Companies expanding their operations into Denmark open up a wealth of opportunities for expansion throughout the European Union and further afield but challenges come alongside the potential benefits. Payroll management is among those challenges, whether your company is considering moving employees abroad or hiring fresh staff in-country.
Employment laws, payroll regulations and income tax regulations are areas where you cannot afford mistakes. Bradford Jacobs’ Employer of Record (EOR) payroll solutions will navigate around these potential pitfalls effectively and efficiently by putting into action our comprehensive knowledge of tax and payroll regulations.
Running payroll in Denmark requires an in-depth knowledge of employment, payroll, and taxation laws – and keeping up to date with changes. As part of our service, we file returns and associated payments for wages tax and social security contributions directly from our payroll system to the relevant authorities.
Outsourcing your payroll in Denmark will streamline your operations by dealing with the following:
- Obtaining a Central Business Registration (CVR) number from the Danish Business Authority (DBA) for dealing with the authorities.
- Registering with the Danish Customs and Tax Administration (SKAT) for withholding tax from employees’ salaries and remitting to the authorities.
- All employers must take out mandatory industrial insurance, along with the withheld Danish Labor Market Supplementary Fund (ATP) contribution.
- Creating contracts (All Danish employers must provide a contract if the employee has worked for at least one month and more than eight hours a week. The contract covers specific conditions of the employment and can be requested in language of choice, though this is not a legal requirement.)
Additional payroll support includes:
- Negotiating tax incentives for skilled expats under the Special Expatriate Tax Scheme.
- Reconciling federal, and any provincial, territorial, and local taxes to assess for refunds or extra payments.
- Calculating employees’ monthly salary and sending their pay slips.
- Submitting employees’ and employers’ wage tax returns.
- Creating and submitting your company’s annual accounts and year-end statements.
- Creating payment schedules for salaries and any insurance contributions (if applicable).
- Ensuring accurate personal income tax returns are filed for you and your employees, where required.
The above checklist highlights why the vast percentage of foreign companies expanding into Denmark’s strictly regulated business environment hand their payroll to EOR providers such as Bradford Jacobs. By outsourcing payroll, your company complies with tax and employment regulations without risking sanctions or financial penalties for late or incomplete filing. You focus on your goals and expansion, free of any concerns over payroll. Questions? We have the answers. Contact Bradford Jacobs now.
