🇩🇰 Hiring in Denmark

💡 Everything you need to know to hire and manage employees in Denmark through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 3-5 business days between submitting a new hire and their start date, one of the fastest lead times of any country. Toku completes the tax authority registration one business day before the start date; your new hire just needs to sign the employment agreement.

Submit the new hire through the Toku platform for the employment agreement, statutory registrations and payroll setup. See Onboard Contributors as a Client Admin in Toku for the steps. Toku will confirm the expected onboarding timing for your hire.

Employer Costs

Denmark is one of the lowest-cost EU countries for employer contributions: they are mostly flat annual amounts rather than percentages of salary.

Total contributions typically land between DKK 8,000 and DKK 15,000 per full-time employee per year. As a rule of thumb, total cost of employment is roughly 101-103% of gross salary. There is no mandatory 13th month salary. If you offer an occupational pension (very common in Denmark, see Benefits below), budget for that separately.

Employees pay an 8% labour market contribution (AM-bidrag) plus progressive income tax (municipal plus national brackets, with a combined marginal rate of up to about 55.9%). These are withheld from gross salary, not paid on top. Toku calculates and remits all of the above.

Compensation & Payroll

ℹ️ Stablecoin payments are not supported in Denmark at this time.

Toku runs one payroll per month in Denmark, and employees receive a payslip each cycle showing gross salary, tax, ATP, pension contributions, and net pay. Salaries are paid in DKK to the employee's NemKonto.

Denmark has no statutory minimum wage; pay floors come from collective agreements and typically range from about DKK 130 to DKK 145 per hour depending on industry and experience. There is no 13th month salary. Salaried employees receive their full salary while on holiday; where holiday pay applies instead, it is funded at 12.5% of gross salary.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire, with written terms provided within the statutory deadlines from the start date.
• Indefinite-term employment is the default. Fixed-term contracts generally may not exceed three renewals or three years without objective justification.
• Most professional hires are salaried employees (funktionaerer) under the Salaried Employees Act, which provides structured notice, severance, and sick pay protections.
• Probation is 3 months under Toku's employment agreement, which is also the statutory maximum for salaried employees. During probation, either party may terminate with 14 days' notice.

Working Hours

Denmark has no statutory maximum working week; the standard under most collective agreements is 37 hours, Monday to Friday. Average weekly time including overtime may not exceed 48 hours over a four-month period, and employees are entitled to 11 consecutive hours of daily rest and 24 hours of weekly rest.

Overtime rates are set by agreement rather than statute; typical collective agreement rates are 150% for the first three weekday overtime hours and 200% after that. For managerial and senior roles it is common to agree that overtime is included in the salary.

Leave Entitlements

The Danish leave year runs September 1 to August 31, and leave is accrued and used concurrently. Parental leave benefits are paid by the municipality, and the maternity fund (included in employer costs above) reimburses part of any salary paid during leave.

Public Holidays (2026)

Denmark observes 11 public holidays in 2026. Holidays falling on a weekend are not moved. Constitution Day (June 5) is officially a half-day, though most employers grant the full day; May 1 and December 24 are not statutory holidays but are widely given as days off under collective agreements and company practice.

Benefits

Danish employees are covered by Denmark's universal, tax-funded public healthcare system, and the statutory schemes (the ATP supplementary pension, occupational injury insurance and maternity fund coverage) run through payroll as shown in Employer Costs above. On top of this, Toku offers a supplemental occupational pension with Danica Pension and fully sponsored international health coverage through Remote Health by SafetyWing. Because healthcare is universal and tax-funded, no employer health contribution is needed.

Benefits at a Glance

Statutory Benefits

Danish employees are covered by Denmark's universal, tax-funded public healthcare system, and statutory social contributions flow through payroll. The state pension is funded through general taxation. Unemployment insurance is voluntary and arranged by employees through A-kasser. Unlike many countries, Denmark has no broad legal requirement for employers to provide a private pension, but occupational pensions are the strong market norm, and most professional employees will expect one.

Supplemental Pension: Danica Pension

Toku offers a supplemental occupational pension plan with Danica Pension. Contributions are processed monthly through payroll. The plan is currently a small-group arrangement that can be extended to new Denmark-based hires; contribution rates and plan terms are confirmed per case with the benefits team.

International Health Coverage: Remote Health

Toku offers fully sponsored international health coverage through Remote Health by SafetyWing (Worldwide plan). For coverage, costs and enrollment, see 🌍 Global Coverage: Remote Health by SafetyWing. For the employee-facing detail, see Remote Health, Your Global Insurance Plan.

Costs & Who Pays

Pension contribution levels (employer and employee shares) are agreed when an employee is enrolled. Contact benefits@toku.com when planning a Denmark hire to confirm the pension setup and expected cost. Remote Health premiums are billed to you; see the Remote Health page above for current rates.

What You Need to Know About Benefits

• There is no legal requirement to offer a private pension in Denmark, but most professional employees will expect one, so factor it into your offer.
• Danica pension terms are confirmed per case: contact benefits@toku.com before you make an offer so the setup and cost are clear.
• Pension contributions are processed monthly through payroll.

Common Extras

The most significant common extra in Denmark is an occupational pension plan, typically 8-15% of salary with the employer paying about two-thirds; supplementary health insurance, group life insurance, and commuter benefits are also widespread. Toku can advise on the cost impact of any of these.

Ending Employment

Denmark's flexicurity model makes termination comparatively straightforward: no specific grounds are required for salaried employees, but a dismissal must not be unreasonable, and employees with a year or more of service can claim compensation (typically 1-6 months' salary) if it is. Involve Toku early so the process and documentation are handled correctly. For the process, see How to Terminate an Employee or Contractor.

Employer notice for salaried employees (given to the end of a calendar month):

Statutory severance is modest and only applies to long-tenured salaried employees dismissed by the employer: one month's salary after 12 years of service and three months after 17 years. Toku will confirm the full exit cost for you before anything is signed.

Annual Leave at Termination

This section describes statutory annual leave. Any additional contractual or company-provided leave above the statutory minimum may follow different carryover, expiry, or payout rules under the employee's agreement or applicable policy, subject to local law.

Statutory leave termination payout: Generally settled through the Danish holiday-pay system. Earned holiday has monetary value, and termination typically requires settlement/reporting of outstanding holiday entitlement.

Statutory carryover / look-back: Treatment depends on the holiday year, the holiday-taking period, and whether the entitlement is ordinary, transferred, or otherwise saved.

Admin responsibility: Keep holiday records current and do not manually delete balances. Use the Danish payroll/holiday-pay process to determine what remains payable or transferable.

Important exceptions: Collective agreements can affect the mechanics. Toku should reconcile outstanding holiday allowance before final termination amounts are communicated.

See the Annual Leave / PTO Carryover & Termination Payout Guide for the cross-country framework.

Hiring Someone from Overseas?

EU and EEA citizens can work in Denmark without a permit. Non-EU nationals typically come through the Pay Limit Scheme (for salaries above DKK 552,000 per year in 2026), the Positive List for shortage occupations, or the EU Blue Card, with processing of roughly 1-3 months (as fast as 10-20 business days under the Fast-Track Scheme for certified employers). Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last updated November 5, 2026 (onboarding link only). Last verified October 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.