Before hiring employees in Denmark, there are some key things you’ll need to know. Firstly, Denmark has one of the most generous parental leave policies in the world. Parents are entitled to a combined total of up to (partially paid) 52 weeks of leave.
It’s also important for employers to know that for each month worked in a calendar year, employees accrue 2.08 days of paid vacation leave. This means the number of paid holidays an employee can take in a year depends on the number of months they worked in the previous year.
We know keeping track of all this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform.
Get an overview of what you need to know when hiring in Denmark below.
A workweek in Denmark is around 37 hours. It should not exceed 48 hours, including overtime.
Typical overtime pay rate is 150% of the regular pay for the first three hours, and 200% for subsequent hours, holiday, or Sunday work.
In Denmark, probationary periods are three months.
When it comes to dismissal, employees are entitled to a notice period of between one and six months, depending on their seniority.
For resignations, employees in Denmark must provide their employer with one month's notice.
Non-compete agreements in Denmark must be reasonable in scope and can last only for a maximum of 12 months from an employee’s date of termination.
During the term of the agreement, employees are entitled to a monthly compensation of 40% (if the duration of the clause is up to six months) or 60% (where the duration of the clause is longer than six months) of their monthly salary at the time of the termination of their employment.
This compensation can be reduced to 16% (where the duration is up to six months) or 24% (where the duration of the clause is longer than six months) if the employee obtains other appropriate employment during the term of the clause.
Employees in Denmark are only entitled to paid holiday when it has been accrued in the previous calendar year. Employees earn 2.08 days' paid holiday for each month of work in the preceding year, and so they can earn up to 25 working days of paid vacation per year.
Employees in Denmark receive full pay during sick leaves. This is paid for by their employers for the first 30 days, after which it is paid by social benefits for up to 22 weeks.
Employees get maternity leave of four weeks before birth and 14 weeks after (the first two weeks after the birth are mandatory). Eligible employees (who have worked for at least 160 hours in the last four calendar months, and 40 hours each month in at least three of these months) are entitled to 50% of their wages for this time. Employees who are covered by agreement may be entitled to full pay.
Employees are entitled to two weeks’ paternity leave, within the first 14 weeks following birth.
Following this, parents can take another 32 weeks of leave (shared between both parents), which is paid at a lower monthly rate.
The total social contributions for employers in Denmark is 1241 DKK per month and includes contributions for pension, education, occupational injury, the Danish Labour Market Fund, maternity leave fund, and industrial industry insurance.
Employees in Denmark are taxed between 8% and 56.5% depending on their income bracket. Employees also pay 1135.80 DKK in social security contributions.
Employees who have been in continuous employment for 12 or more years are entitled to a severance pay of between one and three months’ salary. Shorter term employees may be entitled to severance pay negotiated in their employment contract or under a collective agreement.
Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast.
We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities.
With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.