COMPETITIVENESS ON LABOUR COSTS
The labour costs in Denmark are in line with those of other countries in northern Europe.
Direct wages are among the highest in Europe but benefit payments and employers’ contribution to social security are so low in Denmark that the total costs for employers are lower than in countries such as Sweden, Germany and UK.
The Danish social security system is financed through taxes. Consequently the general pay is higher in Denmark because of the higher tax rate. The Danish employer’s social security contribution is only a symbolic 1.4 % of the income and is considerably lower than in other European countries. However, since 1994 employees contribute to the social security system with 8 % of earned income. This contribution finances unemployment benefits etc.
