Looking to grow your company? Hiring international employees opens you up to cost-effective, skilled talent that will benefit your team.
Hiring from Denmark gives you access to a talented workforce. In fact, the talent pool in Denmark is not only deep but also highly specialized. As such, this northern European country is an ideal choice if you’re looking to grow your team worldwide.
Of course, you’ll need to understand the costs of hiring in Denmark beyond salaries. This includes benefits, bonuses, payroll, and taxation in Denmark.
In this article, we’ll break down the cost of hiring talent from Denmark and look at how much you can expect to spend per hire.
Danish Hiring Costs
To start, as an employer, you’ll need to fulfill a few basic payment obligations. These include:
- Payroll (gross salaries)
- Taxes payments and withholding
- Statutory benefits
- Paid leave
- Overtime
- Severance pay
To make your hiring offers more attractive to prospective employees, it’s always helpful to include bonuses if possible, or “fringe benefits” like pay-in retirement plans, health insurance plans, meal subsidies, or other extras that go above and beyond an employee’s basic salary.
Required Costs of Hiring an Employee in Denmark
Danish Gross Salary
There is no official Danish minimum wage, but generally a minimum of around 110 Danish Krone (DKK), or around USD 16.60, per hour is an informally agreed-upon standard.
Denmark also operates under the Danish labor-market model, also known as “flexicurity,” which ensures a flexible and secure structure for employees and employers alike.
Danish Work Bonuses
Bonuses are common, but optional in Denmark.
Salaried employees whose bonuses are built into their salaries are entitled to a pro-rated portion of the bonus they are eligible to recievefor the year if they leave their employment before the end of the financial year.
Danish Government Fees and Taxes
Danish tax residents can be taxed by up to 52.07% per the standard tax scheme in 2023. Usually, many tax deductions can be applied to the taxes that Danes pay, so Danish workers’ effective tax rates are usually lower than this.
Labor market tax (8%), share tax (up to 42%), and church tax (approximately 0.92%), among others, are taxed outside of the 52.07% baseline.
Employers pay the following social security contributions in 2023.
- 2,271.6 DKK: ATP Pension
- 1,350 DKK, estimate: Maternity fund contributions: 1,350 DKK, estimate
- 5,000 DKK, estimate: Injury insurance
- 5,300 DKK, estimate:Other social security schemes
Benefits
There are a few types of statutory benefits in Denmark that you must pay as an employer. These include:
- Paid annual leave
- Parental leave
- Sick leave ( up to DKK 4,465 per week )
- Workers compensation insurance
Overtime Pay
Workers in Denmark typically receive pay at a rate of 150% if they work up to three hours over the standard eight-hour day. If their excess work is more than three extra hours, they can receive compensation at a rate of 200%.
Severance Pay
In general, there are no statutory requirements for severance pay in Denmark. Employees in continuous employment for 12 to 17 years are entitled to a one-to-three-month severance payment.
Remote or Office Working Costs
Does your remote Danish team need digital hardware or software set up to do their jobs? If you bring on team members remotely, you may have added costs like high-speed internet service, upgraded electronics, printers, or higher-volume servers.
A majority of Danes (86%) speak English as a second language. Since it is mandatory for Danish students to learn English starting in elementary school in the public system, you can expect strong English speakers with a high level of experience, so you likely won’t need translation software. Regardless, it’s good to think about whether this software could help you hire from and expand into other European countries.
Consider whether you are hoping to hire a small or large number of Danish workers. If there’s a significant team, it could be worth investing in an office or coworking space so your team can access the technologies they need to perform successfully and to build connections with their coworkers.
Total Cost of Hiring
Let’s say you wanted to hire an employee in Denmark at a salary of 100,000 USD (686,280.00 DKK).
Salary: $100,000 Gross pay
Employer social security contributions: USD 2028.47 (13,921 DKK)
Bonuses and other costs: Optional. Let’s say you included a 13th-month bonus. On a 100,000 yearly salary, this extra month would amount to USD 8,333 (57,187.71 DKK).
Total: 110,361.47 Gross pay
It is important to note that this is a minimum payment, as generally, you will attract higher-skilled and competent candidates by including bonuses or other paid benefits.
How Borderless Can Help
Although it can seem like all these costs add up quickly, we want to make your hiring process stress-free. Onboarding your new Danish team should feel like a breeze. It’s an investment, but it’s a major step for your company that you deserve to feel confident about.
At Borderless, we help you hire employees from Denmark and over 150 different countries if you are looking to grow your team. Book a demo to see how we’ll help you hire top global talent quickly and compliantly.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
