US company hiring in Denmark: contracts, costs and permits

Usually because the person it wants is already there. A US software company finds a senior engineer in Aarhus, a product lead in Copenhagen or a sales manager who knows the Nordic buyers, and the question becomes how to put that person on payroll without opening an office. The answer has to work under Danish employment law, because the job is performed in Denmark, whatever the hiring company’s home state.

Pay levels help explain the interest. Statistics Denmark’s structural earnings figures for 2025 put standardised monthly earnings for private-sector software developers at DKK 70,020, a figure that includes pension, holiday pay and benefits; across the whole private sector the average was DKK 54,894. Those are high salaries by European standards, but the employer’s statutory charges on top of them are small, as the cost section below shows.

What does not work is running the hire as if they sat in a US state. There is no at-will employment for salaried staff, holiday follows a statute with its own calendar, and tax is withheld through the Danish system each month. Every option below starts from those facts.

The calendar is different too. Denmark had 7 public holidays falling on weekdays in 2026, from New Year’s Day through Easter, Ascension Day and Whit Monday to Christmas Day, and salaried staff are paid in full on them. Constitution Day on 5 June is not a statutory public holiday, although many workplaces give time off under agreements or custom. Put the Danish dates in the team calendar before the first quarter’s planning, not after the first missed meeting.

There are two doors. One is a Danish company owned by the US business; the other is an employer of record. The usual company form is the private limited company (anpartsselskab, ApS), with minimum share capital of DKK 20,000. Registration goes through virk.dk to Erhvervsstyrelsen, the Danish Business Authority, no later than 2 weeks after the company is founded, and the digital fee is DKK 670. A branch (filial) of the US parent is another option at the same fee.

Registration is only the start. The company then registers as an employer for A-skat and the labour market contribution, sets up monthly eIndkomst reporting, takes out work-injury insurance, keeps accounts and an annual report, and pays 22% corporate tax on its profits in 2026. For a team of one or two, that is a lot of structure around a small payroll.

An employer of record takes the employer’s place in the Danish contract instead. We sign as employer, run payroll in DKK and make the employer filings, while you set the work, the goals and the day-to-day management. Our comparison of EOR versus a Danish ApS goes through the trade-off in more detail, including the headcount at which owning an ApS starts to pay off.

The biggest change is that the paperwork is set by statute and has deadlines. Ansættelsesbevisloven, the Danish statute on written terms, entitles the employee to the essential terms in writing within 7 calendar days of starting: who the parties are, where the work is done, the job, the start date, any probation, pay and pay dates, and normal working hours. Notice periods, paid leave and any collective agreement follow within a month.

Most office hires will be salaried employees (funktionærer), and so fall under Funktionærloven, the Salaried Employees Act. That brings rules a US manager will meet early:

• A trial period capped at 3 months, with 14 days’ notice from the employer while it lasts.
• Employer notice that starts at 1 month, becomes 3 months after half a year, and gains a month at every third anniversary until it reaches 6.
• Full pay on sick days, with the employer paying for the first 30 calendar days of absence before municipal benefit refunds start.
• 25 days’ paid holiday each year, as set by the Holiday Act (Ferieloven), with a 1% holiday supplement on top.

Two operational rules catch US companies out. Since 1 July 2024 every employer must record each employee’s daily working time in an objective, reliable and accessible system and keep the records for 5 years, unless the person sets their own hours and the contract says so. And dismissals must be reasonably justified; how that compares with at-will employment is covered in at-will against Danish notice rules.

Parental leave is longer than most US policies, and much of it is funded outside the payroll. Parents share up to 52 weeks of state parental benefit per child. From the first day of maternity leave until the child is 14 weeks old, a salaried mother must receive no less than half her pay, with the state benefit for that period going to the employer as a refund; Barsel.dk then refunds private employers part of the remaining salary cost.

Very little in statutory charges, because nothing in Danish law levies employer social security as a share of salary. What the employer does pay is a short list of small flat sums for each person: the employer’s share of the ATP pension, the training fund AUB, the parental-leave fund Barsel.dk, a financing contribution, a holiday-fund admin charge, and an occupational-disease contribution to AES that depends on the company’s branch.

On a base salary of DKK 660,000 in Copenhagen (DKK 55,000 a month), gross pay including the 1% holiday supplement is DKK 666,600 for 2026. Statutory items add DKK 8,202 (roughly 1.2% on top of gross), bringing the yearly employment cost to approximately DKK 674,802, with work-injury insurance and the EOR fee still to add. The fee for this service is from €599 per employee per month. A month-by-month view and the calculation behind it are in FICA compared with Danish employer costs.

Pension is where offers differ. Beyond ATP, Danish law does not oblige an employer to fund a pension; any occupational scheme is set by an overenskomst or written into the contract. Candidates often discuss pay as salary plus pension, so decide early whether your offer includes an occupational scheme and say so in writing.

Two items sit outside the DKK 8,202. Work-injury cover is compulsory: the Work Injury Act obliges each employer to buy accident insurance for its people from a private insurer, priced by the market. And the holiday supplement is cash flow to plan for: for the example salary, DKK 6,600 a year, most of it paid with May salary and the rest in August.

Income tax on salary is A-skat, withheld each month using the employee’s electronic tax card (skattekort). Skattestyrelsen, the Danish Tax Agency, builds the card from the employee’s preliminary income assessment and gives a withholding rate (trækprocent) plus a monthly allowance. The employee’s 8% labour market contribution (arbejdsmarkedsbidrag, AM-bidrag) comes off first. If no tax card is available, the employer has to withhold 55%.

A new arrival gets a tax card after registering for a CPR number, or by applying for a personal tax number if the stay is short. Skattestyrelsen puts the wait for a preliminary income assessment at roughly two weeks once the application is complete, so the first payroll date should leave room for it.

For the DKK 55,000 monthly salary above, a standard month in 2026 leaves about DKK 35,519 in the employee’s account. The deductions are AM-bidrag (DKK 4,392), A-skat (DKK 14,990) and the employee’s ATP share (DKK 99). May and August pay is higher because the holiday supplement is paid with them.

Each month the employer files every person’s pay, tax, AM-bidrag and ATP with the income register through eIndkomst. Smaller employers file and pay by the 10th or so of the month after, which put September 2026 payroll at 12 October. The quarterly employer levies arrive as a single invoice from Samlet Betaling. All of it runs in kroner; there is no option to run Danish payroll in dollars.

A US citizen cannot start a Danish job without a combined work and residence permit, and the EU Blue Card is not available because Denmark does not take part in it. Most US hires go through beløbsordningen, the Pay Limit Scheme. Its 2026 condition is a guaranteed salary of DKK 552,000 or more per year (DKK 46,000 monthly). The DKK 660,000 salary above clears it. The employee must have a Danish bank account in their own name for the salary, and the terms must be in line with Danish standards.

SIRI, the Danish immigration authority for work permits, decides applications through nyidanmark.dk. Its published norm is 1 month per case, sometimes up to 3, and the fee is DKK 6,810. No one can promise the outcome. Our guide to the work permit routes in Denmark covers the alternatives.

A smaller group can use forskerskatteordningen, the researcher and key-employee tax scheme. It replaces normal income tax with a flat 27% on cash pay, AM-bidrag still on top, for a total of up to 84 months. The 2026 entry bar is DKK 65,400 a month in salary, the person must not have been liable to Danish tax at any point in the last decade, and further tests apply, so it is a bonus for some candidates, not a feature of every offer.

Start with the person, not the structure. Confirm where the candidate lives, whether they need a permit, and what they expect in salary, pension and notice. Then decide between your own ApS and an EOR, based on how many people you plan to employ in Denmark over the next two years and whether you want a Danish business there in its own right.

If you go the EOR route, read the EOR process in Denmark for the full sequence from signed offer to first payslip. In short: we issue the contract, the employee’s tax card is in place before the first pay run, written terms go out within 7 days, and payroll is reported through eIndkomst each month. What we take on and what stays with you is explained in employer of record explained for Denmark.

When you are ready, Employer of Record Denmark can price a specific hire from the salary and start date you have in mind.