Global markets open doors, but employment regulations can slam them shut. Denmark, with its dynamic economy and skilled workforce, is an attractive market to find top talent. However, it’s essential to understand the country’s progressive employee environment and laws before you hire. 

Luckily, there’s a way for you to access these skills without the legal red tape. A Denmark employer of record (EOR) manages all aspects of global employment, helping you stay compliant from day one. From drafting contracts to handling payroll and taxes, a Denmark EOR like G-P allows you to hire skilled talent, quickly and easily — without having to set up a new entity.

Simplify hiring in Denmark with an employer of record

Collective bargaining agreements (CBAs) shape Denmark's employment terms. This system, known as The Danish Model, involves negotiations that set standards for pay, hours, and other conditions. While EU-wide laws set some minimum standards, the specifics are largely based on CBAs.

About 60% of Denmark’s workforce belongs to trade unions, and most employees are covered by a CBA, even if they’re not union members. CBAs are complex and sector-specific, but using a Denmark EOR like G-P to hire local talent simplifies many processes.

The EOR hiring process in Denmark

  1. Partner with a reputable global EOR. A Denmark EOR with deep expertise can guide you through local legal challenges.

  2. Source your ideal candidate. You find the best talent for your needs, and the EOR handles the rest. 

  3. Draw up a compliant employment contract. A Denmark EOR drafts a locally compliant contract that reflects all mandatory terms under CBAs, including salary, working hours, and notice periods.

  4. Onboard and manage your team. The EOR manages all aspects of the employment lifecycle. This includes registering the employee with Denmark's tax and social security systems and administering benefits.

See how an EOR works

Employment contracts in Denmark

Denmark’s Employment Certificates and Certain Working Conditions Act came into force in 2023. It states that employers must provide employees with a written contract no later than seven calendar days after employment begins. 

Employees working an average of three hours or more a week for four weeks in a row also need a contract.

When drafting a contract, you must include the job description, place of work, start date, salary, working hours, and vacation entitlement. It’s standard for an offer letter and employment contract to state compensation in Danish krone (DKK). But this isn’t a legal requirement, and a salary can be agreed in any currency (unless a CBA says otherwise). 

Although employers aren’t legally required to do so, we suggest translating the contract into the employee’s language to avoid misunderstandings.

A Denmark employer of record (EOR) creates fully compliant employment contracts, aligned with local, EU, and CBA requirements. 

Leave entitlements in Denmark

Working hours in Denmark

The standard workweek is 37 hours, Monday to Friday. Average weekly working hours can’t be more than 48 hours over four months, including overtime. 

Employees are also entitled to at least one full day off per week, typically Sunday. Overtime isn’t set by law but is governed by CBAs, which may offer payment or time off instead. 

Public holidays in Denmark

Denmark has 10 paid public holidays. Since 2024, General Prayer Day (Store Bededag) is no longer a public holiday.

  • New Year's Day

  • Maundy Thursday

  • Good Friday

  • Easter Monday

  • Ascension Day

  • Whit Sunday

  • Whit Monday

  • Constitution Day

  • Christmas Day

  • Second Day of Christmas

Constitution Day isn’t an official public holiday, but many CBAs or contracts provide for a full- or half-day off. Time off and pay on public holidays depend on the employment contract or CBA.

Vacation days in Denmark

Under the Danish Holiday Act, all employees are entitled to 25 working days (five weeks) of paid vacation a year. Vacation builds up concurrently, meaning employees earn and can take vacation in the same year. The holiday year runs from September 1 to August 31. Employees earn 2.08 days of paid vacation for each month of employment. 

Salaried employees also receive a holiday supplement (ferietillæg) of 1% of their annual salary, typically paid in two installments or when the holiday is taken. The first four weeks of built-up vacation time must be taken and can’t be paid out unless the employee leaves their job. If the fifth week isn’t used by the end of the holiday period, it can be paid out instead.

Denmark sick leave

Under the Danish Salaried Employees Act (Funktionærloven), salaried employees are entitled to their full salary when they’re sick. A CBA or the Sickness Benefit Act sets sick pay for non-salaried employees. 

After the first 30 days’ absence, the employer may qualify for reimbursement of sickness benefits from the employee's local municipality. These benefits are capped at a set weekly rate and are generally available for up to 22 weeks in a nine-month period.

Parental leave in Denmark

Denmark has a comprehensive parental leave system, reformed in August 2022. It provides 52 weeks of leave, with parental benefits shared between parents. Parents with children born on or after August 2, 2022, are each entitled to 24 weeks of parental leave after the birth, plus four weeks of pregnancy leave for the birth parent, totaling 52 weeks. Special rules apply for single parents or parents not living together. 

Parental leave benefits are administered by Udbetaling Danmark (Public Benefits Administration) and calculated based on the parents’ earnings and weekly working hours. Many employees are entitled to full or partial salary during some of their leave through employer-paid supplements. These aren’t set by law but are common in CBAs and contracts.

How an employer of record helps manage leave entitlements in Denmark

You don’t need to manage employee working hours and leave — a Denmark EOR will do it for you. An EOR Denmark also handles the complexities of parental leave, holiday supplements, and municipal reimbursements for sick leave.

Health insurance and supplementary benefits in Denmark

Anyone living in Denmark for more than three months needs a Civil Personal Registration (CPR) number. This is a social security number that enables access to public services, including healthcare. Employees also need a CPR number to get their salary, open a bank account, pay taxes, and more. An employer of record in Denmark can manage this process on your behalf.

Read more about compensation and benefits in Denmark.  

How an employer of record helps with benefits in Denmark

An employer of record in Denmark manages required benefits on your behalf. They ensure your benefits comply with Danish laws and CBAs, so you can hire confidently without setting up a local entity.

Bonuses in Denmark

We suggest employers budget 20% for benefits costs, on top of employees’ gross salaries. Incentive bonuses are increasingly common in Denmark, even in the public sector. These additional expenses are usually negotiated in the employment contract.

Termination and severance in Denmark

Salaried employees covered by the Salaried Employees Act are protected from unfair dismissal. The legal minimum notice period required from an employer depends on the employee's length of service:

  • Up to three months’ employment (probationary period, if agreed): 14 days' notice

  • Up to six months: One month's notice

  • After six months: Three months' notice

The notice period increases by one month for every three years of service, up to a maximum of six months. 

Employees continuously employed for more than 12 years are entitled to a severance payment between one and three months' salary, depending on how long they’ve worked for the company.

An EOR Denmark takes the hassle out of termination, severance pay, and offboarding. By taking on these responsibilities, an EOR mitigates legal risks and ensures a smooth, compliant offboarding process in Denmark.

Payroll and payroll taxes in Denmark

An employer of record Denmark handles all payroll requirements, including calculating and withholding employee income taxes like labor market, state, and municipal taxes. A Denmark EOR also reduces your admin and social security compliance burden by managing employer and employee social security contributions. 

Denmark tax includes:

  • Labor market tax (AM-bidrag): A flat 8% tax on total earnings.

  • State and municipal taxes: Personal income tax is paid at both municipal (25% average) and state levels. 

  • Personal allowance: Individuals have a personal tax allowance (DKK 54,100 in 2026) before they pay state and municipal taxes. This is deducted from income before municipal and state taxes. An employee must be taxable in Denmark for one full income year to get the full deduction.

  • Church tax: A tax for members of the Danish Evangelical-Lutheran Church.

Employer and employee social contributions:


Social security is funded through taxes and mandatory contributions. The main direct contributions are:

  • ATP Livslang Pension: Everyone who works in Denmark must contribute to the Danish labor market supplementary pension fund (ATP). These are deducted from an employee’s pay before the calculation of income tax. As a general rule, the employee pays a third, and the employer pays the other two-thirds.

  • Other mandatory contributions: Employers also have to contribute to a maternity leave fund, an occupational injury insurance scheme (AES), and other public social security schemes. These costs must be factored into the total cost of employment.

A Denmark EOR works out employee salaries and bonuses, along with mandatory withholdings, such as income tax and social security contributions. This saves you time and headaches, keeping your business compliant with complex tax and payroll regulations. 

Choose the right EOR in Denmark

Before deciding on an employer of record in Denmark, consider the following: 

  • Danish labor law expertise. Your EOR partner needs deep knowledge of local labor laws, especially complex CBAs that govern most employment terms in Denmark. This ensures hiring is always compliant.

  • Comprehensive service offering. Look for a partner that offers end-to-end support. This includes compliant contract generation, payroll and tax management, local benefits administration, and guidance on offboarding.

  • Proven track record. Choose a Denmark EOR with a strong reputation and experience in the Danish market. Customer testimonials and case studies can be helpful here.

  • Powerful technology. An AI-powered EOR reduces manual efforts and automates employment tasks. It simplifies onboarding, payroll, and HR management, which increases efficiency and accuracy.

  • In-country expertise. Access to local HR and legal experts is essential. This ensures you get fast, accurate advice and that any challenges are resolved in compliance with Danish regulations.

  • Scalable solutions. Select a partner that can grow with you. Your EOR should support your needs, whether you’re hiring one person or building an entire team in Denmark.

  • Data security and compliance. Ensure your EOR follows strict data security protocols like GDPR. This is critical for protecting sensitive employee information and maintaining compliance.

Learn more about choosing the right EOR.

Use G-P EOR for global hiring in Denmark

G-P EOR is the award-winning, AI-powered global hiring solution that empowersstartups,SMBs, andenterprise businesses to build global teams with ease. Onboard, manage, and pay top talent in over 180 countries in minutes, without the complexity of entity setup. 

G-P EOR is thepreferred partner for leading HCM, PEO, and payroll platforms. Bring your workforce data together in one place while keeping consistent and accurate data across your integrated systems.


Request a proposal to start hiring in Denmark today.