Quick facts

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Denmark, located in Northern Europe, is known for its high standard of living, progressive social policies, and a strong welfare system. The economy is primarily driven by services, industry, and agriculture, with Denmark being a leader in renewable energy. Its labor market is characterized by high wages, strong unions, and a flexible employment system, often referred to as "flexicurity".

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Employment Contracts

In Denmark, most employment contracts are indefinite unless otherwise specified. Fixed-term contracts can only be renewed more than once if there is a justified reason. Employment relationships are typically formalized with clear written agreements, although verbal agreements are also legally binding.

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Probation Period

There are no mandatory laws on probation periods, but it is common to agree upon a 3-month probation period. During this time, either party can terminate the contract with 14 days' notice. For employees recruited from outside the Capital Region, the employment contract usually includes a probationary period.

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Working Hours

The standard workweek in Denmark is 37 hours, typically from Monday to Friday between 6:00 AM and 6:00 PM. Workers are entitled to a 30-minute lunch break, which may or may not be paid, depending on the employer. The EU Working Time Directive mandates at least 11 consecutive hours of rest per day and a 24-hour rest period per week. Weekly working hours should not exceed 48 hours, including overtime.

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Vacation Days

Employees in Denmark are entitled to 5 weeks of paid vacation per year, earned continuously from 1 September to 31 August. For every month of employment, employees earn 2.08 days of paid leave. If an employee hasn't worked a full calendar year, they still have the right to take vacation, though it may be unpaid.

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Sick Leave

Employees in Denmark are typically entitled to full pay during illness for a limited period. Employers are required to pay sick leave for the first 30 days of illness. The amount is calculated based on the employee’s average earnings over the past 3 months, with a maximum of DKK 4,460 per week. After this period, the local authorities may provide sickness benefits if the employee meets certain eligibility requirements.

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Wages and Salary Payment

Salaries in Denmark are generally paid on the last banking day of the month. There is no national minimum wage, but in 2022, most wages are around 110 DKK per hour (approximately $16.60 USD). Gross monthly salaries for full-time positions average 17,000 DKK (around $2,580 USD), although taxes can be quite high, sometimes exceeding 50%.

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Public Holidays

Denmark recognizes several public holidays, including:

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• January 1: New Year’s Day
• March-April: Easter (Maundy Thursday, Good Friday, Easter Sunday, Whit Monday)
• Great Day of Prayer (Friday before the fourth Sunday after Easter)
• Ascension Day (40 days after Easter Sunday)
• Pentecost (Whit Sunday and Whit Monday)
• December 25: Christmas Day
• December 26: Boxing Day

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Employer Taxes

Employers in Denmark contribute to social security through the following:

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• ATP (Supplementary Pension): DKK 2,271.6 annually.
• Maternity Fund Contribution: DKK 1,350.
• Industrial Injuries Insurance: Approximately DKK 5,000 (depending on the field).
• Other Social Security Schemes: DKK 5,300.

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Employee Taxes

Taxation in Denmark is high. The income tax structure for 2022 includes:

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• 12.14% bottom tax on personal income.
• 15% top tax on higher earnings.
• 24.954% municipal tax on taxable income.
• 8% labor market tax.
• 27% tax on share income up to DKK 55,300, and 42% above that.

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Employees also contribute to ATP (Supplementary Pension): DKK 1,135.8 annually.

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Notice Period

The notice period in Denmark depends on the length of employment:

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• 1 month for employment up to 6 months.
• 3 months for employment between 6 months and 3 years.
• 4 months for employment between 3 and 6 years.
• 5 months for employment between 6 and 9 years.
• 6 months for employment exceeding 9 years.

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Termination and Severance Pay

Employees dismissed after 12 years of service are entitled to severance pay. The severance amount varies:

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• 1 month’s salary for employees over 40.
• 2 months’ salary for those over 45.
• 3 months’ salary for those over 50.
• 5 months’ salary for those over 55.
• 6 months’ salary for those over 60

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‍Additionally, employees with over 17 years of service may receive an extra three months' salary as compensation.