Mercans Logo
SUBMIT RFP CONTACT US
Denmark countryintel banner
Country Intel

Employer of Record/PEO and Payroll Services in Denmark Denmark flag

mercans logo

Mercans-owned legal entity
union We have our own legal entity to protect your business from risk and provide you and your employees with a distinctive experience.

Services available

  • Employer of record
  • Contractor management
  • Global payroll
  • In-country payroll
Dive deeper into Denmark
native flag Danish english flag English
Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
Payroll in Denmark
EOR in Denmark
PEO in Denmark

Denmark map

eor

Mercans offers complete payroll, PEO and HR services in Denmark

Backed by a strong educational system and a broad-based economy, Denmark remains one of Europe’s most attractive places to do business. The country has a productive workforce, well-connected infrastructure and an innovation-friendly environment. Key industries include cleantech, life sciences, food, maritime, digital technology and design.

eor

Doing Business in Denmark

Denmark remains one of Europe’s leading business locations, supported by a transparent regulatory environment, digital public systems and efficient company registration procedures. The country is especially attractive for technology, green transition, life sciences and advanced manufacturing activities.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Denmark is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking

Banking Hours: from 10:00 am – 4:00 pm from Monday to Friday (except Thursday) till 5:00 pm.

Working Week

The standard working week is generally around 37 hours, usually worked from Monday to Friday.

Labor Law

Denmark operates a flexicurity model that combines labor market flexibility with a strong social safety net. Employment conditions are shaped by legislation, collective agreements and individual contracts, while work permit rules also support recruitment in selected shortage and skilled worker categories.

Main Industries

Wind turbines, pharmaceuticals, medical equipment, maritime industries, food processing, life sciences and technology

GDP Growth

2.0%

Dates & Numbers

dd/mm/yyyy

Official State Name

The Kingdom of Denmark

Population

6.03 million

Capital

Copenhagen

Major Languages

Danish

Currency

Danish Krone

Internet Domain

.dk

International Dialing Code

+45

loader-image
Denmark
Copenhagen, DK
4:25 pm, May 1, 2026
20°C
few clouds
36 %
Wind Gust: 0 mph
Clouds: 11%
Sunrise: 5:27 am
Sunset: 8:46 pm

eor

Payroll in Denmark

Mercans payroll services in Denmark provide a fully managed payroll solution to process employees’ salaries and related financial transactions in compliance with Danish labor laws and regulations, ensuring accuracy, confidentiality, and timely payments.

Denmark does not impose a complicated or onerous tax system on foreign companies operating in the country. When it comes to Denmark payroll, foreign companies who need to comply with Danish tax laws have the following primary concerns: individual income tax for employees, labor market contributions, ATP, payroll reporting, VAT, withholding tax, business tax, and permanent establishment.
However, you need not worry if you plan to hire or carry out payroll in Denmark since we do the hard work for you. With experience, expertise, and smart payroll technology, our UK-based payroll team delivers industry-leading outsourced payroll services. As one of the largest payroll providers in Denmark, Mercans is a leader in the industry.

As a specialist payroll service provider in Denmark, we can help your team navigate ever-evolving regulations by taking the hassle out of complex and time-consuming payroll processes, including reporting and pension-related administration. You can rely on our dedicated payroll experts to respond to all your payroll-related queries and requirements in real time.

eor

Payroll

Salary conditions are generally determined by collective agreements or individual agreements between companies and employees. Pay levels and agreement terms vary across sectors, and Denmark does not have a general statutory minimum wage.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for five years

Reports

25 days of paid annual leave

Annual Leave

Employees may have a right to pay during sick leave, and sickness benefit can generally be paid for up to 22 weeks within the last 9 full calendar months, subject to the rules

Sick Leave

Mothers generally have 4 weeks before birth and 10 weeks after birth, fathers or co-mothers have 2 weeks at birth, and each parent then has additional parental leave rights

Maternity & Paternity Leave

1 month is a common minimum under the Salaried Employees Act, with longer notice periods depending on service

Employee Termination

There are no provisions mandated by law regarding the 13th month salary

13th month salary

There is no general statutory minimum wage

Minimum Wage

Overtime rates are usually determined by collective agreements or individual contracts. Denmark does not have a single statutory overtime premium across all employees

Overtime

Salaried employees may be entitled to a dismissal allowance of 1 or 3 months’ salary after long service, typically after 12 or 17 years

Severance Pay

eor

Employer of Record (EOR) in Denmark

eor

Mercans Employer of Record (EOR) services in Denmark offer a compliant employment solution for foreign companies to legally hire, manage and onboard employees in Denmark, handling HR, payroll, tax compliance, and other administrative tasks, while ensuring compliance with Danish employment laws and regulations. With Mercans’ EOR in Denmark solution, your business can expand to Denmark without setting up an entity.

eor

Using our employer of record services, you can simplify the onboarding of your remote team, manage their payroll and benefits in a compliant manner. Using our international network, we simplify global expansion for you. Mercans is also regarded as a highly trustworthy, efficient and top EOR provider in Denmark, along with 160 other countries.

eor

Through Mercans, you can access Danish talent at all levels of experience. Mercans’ local network and global infrastructure allow it to perform activities such as hiring, managing contracts and payrolls, onboarding, and employee record management, so you can focus on your organization’s core business goals.

eor

PEO in Denmark

Mercans PEO (Professional Employer Organization) services in Denmark provide a comprehensive HR outsourcing solution for foreign companies to establish a local presence, compliantly hire and manage employees, handle HR, payroll, benefits, tax compliance, and other administrative tasks, while reducing costs and administrative burden.

Through our PEO in Denmark, we provide services that are flexible and cost-effective for companies seeking to outsource their HR and payroll processes. As a Professional Employer Organization, Mercans offers a range of services including employee benefits, payroll administration, and compliance with Danish employment laws. By entrusting their HR and payroll needs to Mercans, companies can focus on their core business activities and ensure a smooth and efficient HR operation.

Partnering with our PEO in Denmark presents the fastest and most efficient way to enter the Danish market.

Contact us to explore how PEO Denmark solutions from Mercans can support your seamless expansion!

Benefits of Hiring an employee through a Denmark PEO

Denmark is consistently ranked as one of the world’s easiest places to do business, but its labor environment and strong employee protections require careful navigation. Partnering with a PEO in Denmark ensures your business enters the market efficiently while remaining fully compliant. Here’s how:

Fast and Compliant Market Entry

Launching operations in Denmark can be streamlined through a PEO Denmark partner, allowing you to hire and onboard employees without establishing a local entity, saving time, cost, and administrative effort.

Seamless Integration with Denmark’s Digital Systems

Denmark has a world-class digital infrastructure, including fully online tax and employment systems. A local PEO ensures smooth integration with the relevant digital systems, avoiding costly delays or technical missteps.

Expert Navigation of Danish Labor Laws

With strong worker protections, collective bargaining traditions, holiday entitlements, and parental leave rules, a Denmark PEO helps ensure that all key legal requirements are met from day one.

Efficient Payroll and Tax Compliance

Danish payroll includes labor market contribution, ATP, pension-related arrangements and detailed reporting obligations. A PEO handles these tasks with precision, ensuring timely filings and accurate payments.

Access to a Highly Educated Workforce

Denmark’s talent pool is known for its high level of education, innovation mindset, and fluency in English. A PEO helps you tap into this resource efficiently while managing localized employment expectations.

Support for Work-Life Balance and Sustainability Goals

Denmark places strong emphasis on work-life balance and sustainability in business practices. A PEO helps align your employer brand with local cultural values, attracting and retaining top talent.

Scalable Expansion with Minimal Overhead

Whether hiring one remote specialist or building a regional office, a PEO in Denmark offers flexible solutions that grow with your business without requiring internal HR infrastructure.

eor

Tax and Social Security

The Danish Tax Agency manages and enforces Danish tax law. Employees generally pay labor market contribution through payroll, and statutory ATP pension contributions also apply where the employee is covered. In addition, many employees are covered by occupational pension schemes under collective agreement or contract.

Tax

Denmark applies a mature tax system with a 22% corporate income tax rate. Personal income taxation is progressive and can reach a high combined marginal level, while the standard VAT rate remains 25%.

22%

Corporate Income Tax

55.9%

Personal Income Tax

25%

Sales Tax

25%

VAT

Social Security

Denmark does not operate a broad percentage-based social security system in the same way as many other European countries. Employees generally pay 8% labour market contribution on salary income and ATP contributions apply at fixed statutory amounts, with the employer paying two thirds of the ATP contribution and the employee one third.

8% + ATP

Social Security Rate

ATP share

Social Security Rate for Employers

8% + ATP

Social Security Rate for Employees

eor

eor

Employment Law

There are several sources of employment regulation in Denmark, including legislation, executive orders and collective agreements. The Danish labor market model allows employers relatively broad flexibility, while employees benefit from contractual, statutory and welfare protections.

Employment Agreement

A collective agreement is an agreement between parties that defines working conditions for workers in a company or industry. Neither Danish nor foreign companies are automatically required to conclude a collective agreement, but employers must still comply with applicable law and provide employees with the required written employment information.

Working condition

The EU Working Time Directive helps define the framework for working hours, including daily rest periods and a maximum average weekly working time of 48 hours. In practice, normal weekly working time in Denmark is often around 37 hours.

Leaves

At minimum, an employee is entitled to the holiday entitlement and holiday pay that applies under the Danish Holiday Act. Employees accrue 2.08 days of holiday per month, corresponding to 25 days per year.

Employment termination

An employer must generally have a substantial reason for terminating an employee. The termination notice period must be stated in the employment contract, and if the employee is covered by the Salaried Employees Act, statutory notice rules apply based on length of service.

eor

1 month

Minimum notice period for terminating an employee

eor

10

Total number of public holidays

eor

37

Working hours per week

eor

2 days

Total number of days for Compassionate & Bereavement Leave

eor
eor

Immigration

Citizens from a Nordic country may freely live and work in Denmark. Citizens from an EU or EEA country or Switzerland may apply for an EU residence document on arrival. For third-country nationals, the relevant applications and documentation are generally handled through SIRI and other Danish authorities depending on the route.

eor

Residency permits

For foreign workers intending to stay in Denmark for longer than three months, the registration process varies depending on nationality and permit type. Nordic citizens generally need a CPR number and tax registration, EU or EEA or Swiss citizens generally need an EU residence document, and third-country nationals generally need a residence and work permit before applying for a CPR number and tax card.

Work Permit Validity

Up to 4 years in many main work schemes, depending on the permit category and contract duration

Required Documents

EU national requirements:

  • A passport or national ID
  • A passport-sized photo where required
  • A completed application form where applicable
  • Documentation supporting residence as a worker

Other requirements:

  • Evidence that the application fee has been paid where applicable
  • Completed authorization or power of attorney form where relevant
  • An employment contract or official job offer

Compliant, reliable, error-free and touchless payroll in Denmark

Build the best team and hire top talent compliantly in Denmark. Get in touch with Denmark payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
Tell us where you want to grow.
Our team regional experts are here to support you with global expansion plans.

    I’m interested in

    Sample message

    1. We want to expand in $country

    2. We want you to employ 'X' number of employees on our behalf

    3. Contract duration – 3/6/9/12/18/24 months

    4. Number of legal entities (if any exist today)

    5. Employment type: EOR employee or contractor?

    6. Any benefits requirement or “standard statutory only”?


    FAQs

    What is an Employer of Record (EOR) in Denmark and how does it work for foreign companies?

    An Employer of Record in Denmark allows international companies to hire local employees legally without setting up a Danish entity. The EOR manages employment contracts, payroll, tax, social contributions, and ensures compliance with local labor laws.

    Why should businesses use an EOR instead of establishing a legal entity in Denmark?

    Partnering with an EOR offers a fast and cost-effective way to enter the Danish market. It removes the need for local company formation, reduces administrative work, and ensures full compliance with employment and tax regulations.

    How does payroll outsourcing in Denmark ensure compliance with tax and labor laws?

    Payroll outsourcing ensures all payments, deductions, and contributions follow Danish laws. The provider handles tax filings, social security, and reporting obligations accurately, minimizing compliance risks and administrative errors.

    Can an Employer of Record in Denmark hire employees and manage work permits for international companies?

    Yes, an EOR in Denmark can legally employ staff for foreign companies and assist with obtaining work and residence permits. This enables smooth operations and lawful employment for both local and foreign workers.

    What are the main benefits of using EOR and payroll services in Denmark for global expansion?

    EOR and payroll services provide quick market entry, reduced costs, compliance assurance, and access to local HR expertise. Companies can focus on growth while the EOR handles employment, payroll, and regulatory responsibilities.

    Learn how we can help you comply with Local labor law
    Discover the best-in-class Payroll solution
    Countries we serve
    Locate Mercans in Denmark