How do you terminate an employee in Denmark in 2026?

These figures are the floors set by the Funktionærloven (Salaried Employees Act) §2 for salaried staff. Notice starts at 3 months once an employee passes 6 months, then climbs by one month at every third year of service, stopping at 6 months. Employer notice always runs to the end of a calendar month. A contract can offer more, never less.

Notice during probation

You can agree a trial period of up to 3 months. During that window, employer notice drops to 14 days, and the count must leave at least one full month of the trial to run. Hourly and collectively agreed staff who are not covered by the Salaried Employees Act follow their own collective agreement instead, which sets its own notice rules.

Paying out the notice

You can release a salaried employee from working the notice and pay it out as salary. The payment covers everything the employee would have earned across the notice window, including pension and holiday allowance, and it stays taxable through the ordinary withholding the Danish Customs and Tax Administration runs.

Denmark runs on the flexicurity model. Employers can adjust headcount with relative ease, and the law backs workers through unemployment support and active job help rather than heavy dismissal barriers. So a dismissal that follows the Salaried Employees Act on notice and rests on a real reason is normally valid.

Reasons that stand up

1. Business or operational need, such as restructuring, a closed role, or falling demand
2. Poor performance, where the employee was told and given a fair chance to improve
3. Misconduct, with serious breaches able to justify summary dismissal without notice
4. Capability, where long-term illness or incapacity stops the work being done

For salaried staff with at least one year of service, the dismissal must be reasonably justified by the conduct of the employee or the position of the business. If it is not, the employee can claim compensation for unreasonable dismissal under the Salaried Employees Act.

Reasons that are never allowed

You cannot dismiss someone for being pregnant or on parental leave, for union membership or activity, for raising a discrimination complaint, or for any protected characteristic such as race, religion, age, disability, or sexual orientation. These protections apply from day one under Danish anti-discrimination law and the Maternity and Parental Leave Act (Barselsloven), and the burden shifts to the employer to prove the dismissal was unrelated.

1. Confirm a genuine reason

   Anchor the dismissal to a real ground: business need, performance, misconduct, or capability. For staff past one year of service the reason must be reasonably justified, or the exit can become a compensation claim.

2. Check the protected list

   Make sure the reason has nothing to do with pregnancy, parental leave, union activity, or any protected characteristic. The burden falls on you to prove the dismissal was unrelated.

3. Calculate the notice

   Work out the salaried notice from completed service and run it to the end of a calendar month. Shorter notice applies during an agreed probation.

4. Check the severance marks

   Test continuous service against the long-service marks. A severance benefit is owed only at 12 and 17 years, paid on top of full notice.

5. Serve notice in writing

   Issue the notice letter, confirm the leaving date, and arrange whether the notice is worked or paid out. Settle holiday allowance and pension in the final payroll.

Denmark does not run a tenure-based severance formula the way many countries do. Under Funktionærloven §2a, a salaried employee dismissed by the employer earns a one-off fratrædelsesgodtgørelse (severance benefit) only at two long-service marks.

Statutory severance benefit

The benefit is paid on top of full notice and is owed only when the employer ends the employment. An employee who resigns does not earn it. Because the trigger sits at 12 and 17 years, most exits in practice involve no severance at all, just paid notice, accrued holiday allowance, and pension.

Holiday allowance on exit

All accrued holiday pay must be settled on termination. Danish staff build up paid holiday at 12.5% of salary under the Ferieloven (Holiday Act), which funds 5 weeks of leave a year. Any unpaid balance on the last working day is a cash settlement.

Probation and severance

Nobody let go during a trial period reaches the severance marks. The trial period runs to a maximum of 3 months, with employer notice of 14 days during it.

Denmark implements the EU Collective Redundancies Directive through its Lov om varsling i forbindelse med afskedigelser af større omfang (the Collective Redundancies Act). It bites when a set share of the workforce is dismissed inside a 30-day window. The exact headcount thresholds and consultation periods are not held in the figure cache used for this page, so the numbers are described qualitatively here rather than stated as fact.

The duty has two parts. First, you consult employee representatives early, sharing the reasons, the numbers, the selection method, and any way to reduce the count. Second, you notify the regional jobcentre, and the planned dismissals cannot take effect until a waiting period has passed. Skip either step and the affected employees can claim compensation on top of their notice.

What the consultation must cover

• The reasons for the planned redundancies
• The number and categories of staff affected
• The criteria used to select who is dismissed
• How any severance beyond the statutory marks will be calculated
• Steps that could avoid or soften the redundancies

A mutual exit is the cleanest way to end a Danish employment where both sides want to part. The agreement sets the end date, confirms the notice arrangement, and lists every payment the employee will receive. Because Denmark imposes no approval gate, a signed deal closes the matter quickly.

Typical components of a Denmark severance agreement:

• Notice pay, covering the salaried notice of 3 months or the contractual figure, whichever is longer
• Accrued holiday allowance, the full 12.5% balance not yet paid
• Statutory severance, where the employee has reached 12 or 17 years' service
• An agreed extra payment, where the employer wants to settle above the legal floor
• A waiver of further claims, releasing both sides once the sums are paid
• Reference wording, agreed in advance and attached

Final pay timing follows ordinary payroll. Notice salary and accrued holiday allowance are settled through the last payroll runs that cover the notice period. Sign the agreement before the last working day so there is no dispute over what is owed. Where a senior employee is on a long notice, the parties often agree garden leave, with the employee released from duties while staying on the books and on pay.

Real HR and legal experts handle your Denmark hires, from the first contract through every monthly payroll run and statutory deduction. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee, and employer cost passes through at cost, itemised on every invoice.

The split of responsibilities under EOR for Denmark terminations:

Denmark sets no minimum wage, so pay floors come from the relevant collective agreement, and Teamed checks each hire against the right one. The flexicurity model keeps most exits simple, but the long-service severance marks and the collective consultation duty still carry real risk if missed. Teamed tracks both on every leaver.

EOR, contractors, and entity employees all live on one platform. An employee hired through Teamed's Denmark network can graduate to your own Danish legal presence when headcount makes entity formation the right call, until it isn't. Run the Crossover Calculator to see when the model flips. Start from the Denmark hiring overview.

Key sources: Funktionærloven (Salaried Employees Act), Ferieloven (Holiday Act) guidance, and Beskaeftigelsesministeriet (Danish Ministry of Employment).