Did You Know?

Get salary data for any country



Estimated reading: 4 minutes 0 views

The labour market in Denmark

Each labour market has some peculiarities. It may be tricky for foreigners to fully understand the payment methods, the taxes and other benefits related to them. In TalentUp, we are starting a series of different blog articles, one for each country. This article analyses the labour market in Denmark.

Even if the national currency is the Danish Krone (DKK), the whole article is in EUR to compare easily across countries and exchange rates.

General data about the Danish labour market

Danish minimum wage and maximum working hours disclosure. Data for January 2024. Source: https://www.papayaglobal.com/countrypedia/country/denmark/

Payroll taxes in Denmark

Social security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.

Share of contingencies applied to the gross salary. Data source:

Example of net salary in Denmark

As a reference, we use the average salary of a software engineer. In Denmark, on average, software engineers earn annually 67,000€.

From gross to net salary of a software engineer in Denmark.

The employer contributes 2,269.53€ to social security, and the employee contributes 48,888.2€.

After paying the income tax, the employee has a net salary of 18,111.8€, coming from a gross salary of 67,000€. 

Unemployment regulation in Denmark

The Danish Salaried Employees Act specifies the notice of termination that must be given by the employer to terminate employment.

Notice periods in Danish contracts. Data source:

The employee must give notice within 1 month, regardless of the length of employment.

In general, probationary periods are up to three months. The probationary period for fixed-term contracts cannot be more than one-quarter of their duration.

Different kinds of leaves in Denmark

In Denmark, they have 25 working days of holidays. Holidays are divided into 3 weeks, which are called the main holiday, and an additional 2 weeks, which are called residual holidays. Workers must use at least 20 days per year; any remaining days can be carried over to the following year.

They have 12 days of public holidays.

Salaried employees receive their full salary during sick leave:

  • First 30 days are paid by the employer.
  • For continuous employment of at least 8 weeks and 74 hours worked.
  • After, the municipality covers if conditions are met, like 240 hours worked in 6 months, with at least 40 hours in 5 of those months.

Sickness benefits are calculated from hourly pay and weekly hours.

In Denmark, individuals aged 18 to 30 can be randomly selected for the national military or civil service. Both men and women can volunteer as well. This service typically lasts for four months. Employers must provide leave for national service, and employees are safeguarded against dismissal for requesting or taking such leave.

Paid parental leave

Maternity leave lasts 18 weeks total, starting 4 weeks before the due date, with 2 weeks being mandatory. Employees meeting statutory eligibility get a 50% salary from 4 weeks before expected birth until 14 weeks after actual birth.

Fathers can take two weeks during the mother’s 14-week maternity leave. Employer payment isn’t legally required but is common under agreements.

After the initial 14 weeks of maternity leave, each parent can take up to 32 weeks, extendable but affecting their monthly allowance. One parent can defer 8–13 weeks before the child turns one. Adoptive parents have equal leave rights.

Other common Danish benefits

Top 5 benefits offered by Danish companies. Datasource: TalentUp’s database.

How to employ a Danish worker

To hire employees in Denmark, you must first obtain legal standing as a business and an employer. This implies that you will have to go through a few processes.

You will need the following aspects:

  • Organizational structure;
  • Registration as a DBA;
  • Registration with the IRS;
  • Bank account and share capital;
  • Documents;
  • Space for work;
  • Insurance for work-related injuries.