Notice period in Denmark: Funktionærloven notice and severance

For a salaried employee in Denmark, the employer must give one month’s notice during the first six months of employment and three months once the person has passed six months. After that, one further month is added for every third year of service, until the notice reaches six months, which is the maximum. In each case the notice runs to the end of a calendar month.

Those rules come from § 2 of Funktionærloven, the Salaried Employees Act, which governs salaried employees (funktionærer). They are minimums. A contract can promise longer notice, and many senior contracts do, but no contract can promise less: section 21 bars any term that leaves the employee worse off than the Act.

Employees who fall outside Funktionærloven, often hourly-paid workers, take their notice from a collective agreement (overenskomst) or their contract instead. The rest of this guide follows Funktionærloven, since that is the Act that sets notice by statute.

One calculation catches people out. Because notice runs to the end of a month, the date you hand over the letter matters: the letter must be in the employee’s hands before the month preceding the notice period has ended.

Before working anything out, read the contract itself. It may give the employee longer notice than the Act, it may contain the 120-day clause for long sickness, and it may carry a non-compete or customer clause that has its own consequences on exit. Each of those changes the numbers, and none of them shows up if you only apply the statutory formula.

Notice from the employer must be in writing, and if the employee asks, the reason for the dismissal must be given in writing too. A spoken conversation, however clear, does not start the notice period.

• Hand the letter over in good time: a letter received on 31 October starts notice on 1 November, one received on 1 November starts it on 1 December.
• Keep proof of when the employee received it; a signed copy handed over in person or an email the employee confirms receiving both work.
• Where probation lasts no longer than three months, 14 days from the employer is enough while it runs.
• Notice of at least three months applies where the employee lives in housing that comes with the job.
• Give written reasons if asked. A vague reason makes it harder to show the dismissal was reasonably justified.

The employee’s side is simpler: a single month, which also expires at a month end. Any longer employee notice in the contract must be mirrored by the same extension for the employer, so a one-sided lock-in does not hold. Walking out without notice costs the employee at least half a month’s salary in damages to the employer, special circumstances aside.

While working out notice, the employee keeps full pay and benefits and is entitled to time off to look for new work without losing salary, under section 16 of the Act.

Danish law does not list acceptable reasons for dismissal. Instead, for an employee with at least one year’s service, Funktionærloven section 2 b asks whether the dismissal was reasonably justified by the employee’s conduct or by the company’s circumstances (rimeligt begrundet). The Act names those two sources and stops there; it is the facts of each case that decide. A decision with no traceable reason in either is where claims start.

If a court or arbitration finds the dismissal unjustified, the employee receives compensation on a scale set by the Act:

• as a baseline, a maximum of half the salary for the notice period;
• up to three months’ pay where the employee is 30 or over;
• up to four months’ pay after 10 years of service;
• up to six months’ pay after 15 years of service.

Take an employee aged 34 with four years’ service whose dismissal is later found unjustified: the ceiling is three months’ pay, and the court sets the actual figure within it. This compensation is separate from notice and from severance. Collective-agreement disputes belong before the Labour Court (Arbejdsretten) or an industrial arbitration panel rather than the ordinary courts. For the employer, the practical step is a paper trail: performance conversations written down, warnings given in writing with time to improve, and business reasons for a redundancy recorded before the decision is made.

Statutory severance (fratrædelsesgodtgørelse) under Funktionærloven section 2 a is one month’s pay once the employee has been continuously employed for 12 years, and three months’ pay after 17 years. Before 12 years, the law gives no severance at all. It is paid when the employer dismisses the employee, or summarily dismisses them without good cause.

You will see other ladders quoted, with steps at 12, 15 and 18 years. The consolidated text of the Act uses 12 and 17 years, so use those when you budget.

Several other amounts usually fall due on the last day:

• Holiday not yet taken is settled as holiday allowance of 12.5% of the relevant pay, under section 16(4) of the Holiday Act.
• An employee paid partly by profit share, commission or a similar bonus who leaves during the year keeps a proportionate slice of it (Funktionærloven § 17 a).
• Any non-compete or customer clause with compensation attached triggers a lump sum covering the first two months, paid when the person leaves.

On tax, the first DKK 8,000 of a severance or similar compensation payment is tax-free in 2026, and the same amount applies in 2027. Above that, the sum is taxed as income through the normal withholding.

The settlement is reported like any other pay. Salary to the end of notice, compensation and the pro-rata bonus are reported through eIndkomst like ordinary salary, after A-skat and AM-bidrag, while holiday allowance for untaken days is paid to FerieKonto, from where the employee draws it through the Feriepengeinfo self-service.

Plan the main holiday as well. If the notice period is three months or less, the employer cannot order the employee to take main holiday during it, so untaken days are more likely to end up in the final settlement.

Some dismissals carry extra risk because the law reverses the burden of proof. If you dismiss an employee who is pregnant, on maternity, paternity, parental or adoption leave, you must prove that the reason had nothing to do with it, under the Equal Treatment Act. If you cannot, a court can set the dismissal aside or award compensation. A salaried woman dismissed before or during her maternity leave, up to 14 weeks after the birth, is also entitled to full pay through the notice period.

The same reversed burden protects employees who take care leave (omsorgsorlov) or force majeure absence, and those who assert their rights under the Written Terms of Employment Act. Dismissal on discriminatory grounds such as age, disability or religion is prohibited outright. A salaried employee called up for military service cannot be dismissed for that reason. Care leave itself is short, 5 working days each year for caring for a family or household member who is seriously ill, but the protection attached to it is real.

Long sickness has its own route: the 120-day rule lets you dismiss on one month’s notice if the contract includes it and the conditions are met, which our guide to sick pay and the employer period explains.

At the other end is summary dismissal (bortvisning), which ends the employment immediately and without notice. It is reserved for a gross breach by the employee. If the breach turns out not to be serious enough, the employer must pay damages matching the salary for the notice period, and severance and unjustified-dismissal compensation can come on top. The cost of a mistake is high, so take advice before using it.

Separate rules apply when, within 30 days, an employer plans to dismiss at least 10 people at a workplace with 21 to 99 employees, at least 10% at one with 100 to 299, or at least 30 where there are 300 or more. The employer must consult the employees or their representatives as early as possible, give written information and send a copy to the regional employment council.

The dismissals cannot take effect until at least 30 days after the council has been notified, or 8 weeks where at least half the staff of a workplace with 100 or more employees are affected. Skipping the consultation or notice can cost 30 days’ pay per employee in compensation. For most foreign companies with a handful of people in Denmark these thresholds will not apply, but they matter if a Danish team grows.

Where Employer of Record Denmark employs the person, the commercial decision stays with you: whether a role continues and how a person is performing. We handle the formal steps. We check the notice period against service and the contract, prepare the written notice so that it lands before month end, respond to a request for written reasons, calculate final pay, holiday allowance and any severance, and report it all through eIndkomst.

Talk to us first, before any conversation with the employee. Timing against month end can move the last working day by a whole month, and a protected status you were not aware of changes the risk completely. It helps to send us, at the outset, the reason for the decision, any written warnings or performance notes, whether the person is pregnant or on any form of leave you know of, and whether you want to keep or release a non-compete. Note too that a non-compete lapses if the employer dismisses an employee who has not given reasonable cause, although the lump sum is still payable.

If you are used to at-will employment, the Danish approach takes some adjustment; our comparison of at-will employment and Danish notice rules sets the two side by side. And if you are still deciding on a provider, ask how they handled their last few dismissals, alongside the other points in our checklist for testing a provider. Retsinformation carries the full statute.

Q01How long must a Danish employer give a salaried employee when dismissing them?+

A.One month from the employer in the first six months, three months after that, and one month more for each third year served, capped at six months. Notice runs to the end of a month and must be given in writing.

Q02What notice does a Danish employee owe when resigning?+

A.A single month, finishing at a month end. Longer employee notice is valid only when matched by an equal extension on the employer’s side.

Q03Do Danish employers have to pay severance?+

A.Only after long service: one month’s pay after 12 years and three months’ pay after 17 years under Funktionærloven. Unjustified dismissal can also bring separate compensation.

Q04Can an employer dismiss during probation with short notice?+

A.Yes. Where a salaried employee’s probation lasts no more than three months, the employer can end the contract within it on 14 days’ notice.

Q05Can an employer place main holiday inside the notice period?+

A.Not where the notice is three months or less. Under the Holiday Act, main holiday cannot be imposed during such a notice period, and any holiday left untaken is settled as 12.5% holiday allowance when the employment ends.