Payroll in Denmark

Pay frequency and payday

Monthly wages in Denmark are normally paid monthly in arrears. Hourly, daily or piecework pay is commonly paid once or twice a month. The dossier gives no statutory maximum pay period, so record the agreed payment schedule and every salary component in the written contract. The information duty covers employees averaging more than three hours a week over four consecutive weeks, and those with no guaranteed paid work. Core written details, including pay components and payment dates, are due within seven calendar days of starting. The remaining information is due within one month.

Denmark has no statutory national minimum wage. Pay is set by the applicable collective agreement or by individual agreement, so check whether your company is bound by an agreement that covers the actual job.

Extra payments and holiday pay

There is no statutory 13th-month payment. Additional salary payments and bonuses depend on the binding contract or collective agreement, so confirm any such arrangement in the offer.

Holiday pay works in two ways. Qualifying monthly employees receive their normal salary during holiday plus a statutory one-percent holiday supplement. Other employees normally accrue holiday allowance of 12.5% of the qualifying pay base. Do not add 12.5% on top of a salaried employee's full paid holiday.

Great Prayer Day ceased to be a public holiday from 1 January 2024. Where this increases working time, employees on a fixed monthly or other periodic salary receive a supplement of 0.45% of annual salary. It is accrued continuously and paid with May and August wages, or regularly with pay. Hourly workers receive the agreed ordinary pay for the extra work.

Payslips, tax and contributions

Show salary components, employee ATP, the employee's own pension contribution, AM-bidrag and other withheld tax as separate lines. Payroll deducts employee ATP and the employee's pension contribution before calculating AM-bidrag, then withholds other tax. AM-bidrag is an eight-percent employee tax on covered salary income. Do not add it again to the employer budget.

Withholding follows the employee's digital tax card and individual deductions. Income tax is not one flat deduction. State tax has a 12.01% bottom rate, with additional middle, top and further top tax above set thresholds, plus municipal tax and, where applicable, church tax. The general 2026 personal allowance is DKK 54,100 a year, and the primary allowance should not be used by multiple employers.

ATP at the standard full-time rate is DKK 297 a month. The employer pays DKK 198 and the employee pays DKK 99, deducted from pay. For full-time equivalents where each scheme applies, 2026 quarterly employer charges are AUB DKK 705.25, Barsel.dk DKK 550, financing contribution DKK 82 and holiday-transition fund administration DKK 5. AES varies by industry, so there is no universal all-in employer percentage. Occupational pension is separate and comes from the contract or collective agreement.

You need the relevant Danish registrations and must report pay, tax, ATP and holiday items through the applicable systems. SKAT's payroll service requires employer registration before use. A payroll bureau does not remove your responsibility for correct and timely reporting. Check your actual reporting and payment deadlines. The employee's payday is not the tax deadline.

Working time rules that affect pay

A thirty-seven-hour week is common by agreement, not a universal statutory full-time requirement. The ordinary maximum averages forty-eight hours including overtime over four months. There is no universal overtime premium, so pay or time off for overtime and any night or Sunday premiums must follow the contract or collective terms.

Adults ordinarily need eleven consecutive hours of daily rest, a weekly twenty-four-hour rest period combined with daily rest, and a suitable break when work exceeds six hours. Since 1 July 2024, employers must provide an objective, reliable and accessible system for measuring covered employees' daily working time. Workers must be able to access their own records, and you keep them for five years after the reference period ends. The exception for genuinely autonomous decision-makers is narrow, and a senior job title alone does not establish it.

Denmark does not have a single income tax rate you can apply to gross pay. Employees pay a labour-market contribution first, then state, municipal and, where applicable, church tax on what remains. The national income tax fact in the data (a single 35.33% bracket) is a summary figure, not a withholding rate, so this guide uses the statutory structure below.

Income tax bands

State income tax has a bottom rate and several additional layers. The employment-income thresholds apply after AM-bidrag is deducted. Allowances, deductions and capital-income rules affect the bases, so the table shows layers, not a ready-made take-home calculation.

Municipal tax and, where applicable, church tax are charged on top. Their rates are not in the data for this guide, so check the employee's tax card for the rates that apply. The personal income tax top rate in the data is 57%.

How withholding works

Payroll withholds tax using the employee's digital tax card and individual deductions, not a flat percentage. The order matters. Payroll deducts the employee's ATP and the employee's own pension contribution first, then calculates AM-bidrag, then withholds the other tax.

AM-bidrag is an eight-percent employee tax on covered salary income. From 2026 it applies from the calendar year the person turns eighteen. It is withheld from pay. It is not an employer social contribution, so do not add it to the employer budget.

Allowances and credits

SKAT lists the general 2026 personal allowance as DKK 54,100 a year. The primary allowance should not be used by more than one employer for the same person. The allowance does not exempt an adult employee's salary from AM-bidrag. Net pay needs an individual calculation based on the tax card.

Employee deductions beyond tax

The OECD data shows an employee social contribution rate of 0% of gross. The practical deductions are the following.

• AM-bidrag: eight percent of covered salary income.
• ATP: at the standard full-time rate the employee pays one third, DKK 99 a month or DKK 1,188 a year. The employer pays two thirds, DKK 198 a month or DKK 2,376 a year.
• Occupational pension: where the contract or collective agreement provides one, the employee's share is deducted before AM-bidrag. ATP is separate from this.

Business taxes are a separate matter

The corporate tax rate is 22% and the VAT rate is 25%. These are business and transaction taxes. Neither is a percentage taken out of an employee's salary.

Denmark funds most of its social protection through general taxation, not payroll contributions. As a result, employer social contributions on pay are small compared with many other countries. The headline employer rate is low, but a handful of fixed-amount schemes and contractual items sit alongside it.

Employer and employee rates

The OECD figures for 2025 show an employer social contribution rate of 0.67% of gross pay and an employee social contribution rate of 0%. The statutory supplementary pension, ATP, and several fixed-amount employer charges are separate and are shown below.

At the standard full-time rate ATP totals DKK 297 a month, or DKK 891 a quarter. The employer pays two thirds and the employee pays one third, deducted from pay. Working-time and social-security coverage rules affect who is liable.

Other employer charges

For a full-time equivalent where each scheme applies, the 2026 quarterly charges are:

• AUB: DKK 705.25
• Barsel.dk: DKK 550
• Financing contribution: DKK 82
• Holiday-transition fund administration: DKK 5

Another maternity scheme can replace Barsel.dk. AES varies by industry. Apprenticeship adjustments and FerieKonto administration can add further costs. There is no universal all-in employer percentage, so build the budget from the schemes that apply to the actual hire.

Ceilings and thresholds

The dossier gives no contribution ceiling or floor for the 0.67% rate. Check the current base and any limits with the relevant authority before you budget. The ATP and quarterly charges above are fixed amounts, not percentages of pay, so they do not rise with salary.

What is and is not included

• Not an employer cost: AM-bidrag, the labour-market contribution, is an eight-percent employee tax on covered salary income. Do not add it to the employer budget.
• Not an employer cost: income tax. It is withheld from the employee, and the rates are not a flat deduction from gross pay.
• Separate from ATP: occupational pension. Contributions can arise from the employment contract or an applicable collective agreement, each with its own employer and employee shares.
• Separate items: holiday pay, sick pay and family-leave pay depend on the statute, contract and collective terms, and are not part of the social contribution rate.

The same point applies to contractor reviews. If the tax authority treats a person as an employee, the employee's eight-percent labour-market tax is still not an employer social contribution.

Worked cost example

The dossier does not contain a salary-based cost example, so none is given here. To estimate the cost of a hire, take the gross pay, add the 0.67% employer rate, then add each fixed-amount scheme that applies and any occupational pension from the contract or collective agreement.

Check actual reporting and payment deadlines with the Danish tax authority instead of assuming they match the employee's payday. Using a payroll bureau does not remove the employer's responsibility for correct and timely reporting.

Annual leave

The statutory system gives five weeks of annual holiday, normally 25 days. Paid entitlement accrues at 2.08 days per month, and proportionately for shorter periods. The earning year runs from 1 September to 31 August, and leave can be used during that year and the following four months to 31 December. A new hire does not automatically have 25 fully paid days on day one, although paid leave in advance can be agreed.

Employees generally have a right to three consecutive weeks of main holiday between 1 May and 30 September. Employers normally need to give three months' notice for main holiday and one month for other days. Do not treat all unused leave as automatically lost or payable in cash.

Qualifying monthly employees receive their normal salary during holiday plus a statutory one-percent holiday supplement, subject to permitted collective variations. Other employees normally accrue holiday allowance of 12.5% of the qualifying pay base. These are different arrangements, so do not add 12.5% on top of a salaried employee's full paid holiday.

Public holidays

The general public holidays are New Year's Day, Maundy Thursday, Good Friday, Easter Sunday and Monday, Ascension, Whit Sunday and Monday, and Christmas Day and Boxing Day. That is ten named days, including Sundays. Constitution Day and Christmas Eve are not general public holidays. Check the contract, collective agreement and work schedule for time off and pay, because not every calendar holiday creates an extra paid day off.

Great Prayer Day ceased to be a public holiday from 1 January 2024. Where this increases working time, employees on a fixed monthly or other periodic salary receive a supplement of 0.45% of annual salary. It is paid with May and August wages or regularly with pay, with proportionate settlement on exit.

Sick pay

Employees covered by the Salaried Employees Act normally keep full salary during sickness. This does not automatically stop after thirty days. Where the worker has no right to full salary, the employer generally pays sickness benefit for the first thirty calendar days if the eight-week and seventy-four-hour employment conditions are met. Contractual and collective rights can add to this.

An employer that continues salary after thirty days may claim municipal reimbursement up to the employee's sickness-benefit entitlement and bears the difference. Absence normally must be reported through NemRefusion within five weeks from the first day. The 2026 sickness-benefit maximum is DKK 5,085 a week. It is not a universal percentage of salary.

Maternity, paternity and parental leave

For current births, the mother ordinarily has four weeks of leave before the expected birth and ten weeks after birth, including two compulsory weeks. The father or co-mother has two weeks at birth or reception at home. After week ten, each parent has a separate right to 32 weeks of absence. Rights to absence and entitlement to pay are separate questions, so check both.

The mother normally notifies the employer three months before the expected birth. The father or co-mother normally gives four weeks' notice for early birth leave. Post-birth plans are generally notified within six weeks of birth. Returning employees have the right to the same or equivalent work on no less favourable terms.

Who pays for each

Employees ordinarily need employment immediately before or at the start of leave, 160 hours in the preceding four complete months, and forty hours in at least three of them. More favourable contractual or collective pay can apply, so confirm both before the leave starts.

Danish compliance rests on a few areas: the employer's registrations and payroll reporting, written terms of employment, working-time records, notice and dismissal rules, and the collective agreement that may sit behind all of them. There is no statutory minimum wage, so the applicable agreement or the individual contract sets pay. Identify the agreement for each hire and record why it applies. OECD data puts collective bargaining coverage at 81.6% (2023).

Registration and payroll reporting

The employer needs the relevant Danish registrations before it reports pay, tax, ATP and holiday items through the applicable systems. SKAT's payroll service requires employer registration before use. A payroll bureau does not remove the employer's responsibility for correct and timely reporting. Check the company's actual reporting and payment deadlines rather than assuming the employee's payday is the tax deadline.

Written terms of employment

The information duty generally covers employees who average more than three hours a week over four consecutive weeks, and those with no guaranteed paid work. Core written details are due within seven calendar days of starting. The remaining information is due within one month. The old one-month employment and eight-hour threshold is no longer the general rule.

The written terms should cover the employer and worker, workplace, role, start date and any fixed end, probation, pay components and payment dates, hours, overtime and scheduling. They should also cover paid leave, notice, training, collective terms and the relevant social-security institutions. Electronic delivery must be accessible, printable and retainable, and you need evidence of delivery. When a material term changes, update the written information by the date the change takes effect. Material changes to pay, duties, hours or workplace may also require notice equal to the employment notice period.

Time records

Since 1 July 2024, employers must provide an objective, reliable and accessible system for measuring covered employees' daily working time. Workers must be able to see their own records. Keep records for five years after the reference period ends. The exception for genuinely autonomous decision-makers or managers is narrow and must be reflected in the contract. A senior job title alone does not qualify.

Probation, notice and dismissal

The general statutory probation maximum is six months. Under the Salaried Employees Act, an agreed trial allowing the employer's fourteen-day notice must finish within the first three months. Qualifying collective rules can differ.

For salaried employees, employer notice is normally one month during the initial six months, then three months, increasing by one month for each three years up to six months. Notice normally ends at a month-end, and service during notice counts. Employee notice is normally one month to month-end, unless longer written terms apply.

Before any dismissal, check the employee's actual status, the collective agreement, the reason and the required process. Salaried employees with at least one year's continuous service can claim compensation where the dismissal is not reasonably justified. Discrimination and protected family-leave rules can apply without that service threshold. Salaried employees can request written reasons. A dismissed salaried employee with twelve years' uninterrupted service in the same business is entitled to one month's salary under section 2a, rising to three months at seventeen years. Notice salary, unused holiday and other payments are separate.