When you hire new employees from abroad, they are liable to pay tax in Denmark from the first day of work. This also applies to temporary employees such as seasonal workers and craftsmen. Depending on each employee’s personal and financial situation, they may be subject to different types of tax liability.
Help your non-Danish employees understand their tax liability
- Working in Denmark
- Residing in your home country and often travelling to work between Denmark and your home country
- Personal and economic interests in your home country
- Possible spouse or cohabiting partner living in your home country
= Limited tax liability
- Working in Denmark
- Residing both in your home country and in Denmark
- Personal and economic interests in your home country
- Possible spouse or cohabiting partner living in your home country
= Dual residency - your home country is your place of residence
- Working in Denmark
- Residing both in your home country and in Denmark
- Personal and economic interests in Denmark
- Possible spouse or cohabiting partner living in Denmark
= Dual residency - Denmark is your place of residence
Declaring and paying salary
You withhold A-tax and labour market contributions (am-bidrag) in E-income just like you do for your Danish employees. This also applies if the employee is running his own business in his home country and considers himself to be self-employed in relation to the work he will be doing for you. The Danish tax rules determine whether your non-Danish employee is considered an employee or self-employed.
Find out if he/she is considered an employee, a fee-based employee or a commercial enterprise
Special rules
Tax on hiring employees from outside Denmark
If, as a Danish business, you hire an employee who lives outside Denmark and with a non-Danish employer, the employee is subject to the tax rules on international hiring-out of labour.
Read more about hiring employees from outside Denmark (international hiring-out of labour)
Cross-border worker rules
If more than 75% of the annual income is taxable in Denmark, it is sometimes possible to pay tax according to the cross-border worker rules. Please contact us if you have any questions in relation to the special rules.
Read more about the cross-border worker rules.
Commercial drivers
If, as a Danish haulier, you have employed a driver who lives outside Denmark and who drives in and outside Denmark, the driver is, as a rule, only liable to pay tax in Denmark on the share of the pay related to his driving in Denmark. This means that the pay relating to driving in Denmark and the pay relating to driving outside Denmark must be reported separately in E-income.
Researchers and highly-paid employees
If you recruit researchers and highly-paid employees from outside Denmark, they can, under certain conditions, be employed under the Researchers and highly-paid employees’ scheme. Under this scheme, they pay a gross tax rate of 27% labour market contributions, totalling 32.84%, for a period of seven years.
Read more about researchers and highly paid employees