An Overview of Employing in Denmark
Danish Kroner (DKK)
Employees should expect to receive the main part of their remuneration as a fixed salary.
This will typically be paid on the last working day of the month, or on a fixed day as per the contract of employment.
Social security in Denmark is largely financed by state taxes. All employees working in Denmark who are fully tax liable to Denmark will be mandatory members of the Danish social security scheme and are obliged to make social security contributions (ATP).
Employers are expected to make contributions per employee. An exemption may be obtained in the case of foreign workers if there is a totalization agreement in place between Denmark and the home country/jurisdiction.
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Denmark provides public healthcare to citizens and residents, largely funded through tax-payer contributions.
Contractual Provisions
Standard working hours are 37 hours weekly. The maximum working hours per week should be no more than 48 hours (calculated on average, over a four-month period) including overtime.
A probationary period of three months is standard practice in Denmark.
Many people working in Denmark are employed on the basis of the Danish Salaried Employees Act (funktionærloven). Funktionærloven, like collective bargaining agreements, includes laws concerning the employment relationship with regard to, among other things, termination, sickness, parental leave, and competition and customer clauses.
Employees will usually expect to be compensated for any time worked in excess of 37 hours per week. It may be possible to include an all-inclusive compensation to cover incidental overtime. Our Contracts team will be able to advise on this during the contract drafting stage.
All employees over the age of 18 years old are entitled to:
- A daily rest period of at least 11 consecutive hours.
- A break during any working day lasting more than six hours. The length of the break depends on its purpose.
- One rest day (24 hours) per week that must be in connection with a daily rest period. No more than six days are allowed between two rest days.
A night worker may not work more than 8 hours per 24-hour period on average.
An employee earns the right to 2.08 days of paid holiday for every month they work in the course of a year from 1 September – 31 August the following year. This period is called the accrual year.
Vacation days may then be spent in the concurrent holiday period from 1 September to 31 December the following year (16 months). The new Holiday Act also permits employees to take paid holiday provided that an agreement is made between the employer and employee.
Employees either receive their regular salary during their holiday or they can receive holiday pay, corresponding to 12.5 per cent of their salary in the accrual year and a holiday supplement of 1 per cent.