Hiring or working in Denmark without a Danish company means dealing with Danish payroll, tax, pension and registration rules from day one. An Employer of Record (EOR) takes on that responsibility for you. This guide explains how it works, what it covers and how to get started. Looking for a provider? See our Employer of Record services in Denmark.
Employer of Record meaning
An Employer of Record is a company that becomes the formal, local employer of a person who works for another company. The EOR signs the employment contract, runs payroll, pays taxes and contributions, and makes sure the employment follows Danish rules.
The company the person actually works for, the end client, keeps full control of the work itself: who is hired, which tasks they do and how the day-to-day work is organised. The EOR handles everything administrative and legal around the employment.
You decide who does the work and what they do. The Employer of Record makes sure the employment is set up and run correctly in Denmark.
How an EOR works in Denmark
An EOR arrangement has three parties. Each has a clear role, which is what keeps the setup simple:
- The end client needs work done in Denmark and chooses the person to do it.
- The worker, often an independent contractor or specialist, carries out the assignment.
- The Employer of Record employs the worker locally and takes care of contracts, payroll, tax, pension and registrations.
The end client pays the EOR an agreed amount. The EOR pays the worker a Danish salary, reports to the authorities and handles all deductions. For the worker, it is a normal Danish employment with a payslip, a tax card and pension contributions.
Who uses an Employer of Record?
An EOR is designed for situations where there is work to be done in Denmark, but no reason, or no time, to set up a Danish company. Typical users are:
Independent contractors
Specialists who take on assignments in Denmark and want to be employed locally, with correct tax and pension, instead of invoicing from abroad.
Agencies and consultancies
Recruitment and consulting agencies that place people with Danish clients and need a compliant local employer for those placements.
End clients
Companies that want to bring in a specific person for a project without taking on the employer role themselves, or before they are ready to open a Danish entity.
What the EOR takes care of
A full Employer of Record service covers the entire employment, from the first registration to the last payslip:
- Employment contract under Danish rules, including the terms the law requires an employer to state in writing.
- Monthly payroll: salary calculation, payment and payslips.
- Tax and contributions: withholding and reporting to the Danish tax authorities.
- Pension and ATP contributions.
- Holiday pay under the Danish Holiday Act.
- Work permits and registrations such as CPR registration and the EU residence certificate.
- Deregistration when the assignment ends.
With DenConnect, you also get a dedicated contact who follows the employment from onboarding to the final payroll. See all our EOR services, or read more about payroll for international employees in Denmark.
Payroll and tax in Denmark
Danish payroll is run monthly and reported digitally to the tax authorities. Before salary can be taxed correctly, the employee needs a Danish tax card, which in practice requires a CPR number or a Danish tax number.
Deductions on a Danish payslip
A Danish payslip typically includes a labour market contribution (AM-bidrag) of 8 percent, income tax (A-skat) based on the employee's tax card, and ATP, the statutory supplementary pension. Pension schemes and other agreed benefits are added on top.
Holiday pay
Under the Danish Holiday Act, employees earn 2.08 days of paid holiday per month worked, which adds up to 25 days a year. Holiday is earned and taken concurrently, so the payroll must track it month by month.
Tax rates and contributions depend on the individual's situation and can change from year to year. A correct setup from the first payroll saves corrections later.
Work permits and registrations
Which permits and registrations are needed depends mainly on the worker's citizenship.
Non-EU citizens
Citizens from outside the EU/EEA and Switzerland generally need a Danish work permit before they start working. The application is handled by the Danish Agency for International Recruitment and Integration (SIRI) and requires documentation of the job and its terms. Read more in our guide to work permits in Denmark.
EU/EEA citizens
EU/EEA citizens can work in Denmark without a work permit, but must apply for an EU residence certificate if they stay for more than three months.
CPR number and health card
Once the person has an address in Denmark, they register with the municipality and receive a CPR number and the yellow health insurance card, which gives access to the Danish public healthcare system.
When the assignment ends
Leaving Denmark requires deregistration with the authorities. Doing it correctly makes the final tax settlement straightforward.
EOR or your own Danish company?
Setting up your own Danish entity can make sense for long-term, larger operations. For individual assignments and smaller teams, an Employer of Record is usually faster and simpler.
| Employer of Record | Own Danish company | |
|---|---|---|
| Setup | No company to register | Company registration, bank, payroll system |
| Time to start | As soon as registrations are in place | Weeks to months before the first hire |
| Administration | Handled by the EOR | Your own staff or advisers |
| Compliance risk | Carried by a local specialist | Carried by you |
| Best for | Individual assignments and smaller teams | Long-term operations with many employees |
How to get started
- Get in touch and tell us about the assignment, the person and the expected start date.
- We review the setup and clarify which permits and registrations are needed.
- Contract and onboarding: we prepare the employment contract and introduce your dedicated contact.
- Payroll runs monthly for as long as the assignment lasts, and we handle deregistration at the end.
Not sure an EOR is the right fit? Ask us, and we will give you a straight answer.