Denmark

Contract Types

In Denmark contracts can be Fixed Term or Indefinite. Fixed Term contracts in practice have a maximum duration of 2 years, and whilst there is no legal limit to the number of renewals, more than two is unusual. Fixed term contracts terminate automatically on termination. Most contracts are governed by Collective Bargaining Agreements (CBAs).

Probation           

The maximum probation period is 3 months for those on indefinite contracts.

Working Hours

Normal working hours are 37 hours over a 5-day week.

Overtime          

Hours in excess of 37 per week can be compensated via 150 to 200% of salary or time off in lieu. The contract or CBA should set out overtime conditions.

Other Financial

There is no 13th month salary requirement in Denmark, but bonuses are common.

Tax rates valid for: 2024               

Corporation Tax: 22%                    

Consumption Tax: 25%                 

Employers’ Social Security: In total c. DKK 12,000 pa depending on industry                         

Employees’ Contributions: In total c. 15,000 pa                 

Income Tax Rates                           

• Bottom Rate – 46,201 – 513,999 DKK – 8%
• Top Rate – Over 513,999 – 12.14%
• Average municipal tax – 24.954% – 15%

Notice 

The notice period will be set out in the contract or CBA and is 1 month for employees. Notice for employers is dependent on service:

• Up to 6 months – 1 month
• 6 months to 2 years 9 months – 3 months
• 2 years 9 months to 5 years 8 months – 4 months
• 5 years 8 months to 8 years 7 months – 5 months
• Over 8 years 7 months – 6 months

The notice periods above are full calendar months; for example if notice is given on the 2nd of February the last day of work will be 31st March. Payment in lieu of notice is subject to agreement and the employment contract.

During Probation            

14 days’ notice is required by the employer during probation and the end of this notice must fall within the probationary period. The employee does not have to give notice during the probationary period, but some notice can be stated in the contract.

Dismissal

Employers should always have proper grounds for dismissal and be able to provide evidence, for example, that they have informed the employee and given them a chance to improve. For redundancy the employer must negotiate with the employee or his representative and inform the relevant Regional Labour Market Council.

Severance

This applies to those who have been employed for more than 12 years.  The amount payable is dependent on whether there is a CBA in place. With a standard CBA then 1 month is due for those aged 40, rising by 1 month for each 5 years of age to 6 months for those aged 60. Without a CBA employees with over 12 years’ service are entitled to 1 month’s salary and those with over 17 years’ service are entitled to 3 months’ salary.  In cases of redundancy those who are not entitled to the above benefits should be paid 1 month’s salary if they do not have a new position by the end of their employment.

Paid Public Holidays: 8

New Year’s Day – 1st January

No Day Given in Lieu

Maundy Thursday – 28th March

Day Given in Lieu – N/A

Good Friday – 29th March

Day Given in Lieu – N/A

Easter Monday – 1st April

Day Given in Lieu – N/A

Ascension Day (Thursday 40 days after Easter) – 9th May

Day Given in Lieu – N/A

Whit Monday – 20th May

Day Given in Lieu – N/A

Christmas Day – 25th December

No Day Given in Lieu

Boxing Day – 26th December

No Day Given in Lieu

Comment: Public holidays falling on Sunday not included.

Paid legal entitlement (working days)

In Denmark, the standard annual leave entitlement is 25 days, accrued at a rate of 2.08 days per month worked, though the CBA may provide for more. Often employers will offer 30 days’ leave. 

Carry over permitted    

The holiday year runs from 1 September and leave may be taken up to 31 December of the following year, thus over 16 months. By agreement it can be carried over further.

Payment in lieu allowed              

Any unused leave on 31 December over 20 days can be paid out by 31 March.

If an employee is prevented from taking holiday, for example due to sickness, then the holiday can be paid out after the expiry of the second holiday taking period.

Holiday Allowance         

A daily vacation premium of 1% of the employee’s monthly salary is paid in addition to salary before the holiday is taken.

Some companies also pay holiday allowance which is 12.5% of the employee’s gross annual salary; this is only paid if the employee is not paid their usual salary during their vacation and is claimed by the employee via a government portal.

Sick

Employees are entitled to full pay and the employer applies for sick pay to the government after the first 30 days of illness.

Maternity

New mothers are entitled to pregnancy leave of 4 weeks before the birth and maternity leave of 10 weeks after the birth. Pay will be in accordance with the contract and the CBA in place. Government funded benefit is available to those who do not get paid and this is the maximum unemployment benefit (DKK 4,550 per week before tax).

To qualify for maternity or parental leave the employee must have worked a minimum of 40 hours per month for at least 3 months.

For multiple births an additional 13 weeks of leave is available, this also applies to adopting parents.

Paternity            

New fathers take 10 days compulsory leave immediately following the birth.

Parental Leave 

Additionally, each parent is entitled to 32 weeks of parental leave. This can be extended for working parents by 8 or 14 weeks.

Benefits are paid for 24 weeks only.  Of these 24 weeks 11 cannot be transferred to the other parent and must be taken during the first year; the remaining 13 weeks can be transferred and are available until the child is 9 years of age.

Adopting parents are entitled to the same leave and can also take leave before receiving the child, depending on where they are adopting from.

Other   

Employment contracts and the CBA will often provide for other types of leave. Bereavement, carer and family illness are commonly given and usually unpaid. Employees must also be given leave for military service which extends for 4 months, and they are protected from dismissal re requesting or taking such leave.

Medical Insurance

The majority of employers offer private medical insurance to supplement Denmark’s public health system. This provides access to a wider range of providers and shorter waiting times.

Pension                              

Supplementary pensions are commonly offered with a typical employer contribution of 12% of base salary.