Hiring in Denmark: Employer Costs, Labor Laws and How to Hire
Danish employers pay mostly fixed contributions: ATP pension, AUB, Barsel.dk and FIB come to DKK 7,725 a year for a full-time, monthly-paid employee in 2026. The employee pays 8% AM-bidrag on all pay. On a DKK 600,000 salary, the employer's cost is DKK 616,425 a year, before AES and work injury insurance.
Hiring someone in Denmark? This guide covers what an employee costs, employer contributions, the labor rules that apply, pay without a statutory minimum wage, income tax, work permits and the ways a company outside Denmark can employ someone there.
Employer and employee contributions in Denmark, 2026
Key employment rules in Denmark
How to hire in Denmark
Hiring in Denmark comes down to two decisions: who you hire, and how you employ them.
- Find the person. Write the role, set the salary against Danish pay levels, then source and interview candidates. You can run the search yourself with a job post, or use a placement service that delivers a shortlist.
- Choose how to employ them. A Danish entity running payroll, an employer of record or a contractor agreement. Each option is explained below.
- Make the offer. The contract has to meet the rules in the employment table above. Check whether a collective agreement covers the role: in Denmark these set pay floors, pensions and many other terms.
Your options for employing someone in Denmark
- Danish entity: you register a company in Denmark, register as an employer, run payroll, withhold tax and AM-bidrag, and pay ATP and the other employer contributions yourself. It suits a team of several people in Denmark.
- Employer of record (EOR): a third-party provider becomes the legal employer and runs Danish payroll for a monthly fee per employee. Your company directs the work.
- Contractor: the person invoices you through their own business. The relationship has to be genuinely independent, or it can count as employment.
Euro Remote Talent does not employ people on your behalf. We handle the placement: we find and shortlist the candidate, and you employ them through the route that fits.
What an employee costs in Denmark
Danish employer contributions are mostly fixed amounts, not a percentage of pay. Take a salary of DKK 50,000 a month, or DKK 600,000 a year, for a full-time, monthly-paid employee. The employer pays:
- ATP pension, employer share: DKK 198.00 x 12 = DKK 2,376
- AUB, Barsel.dk and FIB: DKK 2,821 + DKK 2,200 + DKK 328 = DKK 5,349
- Holiday supplement: DKK 600,000 x 1% = DKK 6,000
- Great Prayer Day supplement: DKK 600,000 x 0.45% = DKK 2,700
The employer's cost is DKK 616,425 a year. Occupational disease insurance (AES) and work injury insurance come on top, at rates set by industry and insurer. Pension under a collective agreement also comes on top when the employer is bound by one. From the employee's pay, the employer withholds 8% AM-bidrag, or DKK 48,000, the employee's ATP share of DKK 1,188 a year, and income tax.
Minimum wage and pay
Denmark has no statutory minimum wage. Pay floors are set in collective agreements between unions and employers, sector by sector. Average monthly earnings were DKK 53,916 in 2025 and the median DKK 48,700, according to Statistics Denmark (Danmarks Statistik). These figures include pension contributions and bonus. See our average salary in Denmark page for pay by sector and occupation.
Income tax in Denmark
The employer withholds AM-bidrag and income tax from each salary payment, using the employee's tax card. The main rates for 2026:
| Income tax, 2026 | Rate | Applies to |
|---|---|---|
| Labor market contribution (AM-bidrag) | 8% | All pay, before income tax |
| Personal allowance | 0% | The first DKK 54,100 a year |
| Municipal tax | 25.0% on average | Taxable income above the personal allowance |
| Bottom-bracket tax | 12.01% | Income above the personal allowance |
| Middle-bracket tax | 7.5% | Personal income above DKK 641,200, after AM-bidrag |
| Top-bracket tax | 7.5% | Personal income above DKK 777,900, after AM-bidrag |
| Additional top-bracket tax | 5% | Personal income above DKK 2,592,700, after AM-bidrag |
Municipal tax goes to the municipality where the employee lives, and church members also pay church tax. The tax ceiling for personal income is 44.57% in 2026. Employees also get an employment allowance of 12.75% of earned income, up to DKK 63,300 in 2026.
Work permits
- EU, EEA and Swiss citizens: do not need a permit to work in Denmark and can start on arrival. For a stay over 3 months they apply for an EU residence document.
- Pay Limit Scheme: for applications from 1 January 2026, a job offer with an annual salary of at least DKK 552,000 qualifies, according to the Danish Agency for International Recruitment and Integration (SIRI).
Public holidays in 2027
Denmark has 10 public holidays in 2027, and 6 fall on a weekday. Great Prayer Day is no longer a holiday since 2024. See every date on our Denmark public holidays 2027 page.
How Euro Remote Talent can help
We do placement. We source, screen and interview remote professionals across Europe, then deliver a shortlist of 3 candidates within 21 days for a flat $6,500, or your deposit back. Prefer to run the search yourself? Post a job for $299 and reach candidates who want to work remotely.
See how placement works, post a job or book a 30-minute call. Browse remote jobs in Denmark to see who is hiring there now.
This is general information, not legal or tax advice. Rules change and collective agreements can set different terms. Confirm with a local accountant or lawyer before you hire.
Frequently asked questions
What does an employer pay on top of salary in Denmark?
Mostly fixed amounts: ATP pension (DKK 198.00 a month for full-time staff), AUB, Barsel.dk and FIB, DKK 7,725 a year in total in 2026. Monthly-paid staff also get a 1% holiday supplement and a 0.45% Great Prayer Day supplement. AES and work injury insurance vary by industry.
Is there a minimum wage in Denmark?
No. Denmark has no statutory minimum wage. Pay floors are set in collective agreements, sector by sector.
How much paid leave do employees get in Denmark?
5 weeks a year under the Holiday Act, earned at 2.08 days per month. Employees can take at least 3 weeks in a row between 1 May and 30 September.
How long is the notice period in Denmark?
For salaried employees, notice from the employer is 1 month in the first 6 months, then 3 months, rising by 1 month every 3 years of service to a maximum of 6 months. The employee gives 1 month.
Can a company outside Denmark hire someone there without a local entity?
Yes. The usual routes are an employer of record, a third-party provider that employs the person for you, or a genuine contractor agreement. Euro Remote Talent handles the placement: we find, screen and shortlist the person, and you choose the route.
Sources
- ATP Livslang Pension on borger.dk, ATP-satser for 2026 i privat virksomhed. Checked 3 Nov 2026.
- virk.dk, Satser for Samlet Betaling 2017 to 2026. Checked 3 Nov 2026.
- virk.dk, AUB for employers. Checked 3 Nov 2026.
- virk.dk, Barsel.dk, fully covered employers. Checked 3 Nov 2026.
- Business in Denmark, Financing contribution (FIB). Checked 3 Nov 2026.
- virk.dk, AES contribution. Checked 3 Nov 2026.
- Skattestyrelsen, Hvad er am-bidrag?. Checked 3 Nov 2026.
- Skattestyrelsen, Tax rates. Checked 3 Nov 2026.
- Skattestyrelsen, Bundskat, mellemskat, topskat og toptopskat. Checked 3 Nov 2026.
- Skatte- og Vækstministeriet, Kommuneskatter: gennemsnitsprocenten i 2026. Checked 3 Nov 2026.
- Retsinformation, Funktionærloven. Checked 3 Nov 2026.
- Retsinformation, Ferieloven. Checked 3 Nov 2026.
- Retsinformation, Arbejdstidsloven. Checked 3 Nov 2026.
- Retsinformation, Act on the abolition of Great Prayer Day as a holiday. Checked 3 Nov 2026.
- Danmarks Statistik, Månedslønnen var i gennemsnit 53.916 kr. i 2025. Checked 3 Nov 2026.
- SIRI on nyidanmark.dk, The Pay Limit Scheme's minimum amount. Checked 3 Nov 2026.
- SIRI on nyidanmark.dk, EU employee. Checked 3 Nov 2026.
