Employer of Record in Denmark: what one employee really costs

Questions people ask before booking a demo

How much does an employer of record cost in Denmark?

Statutory employer charges come to about DKK 10,400 a year in fixed contributions - ATP, AUB, Barsel.dk, AES, the financing contribution and compulsory accident insurance - plus a 1% holiday supplement on salary. On a US$70,000 salary that is roughly 3.3% in all, about US$190 a month. Published EOR fees then run from about $199 to $699 per employee per month, so at this salary even the cheapest published fee, $199, is about the size of every Danish statutory charge combined. Because the fixed part does not grow with pay, the statutory side overtakes a $199 fee at a salary just under $80,000.

Why are Danish employer contributions so low when Danish taxes are so high?

Because Denmark collects from the employee, not the employer. Income tax and the 8% labour market contribution are withheld from the salary, and they fund the welfare state that other countries finance through employer social security. What is left on the employer side is a handful of fixed amounts per employee - a pension contribution of DKK 198 a month, a training levy, a parental-leave contribution, occupational disease cover and a financing charge - none of which rises with pay. The employer cost is low; the cost of employing someone at a given take-home is not.

Do I have to pay an 8-12% pension in Denmark?

Not by law. The statutory pension is ATP, the flat DKK 198 a month in the table above. The 8% to 12% occupational pension that appears on most Danish offers comes from collective agreements or the individual contract, not from legislation, which is why it varies by sector. It is real market cost and you will probably have to pay it to hire, but it should be quoted as a benefit you have chosen, not as a statutory charge. Ask any provider which agreement it says obliges the figure.

Is the Danish holiday cost 1% or 12.5%?

Both exist and they are alternatives, not additions. A monthly-paid employee with full pay on public holidays and sick days keeps their salary during holiday and receives a supplement of 1% of pay, under section 16(1) of the Holiday Act. Everyone else gets a holiday allowance of 12.5% under section 16(2), and that 12.5% replaces salary during the holiday rather than adding to it. A quote that shows 12.5% on top of a full monthly salary is counting the holiday weeks twice. Employees earn 2.08 days a month, five weeks a year. Danish law names ten public holidays, listed in the Retail Act since Great Prayer Day was abolished in 2024, but no statute makes them paid days off: time off and pay on those days follow the collective agreement or the contract.

What notice and probation apply in Denmark, and who pays for sick leave?

Probation can be agreed for at most three months, during which the employer gives fourteen days' notice. After that the Salaried Employees Act sets one month's notice in the first six months, three months thereafter, and one month more for every three years of service up to six. Sick pay is the item that surprises foreign employers: a salaried employee keeps full salary while ill and the employer pays it, with municipal reimbursement only after the first weeks - there is no employer contribution that covers it in advance.