Hire in Denmark: A Comprehensive Guide for 2026

Introduction

Hiring remote employees in Denmark means working within the Ansættelsesbevisloven, Denmark's Employment Certificate Act, which requires written terms within seven days of the start date.

Denmark has no statutory minimum wage, so the collective agreement covering the sector decides minimum pay.

Registering an ApS through the Danish Business Authority takes months and requires share capital and local payroll infrastructure before anyone is paid. Contractors look like the lighter route. Danish authorities assess how a relationship works in practice rather than what the contract calls it, so a contractor working set hours under your direction can be reclassified, leaving you liable for back-dated tax withholding, ATP contributions, and accrued holiday pay.

In this guide, we cover the three ways to hire remote employees in Denmark, the employment laws that shape every hire, payroll and taxes, leave benefits, and what a Denmark hire costs.

How to hire in Denmark?

Companies hiring in Denmark generally choose between three routes, and the right one usually comes down to headcount and how long you plan to stay in the market.

Option 1: Set up a local entity

Registering an ApS (Anpartsselskab, a private limited liability company) with the Danish Business Authority lets you employ people directly under Danish law. This suits organisations building a long-term Danish presence. It also brings share capital requirements, registration with Danish Tax Agency, local payroll infrastructure, and ongoing statutory filings, all of which take months to stand up.

Option 2: Engage independent contractors

This works for project-based or specialist work where the person serves multiple clients and controls their own methods and hours. Danish authorities assess the substance of the working relationship rather than the wording of the contract, so roles that sit inside a team, use company equipment, and follow a fixed schedule carry real reclassification risk.

Option 3: Work with an employer of record

An EOR acts as the legal employer in Denmark, so you can hire and pay staff without registering an entity. The EOR issues the local contract, runs payroll in DKK, and files statutory contributions, while your team directs the day-to-day work. This route typically suits first hires, small teams, and market testing.

Most Danish teams end up running two of these at once, a few full-time hires alongside contractors on defined projects.

Skuad supports both hiring models from a single platform:

EOR for full-time employees

• Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
• Supports employment contract generation aligned with local labour laws across supported markets
• Facilitates statutory contribution workflows covering applicable pension and labour market obligations
• Supports payroll processing in 70+ currencies with tax withholding and statutory deductions
• Assists with termination and offboarding, including notice periods and severance calculations as required locally

Contractor management (AOR)

• Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
• Supports invoice generation, approval workflows, and payment processing across supported markets
• Helps flag classification risk early with built-in worker classification checks
• Facilitates multi-currency payouts across 70+ currencies without manual reconciliation
• Helps keep contractor records, agreements, and payment history alongside full-time employees in one dashboard

Full-time or contractor in Denmark, Skuad supports both. See pricing

How much does it cost to hire an employee in Denmark?

The cost of hiring in Denmark depends on whether you set up a local entity or use Employer of Record (EOR) services. Beyond salary, both routes carry ATP and Samlet Betaling contributions, holiday pay accrual, and any pension required by the applicable collective agreement. Let us compare the two approaches:

Setting up a local entity vs. using an EOR or AOR in Denmark

Denmark's employee cost structure is unusual, with light employer-side costs, around DKK 891 per quarter in ATP and DKK 550 in Barsel.dk per full-time employee, compared to the employee side, with 8% labour market contribution (AM-bidrag), 12.01% bottom tax, and municipal tax averaging about 25% withheld from gross pay. Occupational pension comes from the applicable collective agreement, so it varies by sector.

Skuad's employee cost calculator helps you estimate the full cost of employing someone in Denmark up front, so you can budget against total cost of employment rather than base salary.

Estimate the total cost of your Denmark hire

What are the employment laws in Denmark?

Employment laws in Denmark cover employment contracts, working hours, wages, termination, and post-employment restrictions. Two sources set these rules together: legislation, and collective agreements negotiated between trade unions and employers' organisations.

According to Workplace Denmark, run by the Danish Working Environment Authority, pay and working hours come mainly from collective agreements or individual contracts. Legislation then sets minimum standards in specific areas. For an employer hiring in Denmark, the rules that apply depend on the role and the sector agreement that covers it.

Employment contracts in Denmark

The Employment Certificate Act decides what must be put in writing. It was extended on 1 July 2023 and now applies to anyone working more than an average of three hours a week over a four-week period, including zero-hour arrangements.

Under that Act, the employer must provide written terms within seven days of the employment relationship starting. The Act also limits probation to six months, or a quarter of the contract term for fixed-term roles. For employees covered by the Salaried Employees Act, the stricter cap applies: probation under that Act can run to a maximum of three months.

Working hours and overtime in Denmark

Danish legislation does not set a single statutory working week. Most agreements set a full-time week below the statutory ceiling, and overtime rates vary by sector agreement.

Two statutes set the outer limits:

• Under the Working Hours Act, average weekly working time cannot exceed 48 hours, including overtime, measured over four months
• Under the Working Environment Act, employees are entitled to 11 consecutive hours of rest in every 24-hour period
• Employees are also entitled to one 24-hour period off each week, following directly after a daily rest period, with no more than six 24-hour periods between two days off

These limits can be derogated from in a collective agreement, so the applicable sector agreement should be checked alongside the statute.

Since 1 July 2024, amendments to the Working Hours Act require every employer to run a system for working time registration that records daily hours. The system can be paper or digital. Hours can be entered in advance, and the employee updates the record only when actual hours change.

Minimum wage in Denmark

There is no statutory minimum wage in Denmark. According to Workplace Denmark, wage floors come from the collective agreement covering the sector, so the same job title can carry a different minimum depending on the industry.

Termination, notice, and severance

The Danish Salaried Employees Act (Funktionærloven) sets minimum rights for salaried employees. According to the Danish Business Authority, the Act applies where the employee works more than eight hours per week on average and works under the employer's instructions. In practice, that covers office, retail, warehouse, technical, and clinical roles. Construction, manufacturing, agriculture, and hospitality staff are usually not covered and follow their collective agreement.

• Notice: The employee gives one month. The employer's notice period grows with length of service, reaching a maximum of six months after more than nine years.
• Unfair dismissal protection: Under the Salaried Employees Act, protection starts after 12 consecutive months of employment. Collective agreements often use a lower threshold of around nine months.
• Compensation: For an unfair dismissal, compensation is capped at the length of the notice period. Courts usually award between half and two-thirds of that cap.
• Severance: Salaried employees with 12 to 17 years of service receive one or three months' salary. Blue-collar severance follows the relevant collective agreement.

A dismissal requires a valid reason. For performance or conduct issues, the employer is usually expected to issue a written warning and allow a period to improve before terminating.

Danish employment rules cover a lot of ground: working time limits, probation caps, notice periods that scale with service, severance tiers, and compensation rules for restrictive covenants. For the full breakdown, including employee benefits, social security contributions, and health and safety obligations, read Skuad's guide to employment laws in Denmark.

Read Skuad's guide to employment laws in Denmark

What are the challenges of hiring in Denmark?

Hiring in Denmark is straightforward on paper, but the difficulty sits in places foreign employers do not expect. Most of it comes from the collective agreement system, which decides rules that statute handles in other countries. These are the main challenges:

• Identifying the right collective agreement

Denmark has no statutory minimum wage and no statutory working week. The agreement covering your sector sets the pay floor, overtime rates, pension contribution, and often the notice terms. An employer who drafts a contract without knowing which agreement applies can end up below a binding floor without realising it, and the gap usually surfaces through a union or a dispute rather than at signing.

• Worker misclassification

Danish authorities look at how the relationship works in practice rather than what the contract calls it. The Danish Tax Agency's case against Wolt is the clearest recent example, where courier income previously reported as freelance or business income was reclassified as salary. Where a contractor is reclassified, the employer generally faces back payment of the tax and statutory contributions that should have been withheld, along with the employment entitlements that would have applied.

• Getting Funktionærloven coverage wrong

Whether the Salaried Employees Act applies changes notice periods, sick pay, severance, and the probation cap. Coverage turns on the nature of the work rather than the job title, so a role classified incorrectly at contract stage creates exposure that only surfaces at termination.

• Working time registration

Since 1 July 2024, every employer must operate a system that measures and records each employee's daily hours. The obligation applies regardless of team size, and it applies to employers based outside Denmark in the same way as to Danish ones.

• Work permits for non-EU nationals

Third-country hires need a residence and work permit through SIRI before they start. According to SIRI, applications submitted on or after 1 January 2026 under the Pay Limit Scheme require an annual salary of at least DKK 552,000, or DKK 46,000 a month. The Supplementary Pay Limit Scheme sits at DKK 446,000 but requires the position to be publicly advertised and the gross unemployment rate to sit below a set level. The Positive Lists are revised every 1 January and 1 July, so a role that qualifies today may not qualify at the next application. The Fast-track Scheme is only open to employers already certified by SIRI. Government application fees also increased in 2026.

• Restrictive covenant compensation

A non-competition clause is enforceable only where the employer pays compensation for the restricted period, at 40% of salary for covenants up to six months and 60% for longer or combined clauses. A covenant carried across from a UK or US template will usually fail the Danish test, leaving the employer with no protection and, where compensation has been triggered, a cost anyway.

Each of these carries its own penalty exposure, and most only become visible after the fact, at an inspection, a termination, or a permit renewal. For a company running a handful of Danish employees from abroad, tracking six moving obligations alongside a shifting collective agreement is not a realistic use of an internal legal team.

Skuad helps with this through Shield, its compliance infrastructure, so your team does not have to police each obligation independently. Here is what Skuad helps with:

• Helps flag worker classification risk before it becomes a compliance issue with built-in classification checks
• Supports employment contract generation across 160+ countries, aligned with local labour laws and statutory requirements
• Facilitates statutory contribution and tax-withholding workflows across supported markets
• Assists with work permit and visa support for foreign nationals joining your team
• Helps keep your team aligned with local employment laws as regulations change across supported markets
• Supports audit-ready record keeping for contracts, filings, and statutory documentation

Hire in Denmark without setting up an entity

Hiring in Denmark gives you access to a highly educated, English-fluent workforce, especially in life sciences, cleantech, and engineering.

An employer of record gives you a way into the market without registering an ApS or building Danish payroll and HR from scratch. Skuad acts as the legal employer in Denmark, so you can hire, onboard, and pay your team while staying aligned with Funktionærloven and the applicable collective agreement as they change.

Companies across SaaS, life sciences, cleantech, and professional services use Skuad to enter the Nordic market and scale their teams there. Whether you are making your first hire or growing an existing team, Skuad supports the contracts, payroll, and compliance work behind every Denmark hire.

Book a demo to see how quickly Skuad can onboard your first Denmark hire

FAQs

1. How can a foreign company hire employees in Denmark?

Foreign companies typically have three routes: registering an ApS with the Danish Business Authority, registering as a foreign employer with Skattestyrelsen for payroll purposes, or hiring through an employer of record that holds the legal employment relationship. The choice usually depends on headcount and timeline.

2. Is there a minimum wage in Denmark?

Denmark has no statutory minimum wage. Pay levels generally come from the collective agreement covering the sector, negotiated between trade unions and employer associations, so the same job title can carry a different minimum depending on the industry and the agreement in force.

3. What types of employment contracts are used in Denmark?

Danish contracts are usually indefinite or fixed-term. The more consequential distinction is whether the employee counts as a funktionær under the Salaried Employees Act, which generally applies above eight hours a week under the employer's instructions and governs notice, sick pay, and severance.

4. Do you have to sign a collective agreement to hire in Denmark?

Foreign employers are not automatically bound by one. Companies can typically join an employers' association, sign a company agreement directly with a union, or remain outside both. Unions can take industrial action to press for an agreement, so the position is rarely settled permanently.

5. Do you need a written employment contract to hire in Denmark?

Under the Employment Certificate Act, employers generally must provide written terms within seven days of the employment relationship starting. It applies to anyone working more than an average of three hours a week over a four-week period, including zero-hour arrangements.

6. How do you hire a non-EU national in Denmark?

EU and EEA nationals can typically work in Denmark without a permit, though they must register with the Danish authorities. Non-EU nationals generally need a residence and work permit through SIRI, most commonly under the Pay Limit Scheme, the Positive List, or the Fast-track Scheme.

‍