Employment and labor laws vary from country to country. This guide is intended to provide the most up to date information available. We will update this guide as needed when changes are made to the laws.
Employment Contracts
Employers are legally required to provide formal written contracts for all employees that include salary/wage, termination terms, job title, etc. The contracts must be written in Danish and use the Danish Krone currency (DKK).
Working Hours
A general working week for a Danish employee is five days, working on average 37.5 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
A maximum of 48 hours can be worked per week including overtime. Overtime hours in excess of 37 hours a week are paid at an overtime compensation rate between 150-200% of the employees’ regular pay rate, depending on the Collective Bargaining Agreement in place. Overtime pay is not mandatory unless stated in a Collective Agreement.
Public Holidays
Public holidays that fall on the weekend are usually lost.
For the year 2024:
- Jan 1: New Year’s Day (Monday)
- Mar 28: Maundy Thursday (Thursday)
- Mar 29: Good Friday (Friday)
- Mar 31: Easter Sunday (Sunday)
- Apr 1: Easter Monday (Monday)
- May 9: Ascension Day (Thursday)
- May 19: Whit Sunday (Sunday)
- May 20: Whit Monday (Monday)
- Dec 25: Christmas Day (Wednesday)
- Dec 26: 2nd Day of Christmas (Thursday)
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 2022 to 31 August 2023 may be taken up to and including 31 December 2023, though this is still subject to approval from the employer.
Workers must use at least 20 days leave per year, any remaining days can be carried over into the following year. If special circumstances prevent the employee from taking accrued paid holiday before the holiday period expires then up to four weeks of paid holiday can be transferred to the next holiday period.
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 days are paid by the employer. Further leave is paid by the authorities (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 and Paternity
Maternity Leave
The mother is entitled to 4 weeks’ maternity leave before the expected date of birth – however, the mother is entitled to longer maternity leave if this is stated in their terms of employment.
Following childbirth, mothers are entitled to 24 weeks of leave, which is categorized as follows:
- 2 weeks of parental benefits immediately after childbirth.
- 8 weeks of parental benefits before the child reaches 10 weeks of age.
- 14 weeks of parental benefits to be used before the child turns one year old. (5 weeks of this period can be postponed until the child reaches nine years if specific conditions are met.)
Full-time employees (those working 37 hours a week with a monthly salary exceeding DKK 19,728) will receive the highest unemployment benefit of DKK 4,550 (2023) per week before tax during their leave.
To qualify for maternity leave or parental leave, employees must work a minimum of 40 hours per month for at least three months.
Paternal Leave
Fathers or co-mothers are also entitled to 24 weeks of leave after the child’s birth, consisting of:
- 2 weeks of compulsory leave immediately after the birth.
- 22 weeks of flexible leave, which can be used within the first year after the child’s birth, with exceptions for special circumstances.
- The 9 weeks of leave within the first year cannot be transferred to the other parent and must be taken within one year.
- The remaining 13 weeks can be transferred to the mother and utilized until the child reaches one year of age. This period can be extended or postponed until the child reaches nine years, subject to specific conditions.
These regulations ensure that both parents have the opportunity to take time off to care for their child during the crucial early stages of life.
Other Leave
National Military or Civil Service Leave – In Denmark, employees between 18 and 30 are liable to be called up for the national military or civil service by ballot, while both men and women can 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.
Employee Severance and Terminations
Termination Process
Employers are required to have a valid justification for terminating an employee to prevent potential claims of unfair dismissal. Justifiable reasons encompass factors such as an employee’s unsuitability for their role, issues related to cooperation, or financial and company-related concerns like work shortages, restructuring, or cost-saving measures.
In cases where employees with more than 12 months of service are terminated due to poor performance, it is imperative to ensure that a proper disciplinary procedure has been followed to minimize the risk of an unfair dismissal lawsuit. The pre-dismissal process should entail issuing a warning to the employee and conducting performance reviews, with the objective of establishing a clear and attainable performance improvement plan. This plan should afford the employee a reasonable timeframe within which to enhance their performance. The employee should be provided with a genuine and meaningful opportunity to rectify their performance or behavior.
Furthermore, additional support, such as training, may be offered to provide the employee with ample opportunities to enhance their performance and avoid termination.
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 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 must give 1 month written notice to terminate, regardless of the length of the 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 are 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, probation periods are 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
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.
The minimum wage is decided through the Collective Bargaining Agreements of each sector.
For foreign nationals working in Denmark, the Government has set a minimum salary under the pay-limit scheme at 465,000 DKK per year (for 2023).
13th Salary
In Denmark, it is not a legal requirement to pay a 13th-month salary payment; however, employees are known to offer employee bonuses.
Contributions
Employer Payroll Contributions
VISA
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 as of Jan 1st, 2022, 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.
VAT
The standard rate of VAT in Denmark is 25.00%.