UK company hiring in Denmark: what Danish law expects of you

For a UK company hiring someone who already lives in Denmark, Brexit changed very little about the employment itself. The job is done in Denmark, so Danish employment law, Danish tax withholding and the Danish holiday rules apply, exactly as they did before 2021. A UK contract governed by English law does not displace them, and UK PAYE has no role in paying a person who works in Copenhagen or Aarhus.

What changed is the movement of people. UK citizens are no longer EU citizens, so a British employee relocating to Denmark to take the job is treated as a non-EU national and generally needs a work and residence permit, unless they already hold Danish residence rights. That turns a relocation that once needed only registration into an application to SIRI with a salary threshold.

So the real question for a UK firm is practical: who signs the Danish contract and runs Danish payroll each month. One answer is to form a Danish company; the other is to let an EOR employ the person. The rest of this guide assumes you have a candidate and want to know what follows.

A British manager will also notice how much of Danish working life runs through collective agreements (overenskomster). There is no statutory minimum wage; pay floors, and often pension and overtime terms, are negotiated by unions and employer organisations and reopened every 2 or 3 years. Once an employer is covered by such an agreement, it applies to everyone in its scope, union members or not, so check early whether the role you are filling falls under one.

Danish payroll asks the employer to do less arithmetic and more reporting. Income tax (A-skat) comes off each payslip using the withholding rate printed on the employee’s electronic tax card, which Skattestyrelsen calculates from the employee’s own preliminary income assessment. The card gives a withholding percentage (trækprocent) and a monthly allowance; the employer applies them and does not set tax codes or handle reliefs.

Three differences matter most to a UK finance team:

• The employee pays an 8% labour market contribution (AM-bidrag) on the whole salary with no ceiling, deducted before income tax. In law it counts as a tax rather than a social contribution.
• The employer has no percentage-of-pay charge comparable to employer National Insurance. Its statutory items are flat sums per head: AUB, ATP, AES, Barsel.dk and a financing contribution.
• Every month, eIndkomst passes each person’s earnings, tax, AM-bidrag and ATP to the income register, and smaller employers file and pay by around day 10 of the following month.

Without a tax card the employer has to withhold 55%, so the card must be in place before the first pay run. Pay runs in kroner. If your group accounts are in sterling, plan the currency conversion on your side, because the employee’s contract, payslip and tax are all in DKK. For the monthly cycle step by step, read how the Danish payroll process runs.

The Holiday Act (Ferieloven) gives 25 paid days off a year, built up month by month as the employment runs. Its holiday year is 1 September to 31 August, and each day may be used as soon as it accrues and up to 31 December after the year closes, a 16-month window.

Pay during holiday follows one of two models. A salaried employee keeps normal pay while on holiday and receives a 1% holiday supplement (ferietillæg), usually with May and August pay. Hourly-paid and other non-salaried staff instead accrue a 12.5% holiday allowance (feriegodtgørelse), which goes to FerieKonto rather than straight to them.

A UK manager used to setting a company leave year will need to align planning with the Danish one. Main holiday is a block of 3 weeks in a row inside the 1 May to 30 September window, fixed by the employer with a quarter’s warning, and four of the five weeks have to be taken as time off rather than cashed in during employment. Public holidays come on top, and salaried staff are paid for them in full. Our article on the Holiday Act in Denmark sets out what the employer administers.

The contract has to be in writing quickly. Anyone whose average week exceeds 3 hours must get the main terms, on paper or electronically, no later than 7 calendar days after starting, and the rest, such as notice periods and paid leave, within a month. A missed deadline can be expensive: the employee may be awarded up to 13 weeks’ pay, and 20 weeks where the breach is aggravated.

Office staff are usually salaried employees under Funktionærloven, which cannot be varied to their detriment. Employer notice starts at 1 month during the first half-year, jumps to 3 months, and gains another month each time three more years of service are completed, stopping at 6. For a salaried employee the trial period (prøvetid) may run to 3 months, and while it lasts the employer’s notice is 14 days. After a year’s service, an unjustified dismissal can lead to compensation, so the reason matters.

Sick pay is generous and clearly divided. Salaried staff keep full pay when ill. For each absence, the first 30 calendar days are the employer’s cost. From day 31 the municipality steps in with sickness benefit, which reaches an employer still paying salary as a refund of at most DKK 5,085 weekly in 2026. Sickness has to be reported to the employer no later than 2 hours into the working day. Our guide to sick pay in Denmark has the conditions.

A British national without existing Danish residence rights needs a permit before starting work in Denmark. The EU Blue Card does not exist in Denmark, so the routes are national ones run by SIRI. For most professional roles that means beløbsordningen, the Pay Limit Scheme, which for 2026 sets the guaranteed salary bar at DKK 552,000 per year (DKK 46,000 per month). The scheme does not ask for any particular education.

Where pay is lower, a second scheme, the supplementary pay limit, accepts DKK 446,000 a year in 2026, as long as the job was advertised on Jobnet and EURES for at least two weeks beforehand. SIRI’s normal processing times are 1 month and 2 months respectively, each with a DKK 6,810 fee, and wages must go to a Danish bank account that the employee holds personally. Details are on nyidanmark.dk, and our page on Danish work permits covers the Fast-Track Scheme and its 10-employee certification test.

On arrival, a stay longer than 3 months means registering for a CPR number at a permanent Danish address, which in turn produces the health insurance card and opens the way to a tax card. A NemKonto (the account where public payments land) and MitID for digital services follow. Build those weeks into the start date.

One tax point is worth raising before the offer. The researcher and key-employee scheme, forskerskatteordningen, taxes cash pay at 27%, plus AM-bidrag, for no longer than 84 months, yet its 2026 salary bar is DKK 65,400 a month and anyone with Danish tax liability during the past decade is excluded. Most relocating UK hires will miss at least one condition, so treat it as a question to check rather than a promise in the offer letter.

A UK company can register a Danish private limited company (ApS) with at least DKK 20,000 of share capital, or a branch (filial) of the UK company. Either goes through virk.dk to Erhvervsstyrelsen for a digital fee of DKK 670, and an ApS must be filed no later than 2 weeks after it is founded. The company then needs employer registration for A-skat and AM-bidrag, eIndkomst reporting, work-injury insurance with a private insurer, a written workplace assessment (APV), working-time records kept for 5 years, and its own accounts.

That is sensible when Denmark is becoming a real market with several staff. For one to five people it is usually more structure than the payroll justifies. Under the EOR route, the employer named in the Danish contract is us: we sign the contract, provide the written terms, run payroll in DKK, withhold A-skat and AM-bidrag, pay ATP and the other employer contributions, and administer holiday under the Holiday Act. You keep the hiring decision and run the work.

The side-by-side comparison is in EOR versus a Danish ApS, and if several providers are on your list, use our notes on choosing an EOR in Denmark to test them.

Take a salaried hire in Copenhagen on DKK 660,000 a year. Adding the 1% holiday supplement brings 2026 gross pay to DKK 666,600. The employer’s statutory items (AES, AUB, the employer’s ATP share, the holiday-fund admin charge, the financing contribution and Barsel.dk) come to DKK 8,202 in total, roughly 1.2% on top of gross pay. That puts the total employment cost at about DKK 674,802 for the year; work-injury insurance and any occupational pension you offer come on top. In an ordinary month without the supplement, that is roughly DKK 55,700: the DKK 55,000 salary plus DKK 683.50 of statutory items. Budgets built in sterling should use that monthly figure and add the supplement in May and August.

The employee, single and not a church member, takes home about DKK 35,519 in a standard month. That gap between gross and net is driven by AM-bidrag and income tax on the employee’s side, not by employer charges. For a UK team used to employer National Insurance on top of salary, the Danish shape is reversed: the gross salary is higher, and the employer’s additions are small.

The EOR service is billed separately, at prices from €599 per employee per month, and never mixed into the Danish payroll lines. A full breakdown of the example sits in employer cost in Denmark, and the team at Employer of Record Denmark will cost a specific role on request.