Good to know
Local Currency: Danish Krone (DKK)
Minimum Salary: There is no national minimum wage in Denmark. Wages are generally set by collective agreements.
Wage rates set by collective agreements vary according to age (different wage rates for workers over and under 18), experience (higher wages for more experienced workers) and difficulty of work.
Salary Payment: monthly, daily, hourly and at piece rates.
Salary Calculation: gross to net
Legal Working Hours: 37 hours/week
About Denmark
Denmark is a Scandinavian country that includes the Jutland Peninsula and many islands, a total area of 2,210,579 km². With a generous temperate climate due to its southern location compared to the rest of Scandinavia.
It has become one of the world leaders in developing many experiments in urban ecology, for example, the Ecovillage network. The goal of an ecovillage is to become more socially and ecologically sustainable than other communities.
Like the rest of Europe, Denmark is a post-industrial economy. Given the small size of its domestic market, the Danish economy depends heavily on foreign trade. Denmark exports its products afloat thanks to a dynamic, specialized industry and its maritime and river transport, which are among the most important in the world. Several Danish companies have gained worldwide notoriety in specialized niches with steady growth.
Ready to Benefit from Danish HR & Payroll Experts?
Social Security System in Denmark
Denmark’s social security system is primarily funded through general taxation, rather than direct contributions from employers and employees, as seen in some other countries. However, there are very limited social security contributions for employees and employers.
Danish social contributions cover all risks, including but not limited to pension, education, occupational injuries, and the Danish labour market fund.
As part of the employer registration, the Danish entity must register for payment and contribute to social security on behalf of employees covered by the social security legislation in Denmark.
Social security reporting is part of the monthly payroll reporting and is managed by the social security authorities called ATP. ATP stands for “Arbejdsmarkedets Tillægspension,” which translates to the Labour Market Supplementary Pension.
The Danish unemployment insurance system is a voluntary insurance scheme. This means that you are not automatically insured against unemployment when working in Denmark.
Administrative Organization
- Danish Tax Agency (SKAT) (Skattestyrelsen)
Responsible for tax collection and administration.
- Labour Market Supplementary Pension (ATP) (Arbejdsmarkedets Tillægspension)
Manages the mandatory supplementary pension scheme. Social security reporting is part of the monthly payroll reporting and is managed by the social security authorities called ATP. ATP Livslang Pension (Lifelong Pension) is a guaranteed pension product, and members are guaranteed a lifelong and monthly payment from ATP for as long as they live. - Danish Labour Market Insurance (AES) (arbejdsmarkedets erhvervssikring)
Provide insurance coverage for workplace accidents.
Income Tax in Denmark
Danish income tax is a dual-level tax system:
- National (state) income tax is applied
- Municipal Taxes (Rates vary between 23.4% and 26.30% based on the state)
| Taxable income (DKK) | Minimum National income tax rate | Municipal tax rate |
| Up to 50,500 | 0% | Approximately 23%–27% |
| 50,501 to 588,900 | 12% | Approximately 23%–27% |
| Above 588,901 | 15% | Approximately 23%–27% |
Note:
All working individuals in Denmark are obligated to pay labour market contributions (arbejdsmarkedsbidrag), a tax levied at a rate of 8%.
The base for the top tax for a single person is personal income plus positive net capital income. Top tax is 15% of the top tax base exceeding DKK 611,800 (2025) after a deduction of 8% labour market tax.
Social Contributions in Denmark
The Danish Social Security System consists of services and benefits that provide economic security such as health insurance, family benefits, pension, unemployment benefits, daily sick pay, ATP (Danish Labour market supplementary pension), and industrial injury insurance.
As discussed before, Denmark’s social security system stands out by being primarily funded through general taxation, unlike many other countries where employers and employees make direct contributions; that is why social security contributions in Denmark are quite low compared to other European countries.
As an employer, you must report ATP contributions with an A-rate; contributions are not calculated as a percentage of the employee’s salary or wages but consist of fixed amounts that must be paid by both employee and employer on a quarterly basis.
In Denmark, the ATP (Labour Market Supplementary Pension) contributions are shared between the employer and the employee. The standard rates are as follows:
- Employer: Pays two-thirds of the total ATP contribution.
- Employee: Pays one-third of the total ATP contribution.
ATP A-contribution rates for employees paid monthly in the private sector.
| Employees paid monthly (Work hours per month) | Employee’s share (1/3) | Employer’s share (2/3) | Total A-contribution DKK |
| At least 117 timer (full-time) | 99 | 198,00 | 297,00 |
| At least 78 – under 117 (2/3 working time) | 66,00 | 132,00 | 198,00 |
| At least 39 – under 78 (1/3 working time) | 33,00 | 66,00 | 99,00 |
| Less than 39 hours | 0,00 | 0,00 | 0,00 |
Key Additional Contributions in Denmark:
Additional contributions like AUB, AES, FIB, the Maternity Leave Fund, Holiday Allowance Payments, and AFU – these are additional funds often defined by collective agreements or sector-specific statutory requirements.
- AUB is an education fund that is financed by employers, also known as the reimbursement system. The contribution is DKK 3,590.00 DKK per year per employee.
- AES are contributions from employers towards occupational injury and disease. The contributions range from DKK 164 to 8,425 per year, depending on the industry.
- FIB (Finansieringsbidrag): is an employer contribution in Denmark that helps finance ATP for those employees who are not actively working due to sickness, maternity/paternity leave, or unemployment. For every amount paid to ATP that is equal to a full-rate ATP contribution (DKK 284.00 per month), you must also pay DKK 123.25 per quarter (2023) in FIB contribution.
- Maternity Leave Fund (Barselsfond), the objective is to compensate companies for the cost of maternity/paternity leave. In 2025 the contribution rate for Barsel.dk is DKK 1,500.00 per year (DKK 387.50 per quarter) for a full-time employee paid monthly.
- Holiday Allowance Payments (Feriepenge): As an employee in Denmark, you are entitled to five weeks of paid holiday per year. As part of the employer’s responsibilities, the employer calculates your holiday allowance, but in general, you accrue 12.5% of your salary in holiday allowance. This complies with 2.08 days of holiday for every month you are employed.
- AFU: The Danish Labour Market Fund for Posted Workers ensures employees posted to Denmark receive wages owing to them. As a foreign employer, you must pay a contribution to the Danish Labour Market Fund for Posted Workers.
Further payments, Danish employers are required to obtain occupational injury insurance from a private insurer. The annual premium varies depending on the number of employees and the nature of the business
Our HR & Payroll Experts are Ready to Help
Payroll and HR are different in each country and to each business. Trust one of our local experts to ensure your company’s compliance in Denmark.
Our Payroll and HR services in Denmark
- Implementation and testing of the software
- An understanding of your individual business payroll processes
- Online payslips & payments
- A dedicated payroll expert
- Data entry & processing
- Payslip distribution
- Personnel & document production
- Legislation compliance
- Highly secure
HR & Payroll in Denmark
HR & Payroll in Denmark
Good to know
Local Currency: Danish Krone (DKK)
Minimum Salary: There is no national minimum wage in Denmark. Wages are generally set by collective agreements.
Wage rates set by collective agreements vary according to age (different wage rates for workers over and under 18), experience (higher wages for more experienced workers) and difficulty of work.
Salary Payment: monthly, daily, hourly and at piece rates.
Salary Calculation: gross to net
Legal Working Hours: 37 hours/week
Ready to Benefit from Danish HR & Payroll Experts?
About Denmark
Denmark is a Scandinavian country that includes the Jutland Peninsula and many islands, a total area of 2 210 579 km2. With a generous temperate climate due to its southern location compared to the rest of Scandinavia.
It has become one of the world leaders in developing many experiments in urban ecology for example the Ecovillage network. The goal of an ecovillage is to become more socially and ecologically sustainable than other communities.
Like the rest of Europe, Denmark is a post-industrial economy. Given the small size of its domestic market, the Danish economy depends heavily on foreign trade. Denmark exports its products afloat thanks to a dynamic specialized industry and its maritime and river transport, which are among the most important in the world. Several Danish companies have gained worldwide notoriety in specialized niches with steady growth.
Social Security in Denmark
Danish social protection covers all risks (illness, maternity, work accidents and occupational diseases, disability, old age, survivors and unemployment). It also provides for family allowances for Danish residents. Unemployment insurance is not mandatory. The worker must take out voluntary insurance to receive daily allowances in the event of cessation of activity.
Administrative Organisation
The health care system is supervised by the Danish Health Autority (Sundhedsstyrelsen) and the Danish Patient Safety Authority (Styrelsen for Patientsikkerhed), while the five Danish regions and their municipalities share responsibility for health care. Daily sickness benefits are paid by the local authorities.
Social pensions, disability pensions, housing benefits, family benefits and cash benefits from the maternity insurance are administered by Udbetaling Danmark.
The occupational accident and disease insurance is managed partly by private insurers (only for occupational accidents) and partly by the Labour Market Insurance (LMI).
The administration of unemployment insurance benefits (voluntary insurance) is carried out by about 20 unemployment funds, private associations licensed by the state. At the national level, the Danish Agency for Labour Market and Recruitment (Styrelsen for Arbejdsmarked og Rekruttering) is responsible for legislation concerning unemployment insurance and oversees the implementation of employment policies.
Social Contributions in Denmark
Plan for employees
In Denmark, sickness, maternity, disability, old age and survivors’ insurance (social pensions) and family benefits are financed by taxes.
Employer and/or employee contributions are required for occupational accidents and diseases, supplementary pensions and unemployment. Finally, all workers are required to pay a contribution to the functioning of the labour market.
Employees contribute 8% of their gross wages. This contribution (arbejdsmarkedsbidrag) is used to finance labour market expenses.
For occupational accident insurance, the employer pays a premium to an approved private insurance fund. For occupational diseases, a contribution is levied by the Labour Market Insurance (AES). In both cases, the amounts paid vary according to the risk insured.
Participation in unemployment insurance is optional. The employee can join one of the state-approved unemployment insurance funds. These funds set a fixed contribution each year (1). The employer does not contribute to the unemployment insurance.
Finally, for the supplementary work-related pensions (ATP pensions), which are compulsory for people who work at least 9 hours a week, a monthly contribution of between DKK 94.65 and DKK 284 is due for each employee aged 16 or over. The contribution (2) is paid 1/3 by the employee and 2/3 by the employer.
(1) The contribution consists of a fixed part for the state (obligatorisk statsbidrag), which is the same for all funds and amounts to DKK 357 per month for a full-time insured employee, as well as a part individually determined by the unemployment fund to cover its administrative costs. Insured persons may also choose to pay an additional contribution to participate in an early retirement plan.
(2) Variable contribution according to the number of hours worked.
Collection
The employer is responsible for paying the labour market contribution (arbejdsmarkedsbidrag) to the Tax Office (SKAT) and transfers the contribution for occupational pensions to ATP Livslang Pension.
Our HR & Payroll Experts are Ready to Help
Payroll and HR are different in each country and to each business. Trust one of our local experts to ensure your company’s compliance in Denmark.
Our Payroll and HR services in Denmark
- Implementation and testing of the software
- An understanding of your individual business payroll processes
- Online payslips & payments
- A dedicated payroll expert
- Data entry & processing
- Payslip distribution
- Personnel & document production
- Legislation compliance
- Highly secure
Good to know
Local Currency: Danish Krone (DKK)
Minimum Salary: There is no national minimum wage in Denmark. Wages are generally set by collective agreements.
Wage rates set by collective agreements vary according to age (different wage rates for workers over and under 18), experience (higher wages for more experienced workers) and difficulty of work.
Salary Payment: monthly, daily, hourly and at piece rates
Salary Calculation: gross to net
Legal Working Hours: 37 hours/week
Ready to Benefit from Danish HR & Payroll Experts?
About Denmark
Denmark is a Scandinavian country that includes the Jutland Peninsula and many islands, a total area of 2 210 579 km2. With a generous temperate climate due to its southern location compared to the rest of Scandinavia.
It has become one of the world leaders in developing many experiments in urban ecology for example the Ecovillage network. The goal of an ecovillage is to become more socially and ecologically sustainable than other communities.
Like the rest of Europe, Denmark is a post-industrial economy. Given the small size of its domestic market, the Danish economy depends heavily on foreign trade. Denmark exports its products afloat thanks to a dynamic specialized industry and its maritime and river transport, which are among the most important in the world. Several Danish companies have gained worldwide notoriety in specialised niches with steady growth.
Social Security in Denmark
Danish social protection covers all risks (illness, maternity, work accidents and occupational diseases, disability, old age, survivors and unemployment). It also provides for family allowances for Danish residents. Unemployment insurance is not mandatory. The worker must take out voluntary insurance to receive daily allowances in the event of cessation of activity.
Administrative Organisation
The health care system is supervised by the Danish Health Autority (Sundhedsstyrelsen) and the Danish Patient Safety Authority (Styrelsen for Patientsikkerhed), while the five Danish regions and their municipalities share responsibility for health care. Daily sickness benefits are paid by the local authorities.
Social pensions, disability pensions, housing benefits, family benefits and cash benefits from the maternity insurance are administered by Udbetaling Danmark.
The occupational accident and disease insurance is managed partly by private insurers (only for occupational accidents) and partly by the Labour Market Insurance (LMI).
The administration of unemployment insurance benefits (voluntary insurance) is carried out by about 20 unemployment funds, private associations licensed by the state. At the national level, the Danish Agency for Labour Market and Recruitment (Styrelsen for Arbejdsmarked og Rekruttering) is responsible for legislation concerning unemployment insurance and oversees the implementation of employment policies.
Social Contributions in Denmark
Plan for employees
In Denmark, sickness, maternity, disability, old age and survivors’ insurance (social pensions) and family benefits are financed by taxes.
Employer and/or employee contributions are required for occupational accidents and diseases, supplementary pensions and unemployment. Finally, all workers are required to pay a contribution to the functioning of the labour market.
Employees contribute 8% of their gross wages. This contribution (arbejdsmarkedsbidrag) is used to finance labour market expenses.
For occupational accident insurance, the employer pays a premium to an approved private insurance fund. For occupational diseases, a contribution is levied by the Labour Market Insurance (AES). In both cases, the amounts paid vary according to the risk insured.
Participation in unemployment insurance is optional. The employee can join one of the state-approved unemployment insurance funds. These funds set a fixed contribution each year (1). The employer does not contribute to the unemployment insurance.
Finally, for the supplementary work-related pensions (ATP pensions), which are compulsory for people who work at least 9 hours a week, a monthly contribution of between DKK 94.65 and DKK 284 is due for each employee aged 16 or over. The contribution (2) is paid 1/3 by the employee and 2/3 by the employer.
(1) The contribution consists of a fixed part for the state (obligatorisk statsbidrag), which is the same for all funds and amounts to DKK 357 per month for a full-time insured employee, as well as a part individually determined by the unemployment fund to cover its administrative costs. Insured persons may also choose to pay an additional contribution to participate in an early retirement plan.
(2) Variable contribution according to the number of hours worked.
Collection
The employer is responsible for paying the labour market contribution (arbejdsmarkedsbidrag) to the Tax Office (SKAT) and transfers the contribution for occupational pensions to ATP Livslang Pension.
Our HR & Payroll Experts are Ready to Help
Payroll and HR are different in each country and to each business. Trust one of our local experts to ensure your company’s compliance in Denmark.
Our Payroll and HR services in Denmark
- Implementation and testing of the software
- An understanding of your individual business payroll processes
- Online payslips & payments
- A dedicated payroll expert
- Data entry & processing
- Payslip distribution
- Personnel & document production
- Legislation compliance
- Highly secure