What is an employer of record?
An employer of record is a third party that serves as the legal employer of your supported employees. While your team manages day-to-day tasks and performance, our Employer of Record (EOR) solution takes on the legal responsibilities of employment, including contracts, payroll, taxes, and statutory benefits. This simplifies the expansion process while ensuring compliance with local labor laws and regulations.
Employment Guide to Hiring in Denmark & Greenland
Explore the topics below to learn everything you need to know about hiring employees in Denmark & Greenland.
Hiring in Denmark and Greenland
Employee agreements
In Denmark, written employment contracts are required for employees working more than eight hours per week over a four-week period. These contracts must detail key terms including salary, working hours, holidays, and notice periods. Greenland typically follows similar practices, guided by Danish labor standards.
Probationary periods
Employers in Denmark can include a probation period of up to three months for salaried employees. During this time, notice periods typically run around 14 days. Greenland mirrors this structure, but local agreements can vary in detail.
Average working hours
The standard workweek in Denmark is 37 hours, and Danish labor laws emphasize work-life balance. Employees in Greenland generally follow similar schedules, though variations exist by industry and local agreement.
How an employer of record helps with the hiring process
Working with an EOR in Denmark enables companies to avoid entity setup, reduce compliance risk, and onboard talent more efficiently. Velocity Global’s EOR solution ensures full compliance with Danish and Greenlandic labor laws, so your team can focus on growth—not legalities.
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Payroll in Denmark and Greenland
Payroll cycles
Most employees in Denmark are paid monthly, typically on the last banking day of the month. Greenland follows a similar monthly payroll cycle.
Wages
There is no statutory minimum wage in Denmark or Greenland. Instead, wages are often governed by collective bargaining agreements (CBAs) negotiated between trade unions and employer associations.
Bonus payments
Bonuses are not mandated by law but are commonly offered as part of a competitive compensation package. Performance-based and annual bonuses are the most common types.
How an EOR helps run payroll
Velocity Global’s EOR solution handles everything from gross-to-net salary calculations to on-time, compliant payroll and tax withholdings. Our in-country teams understand local requirements and automate complex processes, helping companies avoid costly penalties.
Taxes in Denmark and Greenland
Tax due dates
In Denmark, personal income tax returns are generally due by July 1 of the year following the income year. In Greenland, the tax year follows the calendar year, with filings typically due around May 1.
Tax thresholds
In Denmark, individuals are subject to progressive tax rates, with a top marginal rate of about 55.9%, including local and national taxes (Taxation in Denmark). Greenland applies a flat-rate income tax, typically ranging from 42% to 44%, depending on the municipality.
Health insurance
Denmark provides universal health care funded through taxes. All residents, including foreign workers with valid permits, are entitled to free access to the public healthcare system. Greenland also provides tax-funded healthcare.
Pensions
Employer pension contributions in Denmark are not required by law, but are often mandated through CBAs. A common arrangement includes a 12% employer contribution to occupational pension schemes. Greenland follows similar practices, usually negotiated through labor agreements.
How an EOR helps calculate and manage taxes
Velocity Global ensures accurate and timely tax filings, as well as compliance with evolving tax regulations. Our experts manage payroll taxes, pension contributions, and reporting requirements for your supported employees.
Calculate payroll contributions in Denmark & Greenland
Leave Entitlements in Denmark and Greenland
Annual leave
Employees in Denmark are entitled to five weeks (25 days) of paid vacation each year, as outlined in the Holiday Act (Ferieloven). In Greenland, employees are entitled to five weeks of paid leave by law.
Parental leave
New parents in Denmark are entitled to 52 weeks of combined maternity, paternity, and parental leave, with various compensation rates depending on the type of leave. Greenland offers a 17-week maternity leave, with some parental leave options depending on local policies (The Ministry of Employment).
Sick leave
Employees in Denmark receive full pay for up to 30 days of illness, after which the state may provide sickness benefits. Greenland provides similar protections, typically outlined in collective agreements.
Holidays
Denmark recognizes 11 public holidays, including Christmas Day and Constitution Day. Greenland observes national holidays such as National Day (June 21), alongside select Danish holidays.
How an EOR helps manage leave and PTO
Velocity Global ensures that all leave entitlements are tracked, documented, and processed in compliance with local laws and collective bargaining agreements (CBAs). From vacation accrual to parental leave support, we help companies manage time-off with ease.
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Employee benefits in Denmark and Greenland
Federal benefits
Statutory benefits include healthcare, paid leave, and unemployment insurance contributions. These benefits are typically funded through employer taxes and mandatory contributions.
Supplemental benefits
Employers often enhance employee packages with private healthcare, gym memberships, meal vouchers, and stipends for phone or transportation. Supplemental pensions and life insurance are also common among white-collar roles.
How an EOR helps administer benefits
Velocity Global’s EOR solution enables employers to offer attractive benefits without managing multiple vendors. We administer both statutory and supplemental global benefits through local partnerships and our Global Work Platform™.
Termination policies in Denmark and Greenland
Notice periods
Danish employment law mandates notice periods that vary by tenure. For example, employees with six or more years of service must receive a four-month notice. Greenland generally follows similar guidelines.
Severance pay
There is no general statutory requirement for severance pay in Denmark, unless it is stipulated by contract or a collective bargaining agreement. However, employers must still observe the correct termination process to avoid claims of unfair dismissal.
How an EOR helps process terminations
From preparing final payslips to ensuring proper notice and documentation, Velocity Global supports compliant offboarding. Our in-country experts help mitigate risk while providing a smooth experience for departing employees.
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Can I hire contractors in Denmark instead of employees?
Yes, but misclassifying talent can lead to penalties. An EOR helps companies hire talent compliantly, especially when long-term or full-time work is involved.
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Do I need to establish a local entity to hire in Greenland?
No. Velocity Global’s EOR solution enables hiring in Greenland without the need to set up an entity.
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Are bonuses mandatory in Denmark?
No, but they are commonly used to attract and retain top talent, particularly in the tech and finance sectors.
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Does Velocity Global offer support in both Danish and Greenlandic?
Yes. Our local teams offer multilingual support and understand the unique nuances of both regions.