Explore Our Unmatched Features that Elevate Your Hiring
Denmark is a highly competitive and dynamic economy in Europe, known for its well-educated, skilled workforce. The country excels in sectors like technology, engineering, finance, and healthcare, making it an attractive destination for talent in these fields.
Denmark offers a high standard of living, a well-established legal framework for employee protection, and a business-friendly environment, making it an appealing location for international businesses. However, hiring in Denmark is governed by strict labor laws and regulations, especially regarding work permits for non-EU employees, employee benefits, and social security contributions. Employers must comply with these laws to avoid penalties and ensure a smooth onboarding process.
Facts & Stats
Denmark’s labor laws are designed to protect employees' rights and ensure fair working conditions. These laws are outlined in the Danish Civil Code and the Employment Contracts Act. They cover essential aspects such as working hours, wages, annual leave, employee benefits, and termination procedures. Employers must be aware of and comply with these regulations to ensure legal compliance.
The probation period in Denmark is typically up to 3 months. During this period, either the employer or employee can terminate the contract with minimal notice (usually 1-2 weeks). After the probation period, the employee is entitled to all benefits specified in their permanent contract.
Employees in Denmark are entitled to a minimum of 25 days of paid annual leave (5 weeks) for a 40-hour workweek. This is calculated as 4 times their weekly working hours. Additional leave can be granted based on company policies or sector-specific agreements.
The standard workweek in Denmark is 37 hours spread over 5 days. Overtime is compensated at 1.5 times the regular hourly rate (150%) for the first 2 hours. Any overtime worked on public holidays or rest days is paid at 2 times the regular rate (200%). Employers must maintain accurate records of overtime hours worked.
Denmark does not have a statutory minimum wage. Instead, wages are set through collective agreements within specific sectors. Employers must comply with these agreements, which set wage levels for various jobs and industries.
Denmark has a progressive tax system with high tax rates that fund the country’s welfare system and social security benefits, which provide comprehensive healthcare, pensions, and unemployment benefits to its citizens.
7.65%
Employees contribute wages towards social security and benefits.
7.65%
Employers contribute wages towards social security and Medicare.
10% to 55%
Individual tax rates range from 10% for lower incomes to 55% for the highest earners.
Employees contribute 5% of wages to pension funds through employer-sponsored plans.
In Denmark, termination of employment can occur through mutual agreement, dismissal, or voluntary resignation. Both employer and employee must follow specific legal procedures, including adhering to notice periods and severance pay requirements as outlined in the Danish Employment Contracts Act.
Employees in Denmark are entitled to a notice period based on their length of service:
- Less than 1 year of service: 1 month notice
- 1 to 5 years of service: 2 months notice
- Over 5 years of service: 3 months notice
If an employee is terminated without cause, they are entitled to severance pay, which is typically one month’s salary for each year of service.
Denmark observes several public holidays throughout the year, including:
- New Year’s Day (January 1)
- Labor Day (May 1)
- Christmas Day (December 25)
Frequently asked questions
What makes Iris helpful for hiring in Denmark?
Iris helps streamline the recruitment process by offering AI-powered sourcing, candidate screening, and seamless integration with local job boards in Denmark, significantly reducing time-to-hire.
Is it mandatory to hire Danish nationals?
No, it is not mandatory to hire Danish nationals. However, non-EU employees may require a work permit to be employed in Denmark.
How is severance pay calculated in Denmark?
Severance pay in Denmark is typically calculated as one month’s salary for each year of employment if the employee is terminated without cause.
Do employees in Denmark receive a pension?
Yes, employees in Denmark are generally entitled to a company pension plan, which may be mandatory under sector-specific agreements or collective bargaining.
What’s the official workweek in Denmark?
The official workweek in Denmark is 37 hours, usually spread over 5 days. Overtime is compensated accordingly with additional pay.
