time of adoption.
Full-time employees who are on full leave, are employed for 37 hours a week and get more than DKK 21,092 as monthly pay will be eligible to receive payment from the authorities of up to DKK 4,865 per week/DKK 131.49 per hour before tax. Workers who earn below this hourly wage will continue to receive their usual salary rate during leave.
To qualify for maternity leave employees must have worked a minimum of 160 hours within the last four months prior to the birth and at least 40 hours per month in at least three of those months.
Paternity Leave
Fathers or co-parents are entitled to 2 weeks of compulsory leave immediately after the birth. Following this, an additional 22 weeks of leave can be taken at any time before the child turns one years old. Under certain circumstances, some of this leave may be postponed, to be used up to the time the child reaches nine years old.
Full-time employees who are on full leave, are employed for 37 hours a week and get more than DKK 21,092 as monthly pay will be eligible to receive payment from the authorities of up to DKK 4,865 per week/DKK 131.49 per hour before tax. Workers who earn below this hourly wage will continue to receive their usual salary rate during leave.
To qualify for leave employees must have worked a minimum of 160 hours within the last four months prior to the birth and at least 40 hours per month in at least three of those months.
Parental Leave
As outlined in the Maternity and Paternity leave sections, both parents receive 24 weeks of leave to care for their child. At least 9 of these weeks must be used by each parent within the first year. They can then choose to transfer some or all of the remaining available leave period, which must be used within the first year, except where circumstances allow for a portion to be used until the child reached the age of 9 years old.
Other Leave
- National Military or Civil Service Leave – employees between 18 and 30 are liable to be called up for the national military or civil service by ballot; men and women can also choose to volunteer for national service. The normal period of service is four months. Employees must be granted leave by the employer during national service and are protected against dismissal regarding requesting or taking such leave.
Termination
Termination Process
In Denmark, if an employee is over 1 year of service, they are protected from unfair dismissal. This means that in order for a dismissal to be lawful, a fair process must have been followed.
Employee misconduct, such as lack of cooperation or underperformance, will be subject to a PIP plan with the objective to help and provide guidance to the employee to improve performance. The company must have clear objectives agreed with the employee, a fair and reasonable time frame to achieve, arrangement for review meetings to discuss and review.
| Salary payment interval / date | Final payment on termination | Bank account payment requirement |
|---|---|---|
| Pay is commonly monthly, typically on the last working day of the month; the exact frequency and payday are set by contract or collective agreement. | Upon the end of employment, the employer must pay all remaining wages and any applicable severance/entitlements. For those covered by the Salaried Employees Act (funktionærloven) the severance is paid with the last salary payment. | Payment is normally made to the employee’s bank account (or to their “NemKonto” account), and cash payment is highly atypical. |
Notice Period
The Danish Salaried Employees Act specifies the notice of termination that must be given by the employer as follows:
- During the Probation Period = 14 calendar days notice
- 0 – 6 months service = 1 month notice
- 6 months – 3 years service = 3 months notice
- 3 – 6 years service = 4 months notice
- 6 – 9 years service = 5 months notice
- 9+ years service = 6 months notice
Workers who resign must give 1 month written notice of termination, regardless of the length of their employment.
Notice of termination will always be applied from the last business day of the month.
Severance Pay
Severance payments equal to 1 month’s pay might apply to workers with at least 12 years of continuous service. Workers with 17 years of continuous service can claim severance pay of 3 months salary.
There is no severance pay rights for workers who have less than 12 years service.
Probation Period
The probationary period in Denmark is dependent on the type of role and is stipulated within the employment agreement. In general, the maximum probation period is up to 3 months.
The probationary period for Fixed Term contracts cannot be more than one-quarter of their duration. It is not allowed to agree on further probationary periods in connection with the extension or renewal of Fixed Term contracts
Common Benefits
- Private Health Insurance – 1,000 to 2,000 DKK per month
- Pension Scheme – 5 to 10% of base salary
- Commuting Allowance (between home and work) – 500 to 3000 DKK per month
- Mobile Phone/ Internet Allowance – Employees in Denmark get phone and Internet subscription with a maximum cost of 258,33 DKK per month which are taxable for the employee through their salary.
- Additional Annual Leave – 5 days
Immigration
Danish law provides many options for employers of foreign nationals.
Denmark is a member of the European Union (EU) and the Schengen Area. Nationals of Finland, Iceland, Norway, and Sweden are free to reside, study and work in Denmark. However, suppose the employee is an EU/EEA or Swiss citizen and intends to live in Denmark for more than three months. In that case, the employee must apply for a registration certificate at the International Citizen Service or the State Administration (in Danish: “Statsforvaltningen”) upon arrival in Denmark.
Employers must meet the new threshold for new work permits under the pay limit scheme. Extensions of existing work permits may continue to use salaries from the initial application.
If the employee is a citizen of a country outside the EU/EEA or Switzerland, the employee must apply for a residence and work permit before entering Denmark. Suppose the employee already resides legally in Denmark. In that case, the employee can submit their application for a residence and work permit at newtodenmark.dk, at a Danish police station, or the Citizen Centre of the Danish Agency for International Recruitment and Integration.
With effect from May 2023, the Schengen Area countries have implemented a new digital system (EES) to track the entry and exit of non-EU citizens at their borders.
VAT
General
The standard rate of VAT in Denmark is 25%.
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Questions & Answers
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Payroll and Benefits Guide
in Denmark
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
| 1 Jan 2025 | Wednesday | New Year’s Day | |
| 17 Apr 2025 | Thursday | Maundy Thursday | |
| 18 Apr 2025 | Friday | Good Friday | |
| 21 Apr 2025 | Monday | Easter Monday | |
| 29 May 2025 | Thursday | Ascension Day | |
| 9 Jun 2025 | Monday | Whit Monday | |
| 25 Dec 2025 | Thursday | Christmas Day | |
| 26 Dec 2025 | Friday | 2nd Day of Christmas |
Is there a maximum length for a fixed-term contract?
There are no limits on the length of a fixed-term contract or the number of times it can be renewed, but the contract has to be tied to an objective criteria like the completion of a particular task or the arrival of a certain event.
How is the industrial injury insurance calculated?
Hi, thank you for your question. To answer, the industrial injury insurance is calculated based on the type of industry, number of employees the employer has, and the insurance company used to facilitate the insurance policy.
How does the optional pay account process work?
Hi, The optional pay account (free choice account) is for employees who have a collective agreement and are covered by the Agreement for Trade, Transport and Service, or the National Agreement for shops. It is an employer contribution of 6% (7% starting March 2022) that the employee uses to save up salary for use on holidays, childcare, sickness, etc., or for extra payment for pension. The employee chooses (depending on the agrrement) each year how many vacation days they want to take during the upcoming vacation period, how the value of the untaken vacation days should be used, and what the current payments to the free choice account are to be used for.
Hi, nice info and page!
As a future employer of temporary seasonal jobs in Copenhagen, will I have to calculate to give any sick leave benefits on short fixed term contracts, or is that 100% optional given that we wont have a collective agreement for this short period? And on contracts of 1-3 months, does paid time off (vacation) come into play?
Hi Johan, being a ‘seasonal worker’ in itself does not mean that time off and sick leave does not have to be given; there are many different employment terms that can impact this so it is important these requirements are always reviewed with the specifics of the company, industry and worker. For sick leave, there could be collective bargaining agreements that could have an impact. Generally white collar would receive full salary during sickness. For Blue collar there tends to be more variation in terms depending on any Union agreement/Employment contract/Staff handbook as well as length of employment. For vacation leave, workers on full-time schedules will earn 2.08 days every month; workers who are paid hourly earn 0.07 days per day.
Thank you for the reply!
Since these are seasonal kiosks open to retail household goods only about 1 month, and not being unionised, could we specify in our employment contracts that no sick leave and/or vacation days are earned?
So how are calculated overtime hours overal. I dont get it. Any hours after 37 should be treated as overtime? I’m in construction. Working 53 hours weekly. In contract not stated any fixed working hours.
Hi Sandor, overtime law in Denmark isn’t strict and overtime pay is not always required, that’s why it’s important for employees to have overtime agreements written within their contracts. There are however limits on working hours and daily rest requirements. An employee should not be working more than 48 hours on average per week measured over a period of four months. I recommend speaking with your HR team to understand your companies specific requirments.
When holiday payment should be payed when you have claimed that? I have waited over one month so far..
And yes i have spoke with employer several times.
Hi Markus, holiday pay is generally paid out on May 1st of each year.
How it goes on that situation when you dont work on that company anymore? I have changed my employer in September.
Hi Markus, how long did you work at your previous company for?
Not long. 4 months. There was so much issues with salaries etc.
Hi Markus, this is not something that we can really advise on. In general, an employee is eligible to get paid holiday pay after completing one month of employment. At the end of your employment, you should receive holiday pay unless it’s already been taken. However, most likely holiday pay will be paid to your account with Feriekonto. I would suggest that you speak with the employer and find out what has been arranged.
What is the maximum working hours per week for a university student from abroad? And the minimum hourly rate?
The maximum number of hours that international students can work per week is 20. The minimum wage isn’t set, but students typically earn between 75 and 90 DKK per hour.