What to Know About Average Salary in Denmark? 2024 Guide

Are you curious about the average salary in Denmark? If so, you’re not alone. Denmark is known for its high standard of living and strong economy, making it an attractive destination for expats. But what exactly is the average salary in Denmark? According to a recent survey, the average salary in Denmark is 601,054 DKK per year. However, this number can vary depending on factors such as profession, age, skillset, and level of Danish language proficiency.

Denmark has a well-developed labour market with a high level of unionizationTrade unions play a significant role in the Danish labour market, and collective bargaining agreements are common. The minimum wage in Denmark is not set by law but is instead determined through collective bargaining agreements between employers and employees.

As an expat with experience working abroad, I can attest to the fact that Denmark’s economy and living standards are among the best in the world. The country has a highly skilled workforce, a strong social welfare system, and a high level of gender equality.

What jobs are in high demand in Denmark? Read in our guide.

What is The Average Salary in The Danish Labour Market?

According to the latest statistics from the Danish Agency for Labour Market and recruitment, the average salary in Denmark was 601,054 DKK per year in 2024. This translates to about 50,088 DKK per month or 289 DKK per hour, assuming a 40-hour workweek.

However, the average salary varies significantly by sector, occupation, education, experience, and region. For example, the average salary in the public sector was 664,000 DKK per year, while the average salary in the private sector was 579,000 DKK per year. The highest-paying sectors were information and communication, financial and insurance, and energy supply, while the lowest-paying sectors were accommodation and food service, agriculture, and other service activities.

Factors That Influence The Salary Level

There are other factors that influence the salary level in Denmark. Here are some of them:

• Collective agreements: Most workers in Denmark are covered by collective agreements, which are negotiated between trade unions and employers’ associations. These agreements set the minimum wages, working hours, overtime pay, holidays, sick leave, maternity leave, pension, and other benefits for different sectors and industries. Collective agreements are legally binding and apply to both unionized and non-unionized workers.

• Working hours: The average working hours in Denmark are 37 hours per week, which is lower than most countries. However, some sectors and industries may have longer or shorter working hours, depending on the collective agreements and the nature of the work. Overtime work is usually paid at a higher rate, or compensated with time off.

• Work performed: The salary level in Denmark also depends on the type and quality of the work performed by the worker. The salary is determined by the skills, qualifications, experience, responsibilities, and performance of the worker. Some occupations require higher education, certification, or training, while others require physical strength, creativity, or customer service. Some occupations are more in demand, while others are more competitive.

• Gender: The gender pay gap in Denmark is 7.4%, which means that women earn on average 7.4% less than men for the same work. This gap is lower than the EU average of 14.1%, but still exists due to various factors, such as occupational segregation, career interruptions, part-time work, and discrimination. The government and the social partners have taken measures to reduce the gender pay gap, such as promoting equal pay, equal opportunities, and work-life balance.

Average Salary Across Multiple Sectors in Denmark

Pay rates can vary significantly based on the nature of the occupation. For instance, in Denmark, the occupations with highest-paying wages are typically held by managers, professionals, and technicians. These roles often require a high level of expertise, education, and experience, which is reflected in their compensation.

• Managers: They oversee operations within companies and organizations. Their pay rates are often high due to the level of responsibility and the long working hours they put in. The average salary for managers in Denmark is around 68,000 DKK.

• Professionals: This category includes a wide range of occupations, such as doctors, lawyers, and engineers. Their specialized knowledge and skills command high pay rates. The average salary for professionals in Denmark is approximately 51,500 DKK.

• Technicians: These are skilled workers in fields like information technology, healthcare, and engineering. Their technical skills and expertise contribute to their high pay rates. Technicians in Denmark earn an average salary of around 45,000 DKK.

Lowest Paying Jobs

On the other hand, the lowest-paying occupations are usually elementary occupations, service and sales workers, and skilled agricultural workers.

• Elementary Occupations: These jobs often require less formal education and include roles such as cleaners, laborers, and food preparation assistants. Despite the essential nature of these jobs, their pay rates are often lower. The average salary for elementary occupations in Denmark is around 33,000 DKK.

• Service and Sales Workers: This group includes roles such as shop salespersons, waiters, and bartenders. While these jobs are crucial for the functioning of society, they are often lower-paid. The average salary for service and sales workers in Denmark is approximately 31,300 DKK.

• Skilled Agricultural Workers: These workers are involved in farming, fishing, and forestry. Despite the physical demands and long working hours, these occupations are often lower-paid. The average salary for skilled agricultural workers in Denmark is around 15,300 DKK.

The total pay for these occupations is often determined by a collective agreement between Danish employers and workers’ unions. The collective agreement often stipulates the minimum pay rates, working hours, and other conditions of employment for different occupations. Despite these agreements, there remains a significant disparity in pay rates between the highest and lowest-paying occupations. This disparity highlights the need for ongoing discussions and negotiations to ensure fair compensation for all workers.

Related article: What Is A Good Salary in Copenhagen, Denmark? [2023]

Minimum wage in Denmark

Unlike many other countries, Denmark does not have a statutory minimum wage. Instead, the minimum wage is determined by the collective agreement between trade unions and employer associations, which cover about 80% of the Danish labour market.

The minimum wage varies by sector and occupation, but it is generally around 110 DKK per hour or 18,000 DKK per month. However, some sectors and occupations may have higher or lower minimum wages, depending on the level of skill, responsibility, and seniority required.

For example, the minimum wage for cleaners was 121.65 DKK per hour in 2020, while the minimum wage for construction workers was 156.65 DKK per hour in 2020. The minimum wage for foreign workers who work in Denmark under the Pay Limit Scheme, which is a special residence and work permit scheme for highly qualified professionals, was 436,000 DKK per year.

Are you planning to move to Copenhagen? There are things you need to know first. Before you seek a job in Denmark, read this article on reasons why you shouldn’t move there.

Danish Flexicurity Model

The Danish labour market is known for its high level of flexibility, security, and active employment policies, which together constitute the so-called Danish flexicurity model or the Danish model. The model has three core elements:

• Flexible labour market: Employers can hire and fire at will, without excessive costs or litigation for dismissing employees. This allows employers to adjust to changing market conditions and to innovate and compete in the global economy. Employees have a high level of job mobility and can easily switch jobs to advance their careers or to find a better match for their skills and preferences.

• Income security: Employees who join and pay subscription fees to an unemployment insurance fund (A-kasse) get up to two years of unemployment benefit (dagpenge) after losing their jobs. The unemployment benefit is relatively high, up to 90% of previous earnings for lower-paid workers, and provides a secure safety net for the unemployed. Those who are not members of an unemployment insurance fund are entitled to a means-tested cash benefit (kontanthjælp), which is paid at a lower rate than the unemployment benefit. The Danish state also provides subsistence allowance (forsørgelsesydelse) for people who lose their livelihood due to illness, divorce, or unemployment, and who do not qualify under other social welfare schemes such as pension or unemployment benefit.

• Active labour market policy: The Danish government runs education and retraining programs and provides counselling services to get unemployed people back to work as quickly as possible. The unemployed are required to participate in these programs and services, and to actively seek and accept suitable job offers, or else they risk losing their benefits. The active labour market policy aims to improve the employability and skills of the unemployed, to match the labour supply and demand, and to prevent long-term unemployment and social exclusion.

The Danish flexicurity model is based on a long tradition of dialogue and cooperation between trade unions and employer associations, which negotiate wages and working conditions through collective agreements. The government rarely interferes in the labour market regulation, except for setting the framework and providing the funding for the unemployment insurance and the active labour market policy. The Danish flexicurity model is widely admired and endorsed by the European Union and other countries as a successful way of balancing the needs of employers and employees, and of achieving high employment, low unemployment, and social cohesion.

If you like to save money, there are places in Denmark with low cost of living. Check our article: Cheapest Places To Live in Denmark

Average Expenses Vs Average Salary in Denmark

Denmark is a Nordic country with a high standard of living and a strong welfare system. The country is known for its high taxes, but also for its generous public services and social benefits. In this section, we will explore the average expenses and average salary in Denmark, and see how they relate to the cost of living and the quality of life in the country.

Average Expenses in Denmark

According to Numbeo, the average cost of living in Denmark is $1890 per month, which is 1.85 times more expensive than the world average. Here’s a table showing the average expenses in Denmark:

Explanation:

The table above provides a structured view of the average costs associated with living in a particular city. It covers essential categories such as housing, utilities, food, transportation, health care, education, and entertainment. The costs are indicative and can vary based on location, market conditions, and personal consumption. For example, the housing costs show a significant difference between renting and owning property, and between city center and outskirts.

Utilities, while relatively low, are a recurring monthly expense. Food, transportation, and entertainment are variable costs that can fluctuate based on individual lifestyle choices.

Health care and education costs, in this example, are covered by the state, reflecting a social system where these services are provided at no direct cost to the individual. This table can be a helpful tool for budgeting or for those considering relocation.

Expats need a health insurance solution when moving to Denmark. We recommend Cigna Global for international coverage. As Cigna is an international insurance provider, your coverage is valid not just in Denmark but also worldwide.

Cost of Living and Quality of Life in Denmark

Based on the average expenses and average salary in Denmark, we can calculate the disposable income and the savings rate for a typical worker in the country. The disposable income is the amount of money left after paying taxes and essential expenses, such as housing, utilities, food, and transportation. The savings rate is the percentage of disposable income that is saved or invested, rather than spent on non-essential items, such as entertainment, clothing, or travel.

Assuming a tax rate of 40%, which is the average effective tax rate in Denmark, and using the average expenses and average salary from the previous sections, we can estimate the disposable income and the savings rate for a typical worker in Denmark as follows:

• Disposable income = Average salary – Taxes – Essential expenses

• Disposable income = 50,088 DKK – 20,035 DKK – 18,107 DKK

• Disposable income = 11,946 DKK per month

• Savings rate = Disposable income / Average salary

• Savings rate = 11,946 DKK / 50,088 DKK

• Savings rate = 23.8% per month

These calculations show that a typical worker in Denmark has a relatively high disposable income and a high savings rate, which indicate a high standard of living and a high quality of life. However, these calculations are based on averages and may not reflect the actual situation of every individual, as there may be variations in income, expenses, taxes, and lifestyle choices.

Cost of Living in Denmark Compared to Other Countries

To compare the cost of living and the quality of life in Denmark with other countries, we can use some international indices, such as the Cost of Living Index, the Purchasing Power Index, and the Quality of Life Index. These indices are based on various indicators, such as prices, incomes, services, amenities, safety, health, environment, and happiness. Denmark ranks as follows in these indices:

• Cost of Living Index: 88.77, which is the 10th highest in the world. This means that Denmark is one of the most expensive countries to live in, as the prices of goods and services are high compared to the world average.

• Purchasing Power Index: 101.27, which is the 19th highest in the world. This means that Denmark has a high purchasing power, as the average income is high enough to afford the high cost of living.

• Quality of Life Index: 192.53, which is the 4th highest in the world. This means that Denmark has a high quality of life, as the country performs well in various aspects of well-being, such as health, education, safety, environment, and happiness.

These indices show that Denmark has a high cost of living, but also a high purchasing power and a high quality of life. It means employees will have no problems with collective agreements or key issues regarding the average number or amount of wages in Denmark. Denmark offers a high standard of living and a high level of social welfare to its residents, but also requires a high level of taxation and a high level of personal responsibility.

Do you want a stable job abroad? Read our article: Best Countries in Europe for Au Pair Program

Final Thoughts About the Average Salary in Denmark

In conclusion, the average salary in Denmark reflects the country’s high standard of living, strong economy, and commitment to social welfare. The Danish labor market’s flexicurity model provides a unique balance of flexibility and security. While the cost of living is relatively high, the disposable income and savings rate contribute to a quality lifestyle. Understanding the factors influencing salaries, such as collective agreements, working hours, and job type, is crucial for expats and locals alike. Denmark’s commitment to gender equality and active labor market policies further enhances its appeal.

Interested in Denmark’s work culture and lifestyle? Check our content for insights. Subscribe for updates on the Danish job market. Start your successful career journey in Denmark with us!

Liked it? Take a second to support Nicholas on Patreon!