Hire employees in Denmark
Everything a foreign company needs to know before employing people in Denmark: whether you need an entity, why statutory employer on-costs look low until pension and 12.5% holiday pay are in, how eIndkomst and ATP work, which leave is mandatory, and how flexicurity pairs short notice with strong social provision. Written for CHROs, CFOs, General Counsel and founders.
Quick answers
The questions leadership teams ask first, answered directly. Detail follows further down the page.
Do I need a local Danish entity to hire?
No. Foreign companies can engage talent in Denmark through three routes:
- Employer of Record. Dryft Global employs the person through compliant local infrastructure. Dryft issues the Funktionærloven or CBA-aligned contract, remits ATP and Samlet Betaling funds, runs eIndkomst withholding, accrues holiday entitlement and carries primary statutory employer liability. You direct the day to day work.
- Direct local entity (ApS or A/S). You incorporate, register as an employer with Skattestyrelsen, enrol in ATP / Samlet Betaling and run Danish payroll yourself.
- Independent contractor. Lawful only for a genuinely independent specialist. Misclassification exposes you to holiday pay, ATP and Funktionærloven claims. See the contractor section below.
When should I use an EOR instead of setting up a Danish ApS?
An EOR makes commercial sense when you are:
- Onboarding people in about 1 to 2 weeks rather than waiting on ApS formation, banking and eIndkomst enrolment.
- Testing Copenhagen, Aarhus, Odense or Aalborg with a small life-sciences, fintech, maritime or robotics team before committing to a permanent presence.
- Avoiding concurrent holiday accounting, Store Bededag supplements and CBA pension enrolment while you still decide whether Denmark is a permanent hub.
A local ApS becomes the right answer when headcount grows sustainably, when customers require a Danish contracting party, or when you want direct overenskomst participation.
What does an employee actually cost beyond salary?
Statutory employer social charges are low by European standards. ATP for a full-time employee totals DKK 284.00 per month, of which the employer pays two thirds (DKK 189.35), plus AUB, AES, Barsel.dk and related Samlet Betaling funds (often around DKK 10,000 to 12,500 per year combined). The real burden is occupational pension at a market 8% to 12%+ of gross, holiday supplement of at least 1.0%, the 0.45% Store Bededag supplement, and for hourly staff 12.5% holiday pay to FerieKonto. On DKK 750,000 base, a worked example lands around DKK 894,000 (~119% of base). Full breakdown below.
How difficult is termination in Denmark?
Flexicurity means relatively short notice paired with strong social provision, not free dismissal. For salaried employees (funktionærer), probation can be agreed for up to 3 months with 14 calendar days' employer notice. After that, Funktionærloven notice runs from 1 month to 6 months by service, always to month-end. After 1 year of service, dismissal needs reasonable justification or compensation of up to 1 to 6 months' salary can follow. Long-service severance of 1 or 3 months applies at 12 and 17 years.
Can Dryft Global legally employ my team in Denmark?
Yes. Dryft supports employment in Denmark through compliant local infrastructure. We issue the Funktionærloven or CBA contract, enrol ATP and Samlet Betaling, run eIndkomst and AM-bidrag withholding, accrue concurrent holiday and Store Bededag supplements, and administer notice and the optional 120-day sickness clause, while you direct the work.
Hiring routes compared
Here is how the three routes stack up on speed, presence, cover and risk.
| Factor | Direct entity (ApS) | Dryft Global EOR | Independent contractor |
|---|---|---|---|
| Speed to onboard | Weeks for ApS, bank and eIndkomst | About 1 to 2 weeks | 1 to 5 days, high misclassification risk |
| Local entity required | Yes, Danish ApS or A/S | No, employed through Dryft's local infrastructure | No, direct commercial agreement |
| ATP / eIndkomst | You enrol and file monthly | Fully managed through Dryft payroll | Worker self-files; you face holiday and ATP claims |
| Holiday and pension | You accrue 2.08 days/mo and CBA pension | Held and run by Dryft | Missing 12.5% feriegodtgørelse is a red flag |
| Permanent establishment risk | Direct Danish tax presence | Substantially mitigated for non-sales-closing roles | High if the contractor binds you |
| Termination exposure | You run Funktionærloven notice and justification | Managed by Dryft under Danish rules | Claims convert to salaried employment |
| Best fit | Sustained headcount and local contracting | Market testing and initial headcount | Discrete project work only |
What an employee costs in Denmark
Unlike France, Belgium or Sweden, Denmark does not load a large percentage social charge on the employer. Personal taxation (including the employee-paid 8% AM-bidrag) carries more of the welfare cost. Budget pension and holiday properly or your quote will be wrong.
| Component | Employer share | Notes |
|---|---|---|
| ATP (full-time) | DKK 189.35 / month | Two thirds of DKK 284.00 total; employee pays one third |
| Samlet Betaling funds (AUB, AES, Barsel.dk, AFU, etc.) | ~DKK 10k to 12.5k / year | Flat-rate quarterly billing |
| Occupational pension | ~8% to 12%+ of gross | Market / CBA standard for skilled professionals |
| Holiday supplement (ferietillæg) | Min 1.0% | For salaried staff on paid holiday |
| Store Bededag supplement | 0.45% of base | Paid with May and August runs typically |
| Holiday pay (hourly / non-salaried) | 12.5% to FerieKonto | Alternative to paid holiday salary continuation |
| Occupational injury insurance | ~DKK 1,500 to 6,000+/yr | Mandatory commercial cover |
| Statutory funds subtotal | Low flat fees | Before pension and holiday |
| Illustrative all-in | ~119% of base (DKK 750k example) | Guide worked example with 8% pension |
For an employee on DKK 750,000 gross with 8% employer pension, budget roughly DKK 894,000 all-in once funds, holiday supplement and Store Bededag are in. Ask us for a country-specific cost model with the applicable overenskomst applied.
Payroll and tax
Danish payroll runs monthly with eIndkomst reporting to Skattestyrelsen. Deduct the employee 8% labour market contribution (AM-bidrag), employee ATP share (DKK 94.65 for full-time) and income tax per the tax card. The krone is pegged to the euro under ERM II at roughly 7.46 DKK per EUR.
Statutory minimum wage
There is no statutory minimum wage. Pay floors are set entirely by collective agreements (overenskomster). A role outside any agreement has no legal wage floor, so the market rate is the practical constraint.
Working time
EU Working Time Directive limits apply, with CBA detail on overtime. Collective agreements often pay +50% for the first overtime hours and +100% thereafter, on weekends and on public holidays, or grant compensatory time off (afspadsering). Weekly rest is at least one full 24-hour day per seven-day period.
Leave and mandatory benefits
- Paid vacation (concurrent system). Employees earn 2.08 paid holiday days per month from 1 September to 31 August (25 days total). Days can be taken as accrued across a 16-month holiday-taking period. Main holiday: 3 consecutive weeks between 1 May and 30 September with 3 months' employer notice. Residual 2 weeks need 1 month's notice.
- Holiday pay mechanics. Salaried staff receive ordinary salary during holiday plus ferietillæg of at least 1.0%. Hourly staff accrue 12.5% feriegodtgørelse to FerieKonto.
- Store Bededag. After abolition of Great Prayer Day as a public holiday, salaried employees receive a 0.45% annual base-salary supplement.
- Public holidays. 10 official national public holidays. No automatic Monday replacement when a holiday falls on a weekend.
- Sick pay. Funktionærer receive 100% salary. Employer funds the first 30 calendar days; from day 31 the municipality pays capped sygedagpenge, with employer refusion if salary continues.
- Maternity / parental. Mother: 4 weeks pre-birth; shared parental leave includes earmarked quotas (commonly described as 32 weeks total split, with 9 weeks earmarked per parent in the standard employee model). Confirm current Barsel.dk and statutory quotas before contracting.
- Sixth holiday week. Feriefridage are not statutory under Ferieloven but are widely granted under CBAs and policy.
Termination and notice periods
For salaried employees under Funktionærloven, probation of up to 3 months may be agreed, with 14 calendar days' employer notice during probation so the employee departs on or before the final day of month three. Employer notice must be served in writing before month-end to take effect from the first day of the next month:
| Completed service | Employer notice | Employee notice |
|---|---|---|
| Probation (0 to 3 months) | 14 calendar days | Immediate / 0 days |
| Up to 5 months | 1 month to month-end | 1 month |
| 6 months to under 2 years 9 months | 3 months | 1 month |
| 2 years 9 months to under 5 years 8 months | 4 months | 1 month |
| 5 years 8 months to under 8 years 7 months | 5 months | 1 month |
| More than 8 years 7 months | 6 months | 1 month |
- Unfair dismissal. After 1 continuous year, dismissal needs reasonable enterprise or employee-related grounds; compensation can reach 1 to 6 months' salary.
- Statutory severance. 1 month's gross at 12 years' service; 3 months at 17 years.
- 120-day sickness clause. If agreed in the contract, employer may dismiss with 1 month's notice after 120 sick-pay days in any 12 months, if notice is served while the employee is still sick and immediately after the 120th day.
- Summary dismissal (bortvisning). Immediate termination only for gross breach (fraud, violence, gross insubordination).
- Collective dismissals. Thresholds by headcount (for example 10% in enterprises with 100 to 299 staff) trigger STAR consultation and waiting periods of at least 30 days.
Can I use independent contractors?
Only for genuinely independent specialists. If the person is subordinated, integrated into your team and economically dependent on you, Skattestyrelsen and the courts can reclassify the arrangement. Reclassification triggers holiday pay (12.5%), statutory holiday supplements, ATP and fund contributions, unwithheld AM-bidrag exposure and possible Funktionærloven severance claims. An EOR is the compliant alternative for anyone who works like an employee.
The legal framework in brief
Denmark is an EU and Schengen member outside the Eurozone, with the krone pegged under ERM II. Flexicurity pairs relatively easy exit rules with strong income support:
- Salaried Employees Act (Funktionærloven). Notice, severance, sickness and unfair dismissal for funktionærer.
- Holiday Act (Ferieloven). Concurrent holiday accrual (2.08 days/month), ferietillæg and FerieKonto.
- Overenskomster. Sector collective agreements on pay, pension, overtime and sixth-week leave.
- ATP / Samlet Betaling and Skattestyrelsen (eIndkomst). Fund contributions and PAYE reporting.
- Arbejdstilsynet and SIRI. Working environment and international recruitment.
- GDPR plus Databeskyttelsesloven. Employee data and monitoring limits.
Where the talent is
Denmark combines life sciences, fintech, maritime, food tech, clean energy and robotics talent, with among the highest English proficiency in the EU. Danish remains the language of many statutory notices and CBA processes. CET / CEST aligns with Central Europe.
| Region | Talent and industry concentration |
|---|---|
| Copenhagen | Life sciences, fintech, maritime HQs, professional services, startups |
| Aarhus | Food tech, clean energy, digital and university research |
| Odense | Robotics, automation, manufacturing tech |
| Aalborg | Engineering, energy, regional industry |
| Esbjerg | Offshore wind, energy logistics |
Denmark Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step. Built from Dryft's own onboarding checklist for Denmark.
- Step-by-step implementation checklist, from EOR vs ApS selection to first payroll
- ATP / Samlet Betaling enrolment and eIndkomst filing sequence
- Concurrent holiday (2.08 days/month) and ferietillæg 1.0% setup
- Store Bededag 0.45% supplement May/August payment calendar
- Market pension 8% to 12% benchmarking against overenskomst floors
- Funktionærloven probation (3 months) and 1-to-6-month notice table
- Optional 120-day sickness termination clause wording
- FerieKonto transfer and final settlement checklist
This guide is general information, not legal, tax or immigration advice. Danish employment, tax, fund contribution and collective-agreement rules change through statute, overenskomst rounds and court interpretation. Confirm current figures with a qualified adviser or with Dryft before acting. Last reviewed September 2026.
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