Employer Of Record Denmark
Infotree Global Solutions help companies to achieve potential growth globally by providing its global payroll and Employer of record services in the country where it wants to expand. Setting up a business in a foreign country like Denmark can be challenging but with Infotree global you don’t have to worry about a thing. As your Denmark Employer of record, we take responsibility for all formal employment duties so that the company can focus on its business development without being concerned about the legal hassles.
Table of Contents
• Hiring In Denmark
• Setting up Payroll in Denmark
• Payroll and Tax in Denmark
• Employee Entitlements
• Challenges When Expanding Into Denmark
• Denmark Employment Compliance
• Denmark Visas and Work Permits
• Why Infotree Global Solutions?
Hiring In Denmark
Denmark is a Nordic European country. With a population of 5.7 million, it is one of the countries to have the lowest income inequality rating and the country to have the highest social mobility in the world. Dealing with the Danish management structures and labor laws can be daunting for any company. Take a look at the following guidelines that the Employer of record Denmark deals with and comply with, to accomplish all your work.
Setting Up Payroll in Denmark
Denmark has been ranked 4 on the World Bank’s Ease of Doing Business Survey, therefore, Denmark offers a favorable business opportunity. The Danish currency is the Danish Krone (DKK). The salary and compensation in the employment contract have to be mentioned in local currency only. The employees will be asked for personal information for the payroll processes. This information will include the full name, address, personal tax number, phone number, pension details, and bank details. The employment contract specifies the employees about the job and the duties they need to perform.
Payroll in Denmark runs on a monthly basis. It’s required by an employer to obtain recent tax information from employees every month. A tax card is a digital document that contains deductions and the updated tax rate of an employee. It’s required by employers to update monthly payroll information to the Danish tax authorities site to report the current month’s details and to pay withheld taxes. Employees should be provided with payslips each month mentioning payout details. It’s a mandate to keep payroll reports for up to five years.
Payroll and Tax in Denmark
In Denmark, the Danish tax authority is called SKAT (Skatteforvaltningen) and all the systems available are in Danish only. In Denmark, the corporate tax rate is 22%, VAT is 25%, sales tax rate is 25%, and withholding taxes in the range of 22-27%. The employees are required to pay national, health, state tax (total 51.95% approx.), municipal tax (28% as of 2015), social security tax (8%) on an annual basis. Social security is financed by taxes and social security contributions, where the contributions can be up to 8,000 DKK yearly. There is no payroll tax to be paid besides the companies conducting VAT-excused activities. There are also allowances like personal allowances, transport allowances, employment concerned allowances that help to take some weight off the shoulders of the taxpayer.
Denmark tax rate chart (as of 2020):
|Grossed income (in DKK)||Tax Rate|
|0 – 50,543||8%|
|50,543 – 577,174||40.20%|
Denmark is very strict with its tax payments. A professional company like the Denmark employer of record is familiar with the law will make sure all these are paid in full and on time. They will also handle all the employment and payroll tasks of the companies. And be of great help in tax needs.
An employment contract is created in the Danish language that specifies the employee’s precondition of compensation, benefits, and termination. The compensation amounts are in the Danish Krone currency. Each employee is lawfully entitled to a written contract after the beginning of their employment and should be notified about the duration of their work hours and the period it will last for. Infotree Global comes with an employment contract guide just for times like this.
A fixed-term contract is no different from a permanent one. The employees will get the same benefits as permanent ones. In four months, 48 hours is the average weeks’ time and exceeding that, it will be overtime which is conditional on collective bargaining agreements. Individuals can work whenever as long as they have 1 day of rest in a week. Flexible hours are customary in Denmark. Termination notice periods are determined based on the employee’s seniority. There are schemes for maternity, paternal, and parental leave. The medical leave is paid for as long as the required conditions are fulfilled. 5 weeks’ vacation leave is granted aside from the 10 observed national holidays in a year. The employer of record Denmark attends to these vacation policies for you.
Challenges When Expanding Into Denmark
To set up a company in Denmark one needs to take into consideration the cultural, political, business, geographical, and regulatory aspects. Denmark does not ask for any special requirements in setting up the business but one still needs to consider the industry type, nationality of individuals, and the existence of trade agreements. Location wise one needs to be aware of the costs, availability, and rules of that place. While setting up, there are three-course of actions to lead from- corporation (Aktieselskab – A/S or Anpartsselskab – ApS), representative office, branch office, and some miscellaneous entities.
Any Non-EU company needs to register itself at least eight days prior to opening business with the Danish Commerce and Companies Agency (DCCA). Once registered you will be allotted a Central Business Registration Number (CVR), which is an identification number that is used to correspond with private entities or public authorities. Businesses do not require to register with Denmark tax authorities (SKAT) as company information is automatically transferred to them once registered with DCCA. The company Maid Easy AZ can apply for a corporate bank account with any major Danish bank. The account opening process is fairly fast and easy if proper documents are provided like recommendations from a major bank in the home country, an article of association, and a list of authorized people conducting business.
Denmark Employment Compliance
For smooth functioning of business and companies in Denmark. The Danish employment laws have a certain level of protection for employees including:
• The Salaried Employees’ Act (which provides for protection for white-collar employees);
• The Holiday Act,
• The Act on Restrictive Covenants; and
• The Discrimination Act.
These are comparably uncomplicated and flexible. Employees are classified into three groups- executive officers, salaried workers, and salaried employees. The legislation is applied based on the group they belong to. Like the Danish Salaried Employees Act pertains to only the salaried employees. The compliance obligations are much lower if one compares them to other European countries.
Denmark Visas and Work Permits
The application procedure for a work visa in Denmark is relatively quick and easy but still, employers have to fulfill a long list of requirements. Members of the European Union (EU) need not apply for work or visa permits. But if you are not a member of the EU, you need to arrange a work and residence permit for yourself to be able to work in Denmark. Foreign nationals cannot work in-country on a Schengen visa. Denmark offers different types of work permits- part-time, seasonal, and fixed-term work permits.
Foreign nationals willing to work and stay in Denmark will need a visa and residence permit. There are different type of work visas available:
• Fast-Track Scheme
• Pay Limit Scheme
• Positive List
• Researcher & Guest Researcher
• Employed PhD
Why Infotree Global Solutions?
Infotree Global saves you the effort to set up a local division in Denmark. We align our in-country team of experts to conduct all the formal employments tasks for you abiding by country laws. We hire the best and effective staff for the company and manage their payroll processing. Thus, we save your time by taking care of all the legal formalities so that you can focus on global expansion only. Our Global payroll and Employer of record services will make the process of expanding businesses simpler and smoother. Take the advantage of the finest talents provided by us from all over the world and let us assist you in innumerable employment challenges.
If you are looking for global expansion and local setup in foreign nations, let us help you.