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Basic Economic Summary

Denmark is an economy that is known to be highly developed while also setting a mark of a high standard of living. The country performs at the top in measures of health care, education, LGBTQ equality, and democratic governance. The country is a mixed economy classified as a high-income economy by the World Bank with industries that contribute to the GDP such as industrial/manufacturing sector, service sector, pharmaceutical sector, medical equipment sector, and food processing sector. This makes the economy a preferred location for employers as well as employees to grow their businesses and work in a better working environment.


  • Local Languages: Danish, English
  • Capital: Copenhagen
  • Major Economic Hubs: Copenhagen, Aarhus, Odense, Aalborg
  • Capital: Copenhagen
  • Currency: Danish Krone
  • Population (2021): 5.8 million
  • Time Zone: UTC+1 (CET), UTC+2 (CEST, Summer-DST)
  • Date Format: dd/mm/yyyy

Useful Information

  • GDP Per Capita (in USD): 61,063.3
  • Exchange Rate (DKK/USD): 0.16

Local Universities

Top Local Universities

University Rankings
University of Copenhagen Ranking in Denmark: 1

World Rank: 70

Aarhus University Ranking in Denmark: 2

World Rank: 110

Technical University of Denmark (DTU) Ranking in Denmark: 3

World Rank: 150

Aalborg University Ranking in Denmark: 4

World Rank: 280

University of Southern Denmark / Syddansk Universitet Ranking in Denmark: 5

World Rank: 324

Further details about the universities in Denmark can be found on Webometrics.

Salary Data

Average Salary of Jobs (Per Month)

The table below shows the average salaries of some jobs in Denmark. Please refer to Salary Explorer for more information.

Job Title Average Salary (DKK)
Accounting Manager 60,500
Office Manager 33,300
Pilot 68,300
Architect 49,800
Business Analyst 52,200
Business Development Manager 62,500
Project Manager 49,500

An employee working in Denmark on average earns about 40,600 DKK per month. The lowest average could be 10,300 DKK with the highest average being 181,000 DKK. The salary, however, depends upon the profession, location, and the industry the employee works under.

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Employer Payroll Tax

The employer payroll tax is calculated as follows:

Category Amount (DKK)
Mandatory Pension Scheme (ATP) 2,271.6
Contribution to maternity fund 1,150
Industrial injuries insurance, estimated * 5,000
Other public social security schemes, partly estimated 5,300

*Please be informed that the estimated industrial injuries insurance may vary

Employee Payroll Tax

The employee payroll tax is calculated as follows:

Category Amount (DKK)
Mandatory Pension Scheme (ATP) 1,135.8

Employee Monthly Income Tax

Income tax is levied annually as follows:

Taxes Income Basis Tax Rate
State taxes:
Bottom tax Personal income 12.11
Top tax Personal income 15.00
Local taxes:
Municipal tax (average) Taxable income 24.971
Labour market tax Personal income 8.00
Share tax:
DKK 0 to 56,500 Share income 27.00
More than DKK 56,500 Share income 42.00

The employee income tax rates can be found here.

Minimum Wage & Payroll

Minimum Wage

There is no official minimum wage in Denmark. However, the common minimum wage would be DKK 110 per hour.

Payroll Cycle

The employee must be paid at the end of each month


13th month salary

There is no provision for the 13th month salary in Denmark.

Employee Stock Options

There is no provision for employee stock options in Denmark and is mandatory for employers to specify the benefit through the employment contract if the stock options are provided to a certain employee.

Working Hours & Statutory Leave

Working hours

The typical number of working hours in Denmark is 37 hours a week. 

Overtime pay

There is no law regarding overtime pay in Denmark. However, it can be decided in a collective agreement. The typical rate is 150% of regular pay for the first three hours and 200% thereafter.

Public Holidays

Number of public holidays is 10 days. The list of holidays can be found here.


Annual Paid Leave

The holiday year in Denmark runs from 1st September to 31st August and employees can accrue 25 days off each year (2.08 days per day).

Sick Leave

Every worker is entitled to 30 days of paid sick leave provided the worker worked for at least 74 hours during the 4 weeks preceding the illness. 

Parental Leave

Both parents are entitled to leave in the context of childbirth or adoption.

For maternity leave, the pregnant mother is entitled to 4 weeks of leave before the expected due date and is obliged to take 2 weeks after delivery. She is also entitled to a further 12 weeks 

Paternity Leave is also allowed of upto 2 weeks within the first 14 weeks after delivery.

Offboarding & Termination

Termination Process

Unless bound by a collective bargaining agreement, the employer is free to terminate the employment at any time.

Notice Period

The employer notice period is stipulated as per the act on salaried employees as follows:

Severance Pay

There is no statutory severance pay mentioned. However, if a salaried employee has been in employment for more than 12 to 17 years, they are entitled to a severance pay of between 1 to 3 months salary.

Probation period

There is no law regarding probation period in Denmark, however if present in the collective agreement, it must not extend 3 months.


Workers' compensation insurance is mandatory for all employers to provide for and covers all employees including full-time and part-time employees. Danish law states that all employees must be covered by occupational injury insurance i.e. the Workers' compensation insurance. 

The Workers' compensation insurance covers the following:

  • Death of the employee due to work accident or illness wherein the death compensation is paid to the spouse or dependant
  • Disability due to an accident at work
  • Occupational accidents or diseases

Further information on the Workers’ Compensation Insurance in Denmark can be found here.


The standard VAT rate in Denmark is 25%

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