Employer of Record in Denmark

The EOR (Employer of Record) solution for Denmark enables your company to grow in Denmark without the requirement to set up an entity. You can hasten the onboarding of your remote staff and efficiently handle their payroll, benefits, and other needs thanks to our centralised and automated global HR platform. With the knowledgeable support of our global network, we aid you in streamlining the process of global growth.

We provide you access to the top Danish talent across all experience levels. We can handle tasks like hiring, managing contracts and payrolls, onboarding, and personnel record administration through our local network and worldwide infrastructure, allowing you to concentrate on your company’s main business operations. Find out more about our specialised EOR offerings.

Overview of Denmark

• Estimated Population: 58.1 million
• Currency: DKK Danish Krone
• Capital: Copenhagen
• Languages spoken: Danish, English
• GDP: USD 350.1 billion

Employment Landscape in Denmark

Unlocking the Benefits of Employment in Denmark: Understanding the Labor Landscape

The employment system in Denmark combines flexibility with security under the European notion of “flexicurity.” Denmark, like other European countries, has a very flexible workplace, making sure that everyone in the labour force has access to job options. Denmark has a greater workforce participation rate than many other nations, with approximately 50% of the population in the labour force. Employees in Denmark are free to participate in social programs and receive benefits if they become unemployed.

There are three main types of workers in Denmark: managers and self-employed people as well as white-collar, blue-collar, and other workers. While certain broad rules and regulations apply to all groups, there are particular laws for each group that specifically address their unique needs and demands.

All employees employed within the nation are covered by Danish employment and labour laws, protecting their rights and safeguards. In Denmark, labor unions also actively and effectively represent the interests of employees. It’s vital to remember that working with these unions could be required when recruiting often or in certain situations.

A thorough grasp of Danish labour and employment rules may provide businesses a considerable competitive edge and hasten the growth process. Organisations may confidently navigate the Danish labour market by being knowledgeable and compliant.

We invite you to get in touch with us if you’d like to learn more about the nuances of working in Denmark and how it might help your business. You may get more information and advice from our knowledgeable staff to assist you in making wise choices and taking advantage of possibilities in the Danish market. Call us right away to find out more.

Some of the provisions of Employment Laws to note before hiring in Denmark are as follows:

Title	Explanation
Danish Salaried Employees Act	The basic legislation that governs all white-collar workers in Denmark is the Danish Salaried Employees Act. It outlines in great depth the procedures for hiring, the legal responsibilities of employers and workers, probation and termination, benefits, and all other facets of employment. This Act covers all employment-related activities.
Danish Act on Restrictive Covenants	Restrictive covenants are clauses in a contract that specify the circumstances in which one party is unable to affect another. Restrictive covenants are a new notion in employment contracts brought about by this Act.
Danish Holiday Act	The Danish Holiday Act, a distinct piece of law passed by the Danish Parliament, specifies the number of vacations that certain employee classifications are entitled to. The mandatory holiday that employees must take, the monthly holidays to which they are entitled, and the accumulation of holidays are all covered by this Act.
Differential Treatment Act	The Differential Treatment Act, as its name implies, forbids treating workers or applicants for employment differently or unfairly on the basis of their age, skin colour, handicap, political opinions, religious convictions, ethnic origin, or nationality.

Timings, Holidays, And Leave Policies in Denmark

Entitlements	Explanations
Statutory Working Hours	In Denmark, a typical week would consist of 37 hours of labour. The main working hours are from 6:00 am to 6:00 pm, Monday through Friday. Typically, the lunch break lasts for 30 minutes.
Rest Period	If a continuous shift lasts more than six hours, a break is required. The length of the break will depend on its intended use, such as if it is a mealtime break.
Public Holidays	There are several national holidays in Denmark that are obligatory leaves for employees. These holidays are as follows. New Year’s Day Maundy Thursday Good Friday Easter Sunday Easter Monday Great Prayer Day Ascension Day Whit Sunday Whit Monday Constitution Day Christmas Day Second Christmas Day
Maternity Leave & Paternity Leave	Parental leave is permitted for a total of 50 weeks in Denmark. Up to 14 weeks after giving birth, the woman may take up to four weeks of leave. After this, the mother and father may freely divide the parental leave among themselves for an additional 32 weeks.
Sick Leave and other leaves	Employees may take sick leave for 30 days with pay.
Annual Leave Entitlement	According to the Danish Holiday Act, each employee is entitled to 2.08 days of paid leave every month, for a total of five weeks of paid vacation per year. Employees accrue vacation time throughout a 12-month period, and they then have 16 months to use at least 4 weeks of those vacation days.

Contractors vs. Full-time Employees

Since every child in the nation gets access to free education up to graduation, Denmark stands apart for its approach to education. As a result, a sizable portion of the Danish population is employed, which reflects a highly educated and competent labour force.

Before it caught on in many other areas of the world, Denmark was one of the first countries to embrace the idea of remote work. A seamless infrastructure for remote work is made possible by the country’s strong internet and communications connectivity, which almost completely covers the whole country. As a result, Denmark was ready and quick to adapt when remote work became necessary internationally in 2020, owing to its top-notch infrastructure and forward-thinking mentality.

Various forms of work are covered under the labour and employment laws of Denmark. According to the Danish Salaried Employees Act, full-time employees who have worked the requisite number of hours for at least a month are entitled to a contract with benefits and conditions. Danish law also recognizes and protects agency, part-time, and temporary employees. Given that the law does not create material differences based on employment type in this context, these employees should be provided with the same benefits and protections as their full-time counterparts.

Denmark supports equity and inclusion in its labour market by recognizing and granting equal rights to employees across all job kinds.

Businesses looking to operate in Denmark must be aware of the complexities of Danish labour and employment legislation. Effectively managing these restrictions enables businesses to build trusting working relationships with staff members and foster a positive workplace culture.

Reach out to us right now to learn more about the Danish labour market and to investigate potential for your company. Our experienced staff can help you through the complexities of working in Denmark so you can make wise choices and succeed in this competitive market.

Scope of Negotiating Terms

Any level of employee has the right to discuss remuneration with their employer. The discussion of pay for a position is often a set phase in any hiring procedure. Candidates must declare their views about pay and perks throughout the final stage of this procedure.

It is also crucial to remember that employees have more clout the higher they are on the corporate ladder or hierarchy. In Denmark, there are fewer highly qualified individuals available for top-level positions than in any other labour market. Employers often take applicant preferences into account, particularly when filling higher-level positions.

Recruiting in Denmark

Creating a thorough job description is the first important step in the hiring process. While it might seem simple, creating the ideal job description sometimes involves many days of coordination between the HR staff and the hiring department. The job description is published after it is complete on the company’s Careers website as well as on job search engines and professional social media sites like LinkedIn.

The HR team then starts looking over the submitted applications, either continuously or after the deadline. A shortlist of candidates is invited to move on to the next stages of the recruiting process after an initial screening.

Companies frequently use a written test as the first stage when there are several candidates that have been shortlisted. Those who do well on the written test go to the interview stages, which may involve technical evaluations and sessions with senior management and HR departments. There are often fewer formal interviews for senior posts.

The HR staff then thoroughly investigates the backgrounds of the remaining applicants. Successful talks result in a formal offer of employment being made to the selected candidate.

There are several benefits to using internet portals for talent sourcing. As prospects proactively contact the organisation rather than requiring active scouting, the main benefit is that HR staff may complete the full hiring process within the walls of their office. This drastically lowers the expense of hiring. However, one significant disadvantage of online recruiting in Denmark is the possibility for an excessive number of applications because of the amount of highly skilled applicants seeking for vacancies, imposing a significant pressure on HR staff.

Although internet recruiting speeds up the employment process, businesses must manage the flow of applications and devise effective methods for screening and shortlisting prospects. HR teams may overcome the difficulties brought on by large application quantities by utilising technology and putting strong selection criteria into place.

We provide professional advice and assistance in order to maximise your hiring efforts in Denmark and guarantee a successful hiring outcome. To find out more about our thorough hiring solutions specifically designed for the Danish market, get in touch with us right now.

Probation & Termination

In Denmark, the specific rules governing probation periods are not explicitly defined. Instead, the duration of the probationary period is typically outlined in the employment contract negotiated between the employer and the employee. In most cases, the probationary period does not extend beyond six months.

When it comes to termination, Denmark stands out as a country with relatively straightforward procedures compared to other European Union nations. Unless employees are covered by a fair dismissal clause in their contract or protected by provisions outlined in the Salaried Employees Act, there is no inherent protection against dismissal. Employers are not required to inform trade unions or employment agencies when terminating an employee.

Simplicity in termination is further facilitated by the ease of access to unemployment benefits in Denmark. However, certain specific protections against termination exist for employees on parental leave, individuals belonging to certain minority groups and communities, or those elected as representatives of a union.

While termination procedures may seem more straightforward in Denmark, it is crucial for employers to remain knowledgeable about the specific terms outlined in employment contracts and applicable legal provisions. Compliance with relevant laws and regulations, as well as adherence to fair and ethical employment practices, is essential for maintaining a positive work environment and safeguarding employee rights.

As experts in the Danish employment landscape, we can provide comprehensive guidance and support in navigating probationary periods, termination processes, and compliance with relevant legislation. Contact us today to learn more about our tailored solutions for your specific employment needs in Denmark.

EOR Solution

Setting up a business in Denmark entails a number of responsibilities. You must adhere to a number of rules and regulations, and even one mistake might cause the entire procedure to be delayed by several weeks. A Danish EOR partner can put everything in perspective and enable a seamless development of your company by utilising their strong local network and knowledge of Danish employment and labour laws.

Keep in mind that working with an Employer of Record does more than merely streamline your recruiting and recruitment procedures. Additionally, you are saving time and enabling yourself to concentrate on more crucial facets of your expansion. Learn more from our professionals about the advantages of EOR solutions.

Types of Visas in Denmark

Visa Category	Explanation	Duration
Short-Stay Visa	You may be granted a short-stay visa to Denmark for a number of reasons. These visas allow you to visit family and friends in Denmark and are not merely limited to travel.	Up to 90 days
Business Visa	In general, Denmark also issues short-term business visas. You must be able to prove that you will be travelling to Denmark for business-related purposes and the length of your stay there. This can take the shape of letters of invitation and other forms of proof.	Up to 90 days
Long-Stay Visa	Denmark’s long-stay visa is often only issued on a case-by-case basis. You must be able to prove that you will need to travel to Denmark often for a brief period of time. Being an EU citizen normally makes it much simpler to obtain this visa.	Up to five years, during which time you may spend 90 out of every 180 consecutive days in Denmark.
Work Visa	European Union nationals do not require the visa required to work in Denmark, while all other nationalities do. The employer often applies for, or at least sponsors, the employee’s Danish work visa on the employee’s behalf.	Up to 4 years

Work Permits

Non-EU nationals, particularly those from the Nordic nations, must apply for a separate work permit in order to work in Denmark. When you have a job offer in hand, you can apply for this work permit. Work permits for other forms of employment are only issued for periods of three months at a time, whereas those for indefinite employment are provided for a maximum of four years and are renewed. Speak with our specialists right now to learn more about work permits in Denmark and how we can get them for you to begin your growth process.

Payroll & Taxes in Denmark

Payroll setup in Denmark must strictly adhere to local rules and regulations. This entails any payroll benefits and clauses that you are required by law to offer your employees.

Taxation is a related factor to which you should also pay attention. Taxes are among the most strictly enforced laws in the world and can vary greatly from nation to nation. One of the most crucial areas where an EOR partner may be very beneficial to you is in the area of taxes, helping you with payroll setup and paying your fair amount of taxes. To learn more about the Danish payroll and taxation system, schedule a demo with us.

Payroll Details

Process	Details
Taxation ID	The SE Number is the special identification number used for tax reasons. Every time you pay taxes, the SE number must be mentioned. The Danish Customs and Tax Administration, or SKAT, is responsible for issuing this number.
Choosing a Payroll System	The perks and provisions that must be provided to employees in accordance with local regulations should not be the least of these considerations when choosing a payroll system. The sort of people you recruit and how they are divided between your company’s full-time employees and contractual or agency workers might also influence your choice of payroll system.
Acquisition of employee information	It is essential to have all personnel information on hand, both for tax purposes and to expedite internal operations. You need to have cutting-edge, secure IT solutions so you can easily store and access employee data.

Taxation in Denmark

Employer Taxation

Tax	Explanation
Corporate tax	22%

Employee Taxation

Tax	Explanation
An employee’s wage is subject to income tax (there are two structures available; employees can select the one they like to use).	DKK 0 to 56,500 27.00% More than DKK 0 to 56,500 42.00%
Financial year-end date	31 December
Sales Tax	25%

Bonuses

Despite the fact that Denmark does not have a law requiring the payment of a 13th paycheck, performance-based incentives are gaining popularity.

If you follow the rules, establishing a subsidiary in Denmark may go surprisingly smoothly and quickly. The easy steps to establishing your subsidiary are as follows:

• Choose the business form, such as a partnership, private company, or public corporation, that best meets your needs.
• Select a distinctive name for your subsidiary that fits with your identity and sets it apart from other companies.
• Become a member of the Danish Business Authority. You will receive a CVR number—a distinctive identifying number for your subsidiary—after completing this step.
• You must also register for Value Added Tax (VAT) if your subsidiary is anticipated to make more money selling goods or services than a predetermined threshold.

Securing compliance with all legal requirements and regulations is crucial when setting up a subsidiary in Denmark. Seeking professional advice may speed up the procedure and guarantee that your subsidiary is set up in strict conformity with Danish legislation.

Our organisation specialises in supplying specialised solutions for establishing Danish subsidiaries and offers full support for the whole procedure. We are committed to assisting you in having a successful growth in Denmark, from legal compliance to strategic advice. To discuss your unique requirements and identify the ideal solution for establishing your subsidiary in Denmark, get in touch with us right away.