What do you need to know to hire in Denmark?

Denmark funds most welfare through income tax, not through heavy employer charges. The employer's two main on-costs are holiday allowance at 12.5% of salary under the Holiday Act, and the employer's ATP pension share of kr 198/month for a full-time employee. A handful of smaller statutory funds apply on top. There is no percentage social security charge like France or Germany.

Teamed's Denmark price is a starting rate, with zero FX in any currency pairing. No setup fees. No exit fees. Salaries, taxes, and benefits passed through at cost on every invoice.

The full breakdown, with the employer funds and worked examples, is in the cost guide.

Registering a Danish company means setting up at the Danish Business Authority, registering for payroll tax (eIndkomst) with the tax authority, and enrolling for ATP and the statutory funds. Setup takes weeks and brings ongoing monthly filings. An Employer of Record is faster and cheaper at low headcount. Teamed runs Danish payroll, contracts, and compliance from day one.

The crossover point depends on Danish salary levels and your local accounting costs. For most professional-services roles it lands around 5 to 8 employees. The EOR vs entity guide runs those numbers.

Most EOR providers won't tell you when you have crossed it. We do, and we help you move. You progress from contractor to EOR to your own Danish entity on one platform under Teamed's Graduation Model, with tenure preserved.

The 2024 personal tax reform reshaped the upper end of Danish income tax for 2026. Under the Personal Income Tax Act the new middle-bracket tax of 7.5% applies above DKK 641,200 of personal income after AM-bidrag, the top-bracket tax of 7.5% applies above DKK 777,900, and an additional top band of 5% now applies above DKK 2,592,700 for the first time. AM-bidrag stays at 8%, and from 2026 you pay it from the year you turn 18.

Great Prayer Day (Store Bededag) was abolished from 2024, leaving 10 days public holidays in 2026. The hiring and tax guides cover each current rule in detail.

Statutory paid holiday is 5 weeks a year, which is 25 days, under the Holiday Act. Employees accrue it as they work, funded by holiday allowance of 12.5% of salary. There are 10 days public holidays in 2026, observed alongside the leave.

Maternity leave is 4 weeks before the birth and 10 weeks after. Fathers and co-mothers get 2 weeks of paternity leave around the birth. Each parent then holds 32 weeks of parental leave, of which 11 weeks are earmarked and cannot pass to the other parent. The employer pays sickness benefit for the first 30 days of illness, capped at kr 5,085/week. The benefits guide covers each entitlement in full.

Danish payroll runs through AM-bidrag, the labour market contribution of 8% on all salary, deducted before income tax under the Labour Market Contributions Act. National income tax then starts at the bottom band of 12.01% above a personal allowance of kr 54,100/year, with municipal tax on top. The new upper bands run at 7.5%, 7.5%, and 5% for the highest earners.

On the employer side the main charge is the ATP pension, split into an employer share of kr 198/month and an employee share of kr 99/month, a total of kr 297/month for a full-time hire. Teamed handles every deduction and remittance to the Danish tax authority. The tax and payroll guide sets out every band and threshold.

For a salaried employee under the Salaried Employees Act, employer notice is 1 month in the first six months, then 3 months after six months, rising by one month every three years to a maximum of 6 months after nine years. During an agreed probation of up to 3 months, notice is just 14 days.

Statutory severance (fratrædelsesgodtgørelse) only kicks in at long service. The employer pays 1 month of salary after 12 years of unbroken service, and 3 months after 17 years. Most dismissals carry no severance, only notice. The termination guide runs the full process.

There is no national minimum wage to quote. Denmark sets pay floors through collective agreements per sector, not in law. So the right number depends on the union agreement that covers the role. Budget the market rate for the job, not a single legal figure.

Your employer on-costs are unusually light. Holiday allowance of 12.5% and a flat ATP pension of kr 198/month are the main charges. Denmark pays for its welfare through high income tax on the employee, with AM-bidrag of 8% taken first. The hiring guide and the tax guide both cover this in detail.