Denmark relies on the "Danish model": most pay and working conditions are set by collective agreements rather than by statute, with laws such as the Holiday Act and the Salaried Employees Act setting the floor. Here is what employers need to know about leave, pay, tax and ending employment.
The Holiday Act gives every employee paid holiday that is earned month by month and can be taken in the same year it is earned. Collective agreements and contracts often add more, such as extra holiday days.
Earned at 2.08 days for each month of employment (5 weeks a year). Salaried employees on full pay also receive a 1% holiday supplement.
The employer pays for the first 30 days of absence. After that the municipality pays sickness benefit. Salaried employees normally keep full pay throughout.
With state parental benefit after the birth. 11 weeks are earmarked for each parent and cannot be transferred.
The mother may start leave 4 weeks before the expected birth, on top of her 24 weeks after it.
For children born since 2 August 2022, each parent has 24 weeks of leave with parental benefit after the birth. Of these, 11 weeks are reserved for each parent and 13 weeks can be transferred to the other parent. The mother must take the first 2 weeks after the birth, and the father or co-parent can take 2 weeks together with the mother during the first 10 weeks. Many collective agreements top the state benefit up to full salary for part of the leave.
Set up Danish holiday, extra holiday days and parental leave in IceHrm as separate leave types, each with its own monthly accrual, carry forward and approval rules. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
Denmark has no statutory minimum wage. Minimum pay, normal hours and overtime rates are set by the collective agreement that covers the workplace, or by the individual contract where there is none.
Pay floors come from sector collective agreements, which cover most of the labour market.
The standard in most collective agreements, usually Monday to Friday.
Including overtime, averaged over a reference period, under the rules implementing the EU Working Time Directive.
There is no statutory overtime premium. Overtime pay or time off in lieu is set by the collective agreement or the employment contract. Employees must also get at least 11 hours of rest in every 24 hours and one day off each week.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so agreement rates and overtime reflect what was actually worked. Time & attendance →
Danish income tax is made up of several layers. Employers deduct the 8% labour market contribution and then withhold tax each pay run using the employee’s electronic tax card (skattekort), which already reflects their personal allowance of DKK 54,100 (2026) and other deductions.
| Tax | Rate | Applies to |
|---|---|---|
| Labour market contribution (AM-bidrag) | 8% | Gross salary, before any other tax |
| Municipal tax | ~25% (average) | Taxable income above the personal allowance |
| Bottom tax (bundskat) | 12.01% | Personal income above the personal allowance |
| Middle tax (mellemskat) | 7.5% | Personal income above DKK 641,200 |
| Top tax (topskat) | 7.5% | Personal income above DKK 777,900 |
| Top-top tax (toptopskat) | 5% | Personal income above DKK 2,592,700 |
The middle and top-top tax bands were introduced from 2026 by the Danish tax reform. A tax ceiling limits the combined marginal rate on the highest incomes.
Employer social costs in Denmark are low by European standards. Most social security is financed through general taxes, so employers mainly pay fixed annual contributions rather than a percentage of salary.
A year for a full-time employee in 2026. The employee pays DKK 1,188, deducted from pay. Lower amounts apply for fewer hours.
Annual contributions per full-time employee to the maternity equalisation scheme (Barsel.dk), AUB, AES and similar funds.
Compulsory. Premiums depend on the type of work and the insurer.
Labour market pensions are not required by law but are part of most collective agreements and many individual contracts. A common split is around two thirds paid by the employer and one third by the employee, so check the agreement that applies.
Build Danish pay the way you already structure it, with your own salary components, deductions and formula columns, such as ATP and occupational pension columns. Want to know how well IceHrm handles payroll calculations for Denmark? Contact us or see Payroll →
Danish employers have relatively flexible dismissal rules, but a dismissal must be reasonably justified by the employee’s conduct or the needs of the business. Salaried employees (funktionærer) are protected by the Salaried Employees Act; other employees’ notice and protection come from collective agreements.
| Length of employment when notice is given | Notice |
|---|---|
| Less than 5 months | 1 month |
| 5 months, less than 2 years 9 months | 3 months |
| 2 years 9 months, less than 5 years 8 months | 4 months |
| 5 years 8 months, less than 8 years 7 months | 5 months |
| 8 years 7 months or more | 6 months |
| Continuous employment | Severance |
|---|---|
| 12 years | 1 month’s salary |
| 15 years | 2 months’ salary |
| 18 years | 3 months’ salary |
A salaried employee with at least 1 year of service who is unfairly dismissed can claim compensation, and collective redundancies trigger information and consultation duties. Earned but untaken holiday is settled when employment ends.
Denmark’s public holidays are mostly Christian holidays. Great Prayer Day (Store Bededag) was abolished as a public holiday from 2024.
Constitution Day (5 June), Christmas Eve and New Year’s Eve are not public holidays, but many collective agreements and employers give all or part of these days off.
Leave groups give each office its own holiday calendar, so your Danish team gets the right days off, including any extra days from your collective agreement, while staff in other countries follow theirs. Holiday calendars →
Under the Employment Terms Act (ansættelsesbevisloven), employers must give employees who work more than an average of 3 hours a week written information about the essential terms of their employment.
Probation is optional. For salaried employees it can last up to 3 months, with 14 days’ notice during that time. Fixed-term contracts are allowed, but renewing them repeatedly needs objective reasons, otherwise the employee may be treated as permanent.
Send contracts for e-signing within the 7-day deadline, store them on the employee’s record, and track onboarding with task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Denmark, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Denmark? Talk to us.
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