How to stay compliant

Employer-of-Record (EOR) in Denmark: Do You Need One?

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How to stay compliant

Employer-of-Record (EOR) in Denmark: Do You Need One?

So you want to hire someone in Denmark. Problem is, your company is located somewhere else.  

If you’ve done some research, you’ve probably been told you should be using an Employer-of-Record (EOR). Why? Well, if your company isn’t located in Denmark, using an EOR can help you bypass the traditional obstacles to hiring full-time employees.  

But there’s a catch: EOR solutions in Denmark are expensive—usually at least $500 per month per employee—and can take time to set up. And because you’re complying with a different set of labor laws, logistics and benefits can end up costing you lots of time and money. While they will save you time from setting up your own entity, they’re rarely cheap or fast.

The good news? There’s another way to hire remote workers in Denmark, and it doesn’t involve forking out huge amounts of money for an EOR.  

The solution: Hire your teammates in Denmark as contractors. If you’re hiring remotely and your teammates have autonomy, there’s a good chance you can make compliant contractor hires. You still have to use locally-compliant contracts, but the process is a lot easier, more affordable, and faster.

We built Thera to help you make contractor hires, in 150+ countries (like Denmark). So you can hire the people you want on your team, without paying thousands for an EOR. You can get set up in a couple of clicks—and you’ll only pay $49 per contractor per month.  

It’s just as easy as it sounds. No catch. Here’s what Thera looks like vs. an EOR in Denmark:

Everything you should know about using an EOR in Denmark

Are you considering expanding your business to Denmark and wondering how to hire employees in compliance with Danish laws and regulations? You may have heard of using an Employer of Record (EOR) to simplify the process, but is it the best option for your business? In this post, we'll break down everything you need to know about using an EOR in Denmark, including any legal or regulatory conditions specific to the country. We'll also explore why hiring an independent contractor might be a simpler option.

What is an EOR?

An EOR is a third-party company that acts as an employer for your employees in a foreign country. They handle all administrative tasks, such as payroll, taxes, and benefits, and ensure compliance with local laws and regulations. This allows your business to expand globally without the need for a physical presence in the foreign country.

Legal and regulatory conditions in Denmark

Denmark has strict labor laws and regulations that must be followed when hiring employees. For example, all employees are entitled to a minimum of five weeks of paid vacation per year, and employers must contribute to a pension plan for their employees. Additionally, there are strict rules around terminating employees, and severance pay is required in certain situations.

When using an EOR in Denmark, it's important to ensure that they are registered with the Danish Tax Authority and comply with all local labor laws and regulations. Failure to do so can result in fines and legal issues for your business.

Should you hire independent contractors instead?

While using an EOR can simplify the process of hiring employees in Denmark, it may not be the best option for all businesses. Hiring an independent contractor can be a simpler and more cost-effective solution, especially for short-term projects or when testing the waters in a new market.

Hiring contractors means your business isn’t responsible for the same legal & administrative as you’d be on the hook for if you hired employees. It’s easier, cheaper, and faster to get up and running.

What if I accidentally misclassify my contractors?

We’ve got two pieces of good news for you. For one, if you’re hiring remotely, it’s unlikely you’ll misclassify your contractors. Many of the things that qualify people as employees, such as company equipment and set working hours, don’t typically apply to remote work.

Still, it’s helpful to have the comfort of knowing you’re not at risk for misclassification. That’s why, at Thera, we’ve launched Misclassification Assurance: so you can hire contractors abroad, worry-free. Learn more about hiring with Thera below.

If you want to hire contractors, Thera can save you a ton of time

If you’re hiring contractors, you’re probably spending too much time on their payroll, contracts, and tax documents. Which is why we built Thera, which saves you 90% the time you spend on contractor paperwork each month.

With Thera, you can compliantly hire your contractors in 150+ countries, onboard them in minutes, and pay them all at once (in a click). It’s global contractor payroll, finally simplified.

Sound interesting? Click here to book a demo and see the platform firsthand

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