Expanding your business to Denmark? Utilizing an Employer of Record (EOR) service simplifies the process of hiring and managing employees in this vibrant market. By partnering with Stipenda, you can effortlessly handle payroll, benefits, taxes, compliance, and more, allowing you to focus on growing your team in Denmark.

Why Choose an EOR in Denmark?

When hiring in Denmark, companies face two main options: establishing a legal entity in the country or collaborating with a global employment solutions provider that offers EOR services. Using an EOR allows you to bypass the complexities of local employment laws and ensures compliance from day one. According to the Danish Business Authority, employing in Denmark through an EOR can save businesses up to 40% in administrative costs compared to setting up a local entity.

The Benefits of Partnering with Stipenda

Stipenda acts as your EOR in Denmark, allowing you to hire and manage your workforce without the hassle of navigating local regulations. Here’s how we can help:

• Simplified Payroll Management: We handle payroll for your employees in Denmark, ensuring timely payments on a monthly basis.
• Comprehensive Benefits Packages: Our packages cater to local employee needs, including health insurance, dental and vision coverage, mental health support, and retirement plans.
• Compliance Assurance: We keep your business compliant with Danish labor laws and regulations, mitigating risks associated with non-compliance.

Employment Law Overview in Denmark

Danish employment law is characterized by its emphasis on collective bargaining agreements, which govern nearly all employment contracts. According to a recent OECD report, about 90% of employees in Denmark are covered by collective agreements that outline pay, benefits, and working conditions. Key legislation includes:

• Danish Salaried Employees Act: Covers the rights of salaried workers.
• Holiday Act: Mandates five weeks of paid vacation per year.

Given this framework, employing staff in Denmark is a significant commitment that requires careful consideration and expert advice.

Understanding Minimum Wage and Payroll Cycle

Denmark does not have a statutory minimum wage; however, collective agreements set effective minimum wages at around 110 DKK per hour. This varies by industry and role, so it’s essential to refer to the specific agreements relevant to your business.

For clients using Stipenda, employee payments are processed monthly, on or before the last working day of each month. This predictable payroll cycle helps businesses manage cash flow effectively.

Onboarding Employees in Denmark

Onboarding new employees in Denmark is efficient with Stipenda. The minimum onboarding time is just three working days, provided that all necessary information is submitted via our platform. Note that additional time may be required for Right to Work assessments for non-nationals, potentially adding three extra days.

Public Holidays and Leave Entitlements

Denmark offers 10 public holidays each year, and employees are entitled to various types of leave, including:

• Sick Leave: Full pay for up to 30 days, with an application for sick pay required thereafter.
• Parental Leave: Up to 32 weeks of paid leave, extendable to 46 weeks under certain conditions.
• Maternity Leave: Four weeks of pregnancy leave before birth and at least 14 weeks of maternity leave afterward.

Competitive Benefits Packages

To attract top talent, Stipenda offers competitive benefits tailored to local standards. Research indicates that 90% of employers in Denmark provide supplemental health insurance, enhancing access to healthcare options and reducing wait times.

Typical Benefits Include:

• Health, dental, and vision insurance
• Mental health support
• Retirement contributions (averaging 12% of the employee’s annual salary)
• Life and disability insurance

For more information on our benefits packages, you can start onboarding your first employee with Stipenda today.

Cost of Employment in Denmark

Employers in Denmark face various costs associated with employee benefits and taxes, including:

• Employer’s Reimbursement System (AUB): 2,791 DKK
• Danish Labour Market Supplementary Pension Scheme (ATP): 2,272 DKK
• Occupational injury insurance: 1,176 DKK

These costs are crucial for budgeting and planning your workforce strategy in Denmark.

Navigating Employment Termination

Terminating employment in Denmark requires written notice and must comply with statutory notice periods based on the length of employment:

• Less than 6 months: 1 month
• 6 months to 3 years: 3 months
• 3 to 6 years: 4 months
• 6 to 9 years: 5 months
• More than 9 years: 6 months

For professional legal guidance, partnering with an EOR ensures adherence to local laws and minimizes potential risks.

Contact Us for EOR Services in Denmark

Expanding your business into Denmark doesn’t have to be complicated. Partnering with an EOR like Stipenda streamlines the process, allowing you to focus on growth. If you have any questions or need assistance, reach out to us:

• Email: sales@stipenda.com
• Europe: +44 (0) 330 380 0161
• US: +1 800 910 7847

With a robust legal framework, strong labor protections, and a highly skilled workforce, Denmark is an attractive market for businesses looking to expand. By utilizing EOR services, you can ensure compliance, streamline payroll, and attract top talent with competitive benefits. Let Stipenda guide you through the process of employing in Denmark, making your expansion seamless and successful.