Article
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Employer Costs for an Employee in Denmark (2026 Guide)
Employer of record
Global hiring
Author
Jemima Owen-Jones
Last Update
February 05, 2026
Quick answer: What is the total employer cost for a $100,000 salary in Denmark?
For an employee earning $100,000 USD annually in Denmark, employers can expect mandatory employer costs of approximately $15,516 USD per year, bringing total compensation costs to $115,516 USD.
Estimated total employer cost (Denmark): ~15.5% on top of gross salary (example estimate).
Hiring in Denmark can be a great way to access highly skilled talent—whether you’re expanding into the Nordics, building a remote team, or hiring your ideal candidate locally.
But even when two employees earn the same salary, the total employer cost varies by country due to statutory contributions, payroll requirements, and mandatory insurance programs.
This guide provides a ballpark estimate of the mandatory employer cost of hiring an employee in Denmark, using an example salary of $100,000 USD per year.
What’s included in this estimate?
This estimate includes mandatory employer-side statutory costs that may apply when hiring an employee in Denmark, such as:
- Holiday pay (accrued)
- Holiday pay supplement (Ferietillæg)
- Labour market insurance contributions (AES)
- Financing contribution (FIB)
- Maternity contribution (Barsel.dk)
- Education fund contribution (AUB)
- Labour market fund contribution (AFU)
- ATP supplementary pension contribution
- Occupational injury insurance
- Great Prayer Day contribution benefit
- Holiday fund administration fees (where applicable)
What’s not included in this estimate?
This estimate generally does not include additional costs such as:
- Paid annual leave beyond holiday pay accrual
- Sick pay beyond statutory/insured coverage
- Private health insurance
- Employer-provided benefits or allowances
- Bonuses, equity, or commissions
- Equipment and onboarding expenses
- Costs that vary by collective agreements or sector-specific rules
Why employer costs vary in Denmark (and globally)
Employer costs can differ depending on:
- Holiday pay structures and accrual requirements
- Whether additional supplements apply
- Industry-specific agreements and contribution obligations
- Changes in regulation year to year
- Currency exchange rate fluctuations (if you pay in a different base currency)
Estimated employer cost breakdown for Denmark
Below is an estimated breakdown of mandatory employer costs for hiring an employee in Denmark earning $100,000 USD/year.
Example salary used in this estimate
- Annual gross salary: $100,000 USD
- Annual gross salary (approx.): kr. 723,960 DKK
Employer mandatory costs (estimated)
| Employer Cost Category | Estimated Annual Cost (DKK) | Estimated Annual Cost (USD) | Notes |
|---|---|---|---|
| Holiday Pay (Accrued at 12.5%) | kr. 90,495 | $12,500 | Accrued holiday pay paid during vacation |
| AES (Labour market insurance) | kr. 396 | $55 | Unemployment benefit insurance contribution |
| Financing Contribution (FIB) | kr. 571 | $79 | Pension/unemployment administration costs |
| Barsel.dk (Maternity contribution) | kr. 1,350 | $186 | Maternity support contribution |
| AUB (Education contribution) | kr. 3,213 | $444 | Labour market education fund |
| AFU (Labour Market Fund for Secondary Persons) | kr. 7 | $1 | Employment opportunity fund contribution |
| Administration of Holiday Fund | kr. 122 | $17 | Holiday fund administration fee |
| Administration of Frozen Holiday Pay | kr. 19 | $3 | Accrued holiday pay administration fee |
| Ferietillæg (1% holiday appendix) | kr. 7,240 | $1,000 | Additional holiday pay supplement |
| ATP (Supplementary Pension) | kr. 2,376 | $328 | Mandatory supplementary pension |
| Compulsory Occupational Injury Insurance | kr. 3,283 | $453 | Work injury/illness insurance |
| Great Prayer Day Contribution benefit | kr. 3,258 | $450 | Statutory contribution benefit |
| Total Estimated Employer Costs | kr. 112,330 | $15,516 | Total mandatory employer cost estimate |
Total compensation cost (salary + mandatory employer costs)
| Total | DKK | USD |
|---|---|---|
| Gross Salary | kr. 723,960 | $100,000 |
| Mandatory Employer Costs | kr. 112,330 | $15,516 |
| Total Compensation Cost | kr. 836,290 | $115,516 |
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FAQs
How much does an employee cost beyond salary in Denmark?
Beyond gross salary, employer costs in Denmark often include holiday pay accrual, supplementary pension (ATP), occupational injury insurance, and labour market contributions. These costs are a key part of total compensation planning for employers managing payroll and compliance in Denmark.
Do employers need to withhold income tax in Denmark?
Yes. Employers must withhold income tax through payroll under Danish tax rules. While income tax is paid by the employee, correct withholding and reporting is a core part of compliant payroll operations.
What does Danish tax compliance involve for employers?
Danish tax compliance typically includes calculating wages correctly, withholding income tax, applying required employer contributions, and reporting payroll information accurately. This is essential for ongoing payroll and compliance in Denmark.
Are there collective bargaining agreements in Denmark?
Yes. Collective bargaining agreements are common in Denmark and can influence salary levels, benefits, working conditions, and termination terms. Depending on the role and sector, these agreements can increase total employment costs beyond statutory minimums.
What is the Salaried Employees Act in Denmark?
The Salaried Employees Act (Funktionærloven) is a key employment law in Denmark that applies to many salaried roles. It sets rules around employment protections such as termination conditions and can impact HR processes and employment planning.
What notice period applies in Denmark?
The required notice period in Denmark depends on the employment contract, employee category (including whether the role falls under the Salaried Employees Act), and length of service. Employers should clearly document notice terms in the employment agreement.
Is there a minimum wage in Denmark?
Denmark does not have a single statutory minimum wage set by law. Instead, minimum pay levels are established through collective bargaining agreements.
As of 2025, many sector agreements set minimum wages in the range of approximately DKK 110–130 per hour (around €15–17), depending on the industry and role. As a result, wage expectations can vary significantly by sector, job type, and applicable collective agreement.
How many days of paid leave do employees get in Denmark (25 days)?
Employees in Denmark commonly receive 25 days of paid vacation per year, and employers typically fund this through holiday pay accrual. Paid leave is a major cost driver because employees remain paid while not working.
What social security costs do employers pay in Denmark?
Denmark does not use “social security” in the same way as some countries, but employers still pay mandatory labour market contributions, pension-related payments (ATP), and insurance-related costs that support employee protections.
What benefits in Denmark should employers plan for?
In addition to salary, benefits in Denmark often include holiday pay, pension contributions, and protections tied to collective agreements. Employers may also provide additional benefits as part of competitive hiring packages, depending on role and market norms.
Jemima is a nomadic writer, journalist, and digital marketer with a decade of experience crafting compelling B2B content for a global audience. She is a strong advocate for equal opportunities and is dedicated to shaping the future of work. At Deel, she specializes in thought-leadership content covering global mobility, cross-border compliance, and workplace culture topics.
