# Hiring in Denmark: employment costs, payroll and compliance

> Machine-readable page from EOR Overview (https://eoroverview.com/), an independent research platform for Employer of Record services.
> Canonical page: https://eoroverview.com/hiring-guides/denmark/
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> Statutory data last updated: 2026-02-23. Every figure below carries its own source year.

## Country

| Field | Value |
|---|---|
| Region | Europe |
| Currency | DKK (Danish krone) |

## Pay & working time

| Field | Value | Source year |
|---|---|---:|
| Average wage | 74,022 | 2024 |
| 13th-month salary | none | 2026 |

## Employer cost & tax

| Field | Value | Source year |
|---|---|---:|
| Employer social security | 0.7% | 2025 |
| Employee social security | 0% | 2025 |
| Total tax wedge | 35.8% | 2025 |
| Corporate tax rate | 22% | 2025 |

## Termination

| Field | Value | Source year |
|---|---|---:|
| Notice period | 18.8 weeks | 2019 |
| Severance pay | 0 weeks | 2019 |
| Employment protection | 1.9 | 2019 |

## Leave & time off

| Field | Value | Source year |
|---|---|---:|
| Paid annual leave | 25 days | 2026 |
| Public holidays | 10 days | 2026 |
| Maternity leave | 22 weeks | 2024 |
| Paternity leave | 24 weeks | 2026 |
| Parental leave | 19 weeks | 2024 |

## Labour market

| Field | Value | Source year |
|---|---|---:|
| Retirement age | 67 | 2024 |
| Unemployment rate | 6.7% | 2025 |
| GDP per capita | $71,026 | 2024 |
| Union density | 60.4% | 2024 |
| Collective bargaining coverage | 81.6% | 2023 |

## Overview

Denmark's collective bargaining system is the single rule that reshapes day-to-day employment here. With 81.6% of workers covered by collective agreements, the terms your employee works under are almost certainly set by a sector-level deal rather than just the contract you sign. That means pay floors, working-time rules, and supplementary benefits can all be dictated outside your direct control, and an Employer of Record (EOR) that knows which agreement applies to your hire is genuinely essential.

Beyond collective agreements, the numbers paint a picture of a high-wage, low-friction payroll environment. The average annual wage sits at 74,021.7 DKK, and the employer social security burden is remarkably low at 0.6684% of gross. What costs more is income tax: the total tax wedge reaches 35.8%, which sits almost entirely on the employee side. Notice periods, however, are long at 18.8 weeks, so workforce planning needs to account for that lead time from day one.

## Cost context

Denmark's employer social contribution rate is 0.6684% of gross salary, which is exceptionally low by European standards. Almost all of the tax burden falls on the employee rather than the employer, which is why the total tax wedge of 35.8% looks high while your direct on-cost as an employer stays very small. In practice, the bigger cost variables to plan for are sector-level wage floors set by collective agreements and the long notice period that locks in payroll commitment well beyond a typical termination date.

## Things to watch

A few specifics about Denmark will catch employers off guard if they are not prepared.

- Collective agreement coverage is near-universal. At 81.6% coverage, there is a strong chance your hire falls under a binding sector agreement. Check which one applies before you set any compensation terms.

- Notice periods run long. The statutory notice period is 18.8 weeks. If you need to end an employment relationship, you are looking at roughly four to five months of lead time, which has real budget implications.

- Union density is high. With 60.4% of workers in a union, employee representatives are an active part of the workplace. Decisions around working conditions may involve consultation that takes longer than you expect.

- Retirement age is 67. Benefit planning and any age-related provisions in your policies need to reflect this, especially if your global standard assumes a lower retirement threshold.

Providers ranked for Denmark: https://eoroverview.com/best/denmark/