Contracting in Denmark

With just a few clicks, you can calculate your take-home pay in Denmark and choose the optimal solution to get the most out of your contract. Use the app below to calculate your possible net retention in Denmark.

Employment

This is a standard form of employment – you officially work for a company who pays you a monthly salary.

Pros:

• Enrollment in the social security system, which includes a pension plan, paid time off and sick leave.
• Stable monthly paycheck.
• Income tax is deducted from your salary, so you do not need to worry about calculating how much you have to pay.

Cons:

• Lower retention rate compared to other solutions due to social security payments.
• More and more companies are looking towards independent contractors rather than employees, so it could be more difficult to find such employment, especially as a foreigner.
• Less flexibility – you do not get to choose the projects that you can work on, you must work on the tasks assigned to you by your employer.
• Formal working hours – you may have to work “9-5”, as determined by your employment contract, rather than being able to determine your own working hours.

Self-Employment

This type of employment means that you are a freelancer – a company pays you to do a specific job, and you get remunerated, but you are not an official employee.

Pros:

• Possibility of gaining a higher rate of pay.
• Freedom to choose projects that interest you.
• Freedom to choose your own working schedule.
• Can deduct certain expenses, dependent on your business activities.
• VAT registration is optional if you earn less than 50,000 DKK per year.

Cons:

• No social security benefits.
• You will need to sort out payments of income tax and social contributions yourself, or you could consider engaging a payroll company like Access Financial.
• Need to pay an extra 25% VAT, and there are no discounted rates.
• Must issue invoices that follow specific rules, and they must remain on file for 7 years.
• There can be a fine line between self-employment and regular employment. If, for example, you end up doing too much work exclusively for a specific company, you could be classified by an audit as falsely self-employed, which can result in very hefty fines and the possibility of some legal action against you/your client.

Denmark Positive List

This is a visa for individuals who work for occupations that are facing a shortage of skilled professionals in Denmark

Requirements:

• Occupation must be of high demand
• At least a Bachelor’s degree.

Pay Limit Scheme

This visa is for individuals who have a very highly paid offer from a Danish employer.

Requirements:

• Job offer from an employer in Denmark
• Yearly salary of at least 375,00 DKK

Green Card Scheme

This is a residence permit that allows you to move to Denmark to look for a job. You do not need to get a separate work visa, however, you are not allowed to be self-employed.

Requirements:

• You need to obtain at least 100 points, which are gained depending on your education, language skills and adaptability.

EU, EAA, Switzerland

You do not need a visa or a permit to live and work in Denmark. However, if you intend to stay for more than 90 days, you need to apply for a Danish Residence Card (eID) at the local municipality.

Other Foreign Nationals

If you are a third country national, you need a visa and a work permit in order to live and work in Denmark (the work permit allows you to live in the country). You can apply for the work visa online, either yourself or by granting your employer a power of attorney. This visa can be valid for up to 4 years.

As an Employer of Record, we conclude an agreement with you and your client. We become your legal employer while your client maintains control over your work relationship, ethics, tasks, and daily responsibilities.

Why is this needed?

Not all companies have registered legal entities in the countries where they need employees. Moreover, not all companies want to bother with payroll, work permits, taxes, social security, and in general paperwork when employing workers. That’s why it’s more profitable and convenient for them to turn to an EOR provider (such as Access Financial) who already has local experience and can take on all the worries associated with hiring employees and be responsible for their paperwork and compliance.

Here are just some of the services we offer in Denmark:

• Assistance in obtaining the necessary visas/work permits for employees from third countries.
• Registering employees with the tax and social security office.
• Providing consultations on Danish labour regulation & benefits.
• Setting up the Payroll system compliantly.
• Submitting wage tax returns and national insurance forms.
• Keeping our clients up-to-date and compliant with changes in Danish regulations.

We provide a full set of services in Denmark, allowing corporate clients, recruitment agencies and professional contractors to operate in an optimal manner, while ensuring that all local compliance obligations are taken care of.

Access Financial offers the following services in Denmark:

• Contract Management
• Outsourced Payroll
• Employer of Record (EOR)
• Work Permits & Immigration Assistance