How Payroll Works in Denmark

In Denmark, businesses must first register as an employer (arbejdsgiverregistrering) and obtain a VAT registration in order to prepare payrolls for their employees. The SKAT Erhverv website can be used to verify whether a business is registered as an employer.

To register with a payroll system like Bluegardenczy Danløn, a Danish entrepreneur must provide the company bank account number and company registration number (CVR), which takes up to two weeks to set up.

New employee information, such as their address, name, bank account number, sort code, employment contract (required by law), CPR number, and type of tax card, is needed to draw up payroll. Employers who have not entered into an agreement with their employee must inform the accountant under which terms and conditions the employee is employed (ikke-funktionær or funktionær) in order to calculate vacation correctly.

Danish entrepreneurs should provide their accountant with information on wages and salaries, such as the number of hours worked per month, pay period, gross amount of wages for full-time employees, hourly rate for hourly-paid employees, and any fringe benefits.