The Pay Limit Scheme Minimum Salary

The Pay Limit Scheme is an essential program for individuals aiming to find work in Denmark, offering specific pathways determined by set criteria. Understanding the key details and requirements is crucial before starting the application process. Furthermore, being aware of how variations in your employment status and tax responsibilities can affect your eligibility for the scheme is vital.

A look into Denmark's Pay Limit Scheme

Aimed at attracting top-tier professionals, Denmark’s Pay Limit Scheme provides a work permit option that is accessible to a broader audience. Foreign workers need to obtain a job offer with a salary that meets or surpasses a specified minimum to be eligible for both residence and work permits under this scheme.

The established threshold guarantees that the scheme concentrates on drawing in professionals occupying well-paid positions. In contrast to numerous other work visa programs, this initiative does not mandate that applicants fulfill particular educational or professional qualifications, thereby making it available to a wide range of high-earning individuals.

Beyond just regular foreign workers, the Pay Limit Scheme also includes asylum seekers in Denmark. Those who secure a job offer that meets the salary requirements can qualify to apply for both a residence and work permit under the Pay Limit Scheme.

Reviewed annually, this salary threshold is adjusted according to economic trends to ensure that only high-paying positions qualify for the program. At present, applicants must obtain a job with a salary that exceeds the updated limit to be eligible for this permit.

It’s important for applicants to keep in mind that the process for the Pay Limit Scheme may take some time; therefore, submitting documents early is recommended to prevent unnecessary delays. This route is essential for skilled professionals seeking to reside and work in Denmark, as it allows them to make significant contributions to the country’s economy.

Period for remaining in the Pay Limit Scheme

For applicants from outside Denmark, a residence permit may be issued that remains valid for one month prior to the commencement of their job. This period offers a chance to acclimate to life in Denmark. Conversely, if applications are submitted while already in Denmark, the residence permit takes effect on the applicant's first day of work.

Declaring your financial ability to support yourself and any family members accompanying you is essential during the application process. Failing to provide this declaration will result in receiving a residence permit that is only valid for 14 days prior to the start of your employment.

The validity of a residence permit can extend for a maximum of three months before your passport expires. If your passport's validity is shorter than your intended stay, the residence permit will be modified to match this shorter duration. Once your passport is renewed, you can apply for an extension of your residence permit. However, this application must be submitted no more than three months prior to the expiration of your current permit.

When your employment lasts for four years or longer, a residence and work permit will typically be issued for the entire duration of that employment. To remain employed beyond the initial four-year period, it is essential to apply for an extension based on your current job. Submitting your extension application promptly allows you to stay in Denmark and continue working, even if your existing permit expires before SIRI makes a decision regarding your request for an extension.

For employment lasting less than four years, your residence and work permit will typically align with the duration of your job. You will also be granted a six-month job-seeking permit, enabling you to look for new employment opportunities in Denmark; however, it’s important to note that working during this time is not allowed. To ensure you can continue your employment in Denmark after your current permit expires, applying for an extension of both your residence and work permits is crucial.

Upon securing a new position, it’s necessary to submit a new application tied to that specific job. Applications can be made under the Positive List or any suitable work scheme. Notably, once you’ve submitted your application for the new position, you may begin working immediately without waiting for the new permit to be issued.

When your employment contract is renewed, obtaining an extension for your residence and work permit is crucial. It is essential to submit your extension application before your current permit expires. By applying promptly, you ensure that you can remain in Denmark and continue working as your permit approaches its expiration.

Employment status transitions and the Pay Limit Scheme

Employment status changes and the Pay Limit Scheme are tightly linked. With a permit granted through the Pay Limit Scheme, your residency is directly tied to your job in Denmark, meaning your work permit is limited to the specific position that justifies your residency. As a result, you cannot take on a different role, even within the same company.

In cases of unemployment due to factors beyond your control, like layoffs, you may apply for a six-month residence permit to search for new job opportunities in Denmark. If you become unemployed, it’s essential to inform SIRI, as your residence and work permit are tied to your specific job. Make sure to submit an application for a job-seeking permit within two days after your employment ends.

Notifying SIRI is essential if you change jobs or face unemployment. If you hold a permit under the Pay Limit Scheme, you have the flexibility to change your job duties within the same organization or university without needing a new work permit. This applies to cases like promotions or relocations, provided that your salary and employment conditions continue to meet Danish standards.

To obtain a new job in Denmark while currently employed, it is required to submit a fresh application for both a work and residence permit. Your new employment details must be included in this application. After you submit the application, you can immediately start working, even if SIRI has yet to approve it. You are permitted to begin your job while waiting for the permit approval to come through. It is also crucial that your salary meets or exceeds the established pay limit.

Tax duties for those in the Pay Limit Scheme

Understanding tax responsibilities is crucial for those involved in the Pay Limit Scheme to effectively manage their finances while residing and working in Denmark. Generally, individuals living in Denmark are fully liable for taxes, meaning they are taxed on their worldwide income. However, unless a double taxation treaty (DTT) specifies otherwise, individuals may also be considered tax residents in another country.

Participants in the Pay Limit Scheme must grasp this distinction, as it plays a significant role in determining how their income is taxed.

In 2024, individuals who are fully tax residents may face tax rates as high as 52.07%. This total rate comprises various elements: a base tax of 12.01% on personal income, an 8% labor market tax applied to personal income, and an average municipal tax of approximately 25.067%. Additionally, there is a top tax of 15% on income that exceeds DKK 588,900, calculated after accounting for the 8% labor market tax deduction.

Another important aspect to consider is the special tax regime for expatriates. This program allows qualified expatriates to benefit from a flat tax rate of 27% on their gross income for up to 84 months, provided they meet specific criteria. This arrangement can be especially advantageous for participants in the Pay Limit Scheme, particularly those in high-paying positions, as it simplifies tax obligations and may result in a lower overall tax rate.

Those who do not qualify for full tax liability may be eligible for limited tax liability, depending on specific conditions. This scenario pertains to individuals who receive income from Danish sources while living in Denmark for less than 183 days within a 12-month period. In such instances, their income is taxed at rates comparable to full liability (up to 52.07%), but only income earned from Danish employment is considered.

Despite high tax rates, individuals in Denmark can access various deductions that can significantly lower their tax burden. It is advisable for those participating in the Pay Limit Scheme to consult with tax professionals, who can assist in identifying relevant deductions and improving overall tax management.

Understanding the complexities of the Danish tax system, particularly concerning the Pay Limit Scheme, emphasizes the significance of seeking professional advice. Consulting with tax experts is essential for grasping local regulations, ensuring compliance, and optimizing potential deductions or exemptions.

Who qualifies for the Pay Limit Scheme?

To secure a residence and work permit through Denmark's Pay Limit Scheme, certain conditions must be fulfilled. Compliance with Danish regulations regarding the terms of employment is crucial.

The salary you are offered must be at least equal to the specified minimum threshold. For 2024, this threshold is set at DKK 487,000, with adjustments made every January 1st. It is also important that your salary payments are made into a Danish bank account that you control. Additionally, salaries must align with Danish standards. 

Your total annual salary must still meet the minimum requirement, even if you take unpaid leave. Additionally, holiday allowances earned in one year but paid out in the following year cannot be included in the annual salary calculation for the year they were accrued. Holiday allowances are recognized as part of your salary only if they are paid by your current employer.

Understanding that non-monetary benefits offered by your employer-like free meals, access to a company car, paid phone or internet services, and housing allowances-cannot be factored into the assessment of whether your salary meets the required minimum amount is essential.

In determining whether the minimum salary threshold has been reached, only specific components of your salary are considered. This calculation includes the following elements:
- your base salary in liquid assets and any guaranteed fixed supplements,
- contributions to labor market pension schemes (which consist of both employer and employee contributions),
- paid holiday allowances.

In evaluating whether the offered salary aligns with Danish norms, particular components are taken into account. These consist of the base salary in liquid assets, any guaranteed fixed supplements, contributions to labor market pension schemes (including both employer and employee contributions), and the paid holiday allowance.

A holiday allowance that is payable in the following year will not be counted in the annual salary calculation for the year it was accrued. Furthermore, only the holiday allowance provided by your current employer is considered part of your total salary.

An additional aspect of your employment may include benefits from your employer, such as a paid canteen, free access to a car, and coverage for phone, internet, and living expenses. It's crucial to remember that these benefits cannot be factored in when evaluating whether your salary complies with Danish standards.

It is essential that the compensation offered aligns with the benchmarks set within the relevant professional sector.

To comply with Danish regulations, employment terms need to adhere to certain criteria. Relevant conditions, including notice periods, holiday entitlements, and other aspects, must meet or exceed the standards established in your industry.

Fair treatment of employees and offering benefits that align with industry standards is vital. This collaborative approach highlights a commitment to maintaining high employment practice standards across various sectors.

If there are any doubts or inquiries regarding the compliance of your employment terms with Danish standards, regional labor market councils can provide assistance. The expertise of these councils enables them to evaluate your employment conditions and confirm their compliance with local regulations and expectations. Their assessments can provide clarity and confidence, ensuring that your rights and benefits are protected within the Danish labor market.

Opening your Danish bank account is essential and should be done within 180 days after your residence and work permit is issued. If you arrive in Denmark after obtaining your permit, you must set up this account within 180 days of your entry. To adhere to salary payment regulations in Denmark, it is necessary for your salary to be deposited into a legally operating Danish bank account registered in your name.

Once you have maintained a valid Danish residence permit for at least 180 days, your salary must be deposited into your Danish bank account beginning with your first salary payment. There is no requirement to move your salary from another Danish bank account.

To set up a bank account in Denmark, it’s essential to get in touch with a bank directly. You have the flexibility to select any account type, as there are no particular limitations. In case you find it challenging to open a Danish bank account because you don’t have a Danish address or CPR number, you might want to check the options for a basic payment account at www.basalbetalingskonto.dk.

Additional requirements
- To be eligible for a residence permit under the Pay Limit Scheme, it is crucial that your spouse, cohabiting partner, children, or, in some cases, other family members with residence permits as accompanying relatives have not had their permits revoked more than once due to the absence of a required work permit.
- Permits may still be granted for roles within a company or institution engaged in a legal labor dispute, as long as these positions are not part of the conflict outlined in the relevant agreements among labor market stakeholders. However, positions that are involved in the dispute cannot receive permits.
- You must work at least 30 hours each week, and your salary needs to meet or exceed the specified minimum amount, independent of the total hours you work.
- In some cases, you may need to obtain a Danish authorization or a temporary authorization for adaptation and training before receiving a residence and work permit. If you are participating in adaptation and training for a Danish authorization, a temporary authorization (evalueringsautorisation) from the Danish Patient Safety Authority is required. Furthermore, those offered positions as medical doctors must secure authorization from the Danish Patient Safety Authority.

What to keep in mind before applying for the Pay Limit Scheme?

The Danish Agency for International Recruitment and Integration, known as SIRI, manages applications for residence permits related to employment.

For eligibility, it is usually required to have an employment contract with a company registered in Denmark. Nonetheless, there are exceptions, including situations where you work for a foreign company offering services in Denmark. When submitting your application from within Denmark, it is crucial to ensure that your stay is lawful.

To submit your application, obtaining a case order ID is necessary, along with paying a fee that covers SIRI's processing costs. Initially, your employer needs to complete one of the two sections of the application form. After they have finished, a reference number and password will be created and should be given to you. With these details, you can access the online application and complete your part.

If you have granted your employer power of attorney to manage the application on your behalf, they must utilize the AR6 online form, which is exclusively designed for employer completion.

Grasping the application process is vital, as SIRI frequently rejects residence permit applications submitted well ahead of your intended start date in Denmark. Submitting your application more than six months before your expected arrival significantly increases the likelihood of denial. Additionally, it's important to remember that if you have already paid the processing fee to SIRI, it will not be refunded in the event of a rejection.

The application procedure for the Pay Limit Scheme

Generate a case order ID
Generating a case order ID is crucial to start the process of submitting an application or appeal that necessitates a fee.

The applicant must provide these details:
- passport number,
- first name,
- last name,
- email address.

The application fee is set at DKK 6,290. There are specific situations in which this fee may be waived, known as fee exemptions. Prominent examples of such exemptions include Denmark's international obligations and the Association Agreement between the EU and Turkey.

It's important to note that generating a case order ID is mandatory, regardless of whether a fee is applicable. In the event that you pay a fee later deemed unnecessary, a full refund will be issued to you.

Moreover, you need to agree to allow the immigration authorities to send the case order ID to the email address you provided. To proceed, just click on "Create case order ID."

2. Pay the fee
It is important to generate your Case Order ID, submit your application, and pay the fee within the same calendar year. Each year, fees are adjusted on January 1. As a result, if you pay the fee prior to this date and then submit your application, your application could be at risk of rejection. Should your Case Order ID not show up, you have the option to manually enter it and check your payment status.

3. Prepare documents
Before you begin filling out the application form, it is advisable to gather all the necessary documents. Should you provide documents in languages other than English, Norwegian, Swedish, or Danish, it will be necessary to include certified translations in either Danish or English.

The submission of the following documents is required:
- A complete passport copy, which should cover all pages, including those that are blank, as well as both the front and back covers.
- You must also provide proof of payment for the application fee, including the transaction receipt.
- Additionally, an employment contract or job offer outlining your salary and terms of employment, along with a job description, is necessary.
- Educational qualifications relevant to the position being offered must be included as well.
- If applicable, authorization documents should be submitted, particularly if the position requires Danish authorization.

When establishing a company in Denmark, the following elements might be considered:
- A comprehensive plan detailing the company’s setup, which should incorporate a projected timeline for becoming operational.
- Additionally, a documented overview of significant expenses related to the establishment of the company in Denmark may be included.

For a newly formed company that hasn't yet produced its first annual accounts, it is recommended to provide:
- A business plan or concept outlining the company's goals and strategies.
- Moreover, documentation showcasing the financial foundation of the business, such as a budget or balance from the general ledger, should be included.

In cases where submissions are made on behalf of a company, be aware that further documentation may be needed to assess the financial viability of covering employee salaries.

4. Necessary documents for hotels and restaurants workers
Collecting the necessary documents for employment in hotels and restaurants is essential. It is advisable to gather all required materials prior to beginning the application process. This checklist is tailored for positions within the hospitality and food service industries, where extra information might be needed.

The following documents must be included in your submission:
- Documentation proving payment of fees, which should include the transaction receipt.
- A formal employment contract is necessary, as merely having a job offer is not adequate.
- Ensure to include a full copy of your passport, covering all pages (including blank ones) along with both the front and back covers.
- Educational credentials and course-related documentation must be provided, typically in the form of a diploma from the educational institution.
- Your CV (curriculum vitae) is required.
- Proof of relevant work experience, such as a declaration or statement from a former employer, is essential.

You or your employer must submit the following documents:
- Unless the most recent annual accounts of the company are already listed on Virk.dk, they need to be provided.
- A current general ledger balance of the company is required only if the initial annual accounts are unavailable. This balance should reflect up-to-date information, detailing turnover, employee remuneration costs (including whether the applicant’s salary is included), and the overall financial performance.
- If the business was established less than a year before the application, a business plan and budget for the company must be submitted.
- Additionally, an employee overview is necessary, which should include the number of staff at the same location as the applicant, along with their positions and salaries (a sample can be downloaded below).

A valid power of attorney must be included if you have authorized your employer to handle the application on your behalf. In cases where a third party represents both you and your employer, that individual is required to submit a separate power of attorney to SIRI for each party.

Make sure to include the following information:
- The individual who is granting the power of attorney.
- The recipient of the power of attorney.
- The date and signature.

5. Completing and finalizing the Application Form
When submitting and finalizing the application form, you have two online application options:
- AR1, which requires both you and your employer to fill out distinct sections of the form.
- AR6, which allows you to authorize your employer to submit the application on your behalf.

For the AR1 form, your employer must complete the first section. After finishing their part, a reference number and password will be generated, which your employer should provide to you. This enables you to access the online application and finish your section. Conversely, only your employer needs to complete the AR6 form.

Make sure that all necessary documents are prepared in digital format for attachment during the application process. If you do not have a MitID, it is crucial to sign, scan, and include the 'Sworn declarations and information' document with your application.

Each application form comes with comprehensive instructions that explain how to fill it out and specify the required documents to accompany your application.

Documents submitted in languages other than English, Norwegian, Swedish, or Danish must be accompanied by professional translations into either Danish or English.

6. Collection of biometric data
Collecting biometric data is a requirement when applying for a residence permit. This involves taking a facial photograph and recording your fingerprints. If your biometric data is not collected, your application will be rejected, and no further processing will take place.

If you are legally residing in Denmark, you typically have the option to record your biometric features within the country. This is applicable if you:
- hold a valid visa,
- are exempt from the visa requirement, or
- already have a valid residence permit.

Recording your biometric features within 14 days of your application submission is essential. Should you encounter challenges in arranging an appointment to capture these biometric details within the specified period, notifying the relevant authorities about your scheduled appointment can be beneficial. Taking this step may assist in avoiding the denial of your application.

For recording your biometrics at one of SIRI's branch offices, it is important to schedule an appointment in advance. If you are currently outside of Denmark, you can choose to have your biometric features recorded either at a Danish diplomatic mission or at an application center in your country of residence.

Certain countries may lack a Danish diplomatic mission or application center. When this happens, the provided list will direct you to a Norwegian mission that has an agreement with Denmark or to the nearest Danish diplomatic mission or application center in your area.

Submitting a passport photo is mandatory when applying at a Norwegian diplomatic mission. Upon receiving approval for a residence permit, it is important to record your biometric features within a specified timeframe after your arrival in Denmark.

Reviewing the webpage of the local diplomatic mission for specific information is essential before submitting your application. Requirements may differ by mission and could include additional fees, extra passport photos, or more copies of the application.

Once you receive your permit, your facial photo and fingerprints will be stored on a microchip embedded in your residence card. If you are a commuter applying solely for a work permit and do not reside in Denmark, you are not required to have your biometric features recorded.

7. Get a response
To receive a response, check the typical processing times for cases displayed on the right side of the page. A reply to your application confirms that you have successfully completed several steps, including creating a case order ID, paying the fee, submitting your application, and recording your biometric features. If additional information is needed for SIRI to continue processing your case, they will reach out to either you or your employer.

Fundamental knowledge for those living and working in Denmark

The Pay Limit Scheme grants residence and work permits that enable individuals to reside in Denmark for the specified period stated on the permit. It is essential to keep your Danish address because being away from Denmark for more than six consecutive months will cause your permit to expire, resulting in the forfeiture of your residency rights. In cases where extended absences from the country are required for work purposes, it is possible to apply for an exemption to prevent the permit from becoming invalid.

This permit allows entry to the Schengen area for up to 90 days within any given 180-day period; however, it does not grant permission to work in other nations of the Schengen zone.

The relationship between your work permit and employment in Denmark is crucial, as earning a salary that meets or exceeds the minimum pay limit is necessary.

Having a Danish residence and work permit does not allow you to work in other Schengen countries. However, under the Pay Limit Scheme, you can modify your job duties within the same university or company without needing to apply for a new work permit. This flexibility applies in cases such as promotions or transfers, as long as your salary and employment conditions align with Danish regulations.

It's essential to recognize that your work permit may expire before your residence permit, particularly if you hold a permit that allows you to remain in Denmark while looking for new employment. In the event that you receive a job offer from a different employer, you will need to apply for a new work permit. Additionally, if you plan to take on a side job, a separate permit is required. However, you are permitted to participate in unpaid voluntary activities.

When you're in the job-seeking phase, focusing solely on finding new employment opportunities in Denmark is essential. Make sure to notify SIRI about any changes in your employment status or if you find yourself unemployed.

During your stay, you and your family must remain self-sufficient. Accepting benefits under the Active Social Policy Act, such as social security payments, is not allowed. If you or a family member receives these benefits while residing in Denmark, it may result in the cancellation of your permit and loss of residency rights. Moreover, if any authority, including a municipality, provides such benefits to non-Danish citizens, SIRI will be notified.

With a residence permit in Denmark, you have the right to attend free Danish language courses. The responsibility for providing these lessons and guiding you to a language center falls to your local municipality.

To qualify for these courses, you must be at least 18 years old and have your address officially registered in the Danish National Register. These lessons are usually conducted in conjunction with other newcomers to Denmark.

Individuals holding a residence permit in Denmark for work, study, or similar purposes must pay a deposit before commencing language courses. It’s important to note that failing to finish the necessary modules within the given period may result in the forfeiture of your deposit.

If you haven’t received an offer for Danish classes within a month of registering your address in Denmark, it’s recommended that you reach out to your municipality for assistance.

Adapting successfully to life in Denmark involves grasping several key elements. For individuals gearing up to live and work in the country, the website lifeindenmark.dk offers a comprehensive range of resources, links, and commonly accessible options on essential topics, including:
- tax issues,
- MitID,
- health cards,
- vacation entitlements,
- the CPR register,
- education and childcare,
- housing options,
- vehicle registration and driving licenses.

Your specific circumstances may require additional crucial information and options.

How the minimum salary under the Pay Limit Scheme is calculated and adjusted annually

The Pay Limit Scheme is built around a fixed minimum annual salary that must be met in order to obtain and keep a residence and work permit in Denmark. The minimum salary is stated as a gross yearly amount before tax and must be guaranteed in the employment contract. It cannot be replaced by variable or uncertain payments.

Under the current rules, the minimum salary threshold for the standard Pay Limit Scheme is set at DKK 494,000 per year. This corresponds to a fixed monthly salary of approximately DKK 41,167 paid over 12 months. The amount must be paid as regular salary and must be clearly stated in the contract submitted with the work permit application.

The minimum salary is adjusted once a year by the Danish authorities. The adjustment is based on developments in Danish wage levels and is intended to keep the scheme targeted at highly qualified and highly paid positions. When the new minimum salary is announced, it applies to all new applications submitted from that time. Existing permits are normally not revoked solely because the threshold has been increased, but the new level will apply when an employee applies for an extension or a new permit under the scheme.

For employers and employees, it is important to understand that the minimum salary is a statutory requirement that sits alongside any collective agreement or individual salary negotiation. Even if a collective agreement allows a lower salary for a given position, a foreign employee using the Pay Limit Scheme must still meet or exceed the statutory minimum salary to qualify for a permit.

In practice, the minimum salary is calculated on the basis of the fixed, guaranteed cash salary for the full year of employment. The authorities look at the agreed annual salary in the contract and divide it by the number of months in the employment period to check that the monthly level is consistent with the annual requirement. If the employment starts or ends mid‑year, the minimum salary is calculated proportionally for the actual period of employment, but the equivalent annual level must still meet the current Pay Limit Scheme threshold.

When the minimum salary is adjusted, employers should review existing contracts for employees whose permits will need to be extended. If the agreed salary no longer meets the updated threshold, the salary must normally be increased before the extension application is submitted. Failing to do so can result in refusal of the extension and, in serious cases, consequences for the employer’s ability to use the scheme in the future.

Because the Pay Limit Scheme threshold is expressed as a gross amount, Danish income tax, labour market contributions and other statutory deductions are calculated on top of this figure and do not affect whether the minimum salary requirement is met. What matters is the agreed gross salary before any deductions. Employers should therefore ensure that payroll systems and employment contracts clearly reflect the gross annual salary used to satisfy the Pay Limit Scheme minimum.

Examples of salary components that count (and do not count) towards the minimum salary threshold

The Danish Pay Limit Scheme is very strict about which salary components can be included when assessing whether you meet the minimum salary requirement. The immigration authorities focus on predictable, guaranteed pay that is clearly stated in your employment contract and paid regularly to you in Denmark.

Below you will find practical examples of what typically counts towards the minimum salary threshold – and what is normally excluded.

Salary components that usually count towards the minimum salary

As a rule, only fixed, guaranteed remuneration that is paid in money and appears clearly in the contract and on the payslip can be included. In practice, the following elements are normally accepted:

• Base salary (fixed monthly pay) – your regular gross salary before tax, paid in Danish kroner, is the core element and must be clearly specified as a monthly or annual amount.
• Guaranteed fixed allowances – for example a fixed monthly function allowance, responsibility allowance or position allowance that is paid every month in a predetermined amount and is not dependent on performance or company results.
• Fixed, contractually guaranteed supplements – for example a permanent, predictable supplement for working unsocial hours, if it is paid as a fixed amount (not only when such hours actually occur).
• Employer pension contributions – the employer’s mandatory and contractually agreed pension contributions (for example 10–12% of salary paid into a Danish pension scheme) can normally be counted as part of the total salary package under the Pay Limit Scheme, as long as they are clearly stated in the contract and paid regularly.
• Fixed, guaranteed cash allowances linked to the job – for example a fixed monthly on-call allowance or a fixed monthly inconvenience allowance, if they are guaranteed regardless of actual use and are treated as taxable salary.

All components that are to be counted must be:

• Clearly described in the employment contract
• Paid regularly (typically monthly)
• Taxable in Denmark
• Guaranteed and not dependent on uncertain future events

Salary components that do not count towards the minimum salary

Many common benefits and variable payments cannot be used to reach the Pay Limit Scheme minimum salary. The Danish Agency for International Recruitment and Integration (SIRI) focuses on secure, predictable income and therefore excludes elements that are uncertain, irregular or mainly for reimbursement.

The following components are normally not included in the calculation:

• Performance-based bonuses – annual or quarterly bonuses, commission, profit-sharing and other performance-related payments do not count, because they are not guaranteed and can vary from year to year.
• One-off sign-on or retention bonuses – even if they are specified in the contract, they are paid only once and therefore cannot be used to meet the ongoing minimum salary level.
• Overtime pay and irregular shift supplements – payments for actual overtime hours, evening, night or weekend work that depend on how much you work in a given period are not considered part of the guaranteed minimum salary.
• Non-cash benefits in kind – such as free housing, company car, free meals, paid telephone, internet, gym membership or other fringe benefits do not count towards the minimum salary threshold, even if they are taxable.
• Travel and expense reimbursements – tax-free or taxable reimbursements for travel, per diem, mileage, relocation costs, home flights or similar expenses are not treated as salary for Pay Limit Scheme purposes.
• Stock options, RSUs and other equity-based remuneration – share options, restricted stock units, employee share purchase discounts and similar equity incentives are excluded because their value is uncertain and depends on future market conditions.
• Uncertain or discretionary allowances – any allowance that is paid only if the employer decides so, or only if certain conditions are met (for example a discretionary “performance allowance” without a fixed minimum amount), cannot be counted.
• Benefits paid outside Denmark without Danish taxation – salary or benefits paid abroad that are not taxed in Denmark are not taken into account when assessing whether you meet the Danish minimum salary requirement.

How to structure your salary package in practice

When negotiating or reviewing a contract under the Pay Limit Scheme, it is important to ensure that the fixed, guaranteed cash salary plus employer pension contributions alone meet or exceed the current minimum salary threshold. Variable elements and benefits in kind can be added on top, but you should not rely on them to reach the required level.

For employers, this means clearly separating in the contract which parts of the remuneration are fixed and guaranteed (and therefore count towards the minimum salary) and which parts are variable or in kind (and therefore do not count). For employees, it is crucial to check that the guaranteed components are high enough, even if bonuses or other benefits were removed.

A transparent and well-structured salary package not only reduces the risk of problems with the residence and work permit, but also makes it easier to document compliance during inspections or when extending the permit.

Impact of bonuses, benefits in kind and pension contributions on meeting the minimum salary requirement

Under the Danish Pay Limit Scheme, meeting the minimum salary requirement is not just about the headline monthly pay. Certain bonuses, benefits in kind and pension contributions can be included in the calculation, while others are explicitly excluded. Understanding this distinction is crucial both for employees applying for a work and residence permit and for employers structuring compliant employment contracts.

The minimum salary under the Pay Limit Scheme is set as a fixed annual amount in Danish kroner and is adjusted once a year by the Danish authorities. To be accepted, the salary must be paid regularly (typically monthly), be predictable and be clearly stated in the employment contract. Only elements that are guaranteed and taxable in Denmark can normally be counted towards the threshold.

Bonuses: when they count and when they do not

Bonuses can only be included towards the minimum salary if they are guaranteed, clearly specified in the contract and paid at fixed, predictable intervals. For example, a contractually guaranteed monthly or quarterly bonus of a fixed amount, which is not dependent on performance or company results, may be counted as part of the salary for Pay Limit Scheme purposes.

By contrast, variable or uncertain bonuses are not accepted. This typically includes:

• Performance-related bonuses based on individual or team targets
• Profit-sharing or company result bonuses
• Discretionary bonuses that the employer may choose to pay, but is not obliged to
• One-off signing bonuses or retention bonuses that are not part of a regular, ongoing salary package

These variable elements may be attractive from a total compensation perspective, but they cannot be used to reach the statutory minimum salary threshold. When planning an application, the fixed base salary plus any guaranteed, contractually agreed bonuses must already meet or exceed the annual minimum.

Benefits in kind and non-cash remuneration

Benefits in kind are common in Denmark, especially for higher-level positions. However, most non-cash benefits cannot be counted towards the Pay Limit Scheme minimum salary, even if they are taxable. The authorities focus on cash salary that is paid to the employee and available for living expenses in Denmark.

Typical benefits in kind that do not count towards the minimum salary include:

• Company car (including fuel or mileage benefits)
• Free or subsidised housing or housing allowance paid directly to the landlord
• Free telephone, internet or other communication services
• Paid meals, canteen subsidies and food vouchers
• Health insurance and other insurance premiums paid by the employer
• Free or discounted company products and services

Even though these benefits may be taxed as fringe benefits under Danish tax rules, they are not considered part of the qualifying salary for the Pay Limit Scheme. For immigration purposes, they are treated as additional perks on top of the required minimum cash salary.

To avoid problems during the permit assessment, the employment contract should clearly separate the fixed cash salary from any benefits in kind, and the fixed cash salary alone should already satisfy the minimum salary requirement.

Pension contributions and the minimum salary

Pension contributions are a key element of Danish employment packages and are often regulated by collective agreements. For Pay Limit Scheme purposes, the decisive factor is whether the pension contribution is paid on top of the agreed salary or is deducted from it.

In most cases, the authorities accept the total agreed salary including the employer’s pension contribution, provided that:

• The pension contribution is clearly stated in the contract as a percentage or fixed amount
• The total remuneration (salary plus employer pension contribution) is taxable in Denmark
• The contribution is paid into a recognised pension scheme

For example, if the contract states an annual salary that meets the Pay Limit Scheme minimum and specifies that the employer pays an additional pension contribution (for instance 10–17% of salary, which is common in many sectors), the full package can usually be taken into account. However, if the salary is presented as a lower “cash” amount and the pension contribution is carved out of this amount, the remaining cash salary must still be high enough to satisfy the minimum threshold.

Employees should pay close attention to how the contract is worded. A higher employer pension contribution can be beneficial for long-term savings, but it must not reduce the effective salary below the required minimum when the authorities assess the application.

Structuring a compliant salary package

To ensure that the minimum salary requirement is met throughout the permit period, both parties should focus on a transparent and well-documented salary structure. In practice, this means:

• Setting a fixed, guaranteed annual base salary in Danish kroner that independently meets or exceeds the current Pay Limit Scheme minimum
• Only relying on guaranteed, contractually fixed bonuses to supplement the base salary, and clearly stating their amount and payment frequency
• Treating benefits in kind as additional perks that do not form part of the qualifying salary
• Clearly specifying employer pension contributions and ensuring that the total taxable remuneration remains above the minimum threshold

Because the minimum salary is adjusted annually, employers should also consider building in a margin above the legal minimum when negotiating the package. This reduces the risk that a future adjustment or a change in the composition of bonuses, benefits or pension contributions will cause the salary to fall below the required level, which could affect the validity of the work and residence permit.

Minimum salary requirements for part‑time, reduced hours and flexible work arrangements

Under the Pay Limit Scheme, the minimum salary requirement is always assessed on the basis of a full‑time position. This means that even if you work part‑time, on reduced hours or under a flexible work arrangement, your agreed salary must correspond to at least the statutory minimum salary for a full‑time job under the scheme. The Pay Limit Scheme cannot be used for genuinely part‑time employment where the pay is simply reduced in line with fewer working hours.

The Danish Agency for International Recruitment and Integration (SIRI) assumes full‑time employment to be 37 hours per week. The minimum annual salary threshold under the Pay Limit Scheme is therefore converted into a monthly and hourly level based on 37 hours. When your application is assessed, SIRI looks at your total guaranteed salary for a 37‑hour week, regardless of how your actual working time is distributed in practice.

If your contract states fewer than 37 hours per week, SIRI will still check whether your salary, when “scaled up” to 37 hours, meets or exceeds the Pay Limit Scheme minimum. For example, if the annual minimum salary under the scheme is set at DKK 536,000, a contract for 30 hours per week will only be accepted if the agreed salary for 30 hours corresponds to at least DKK 536,000 for 37 hours. In practice this means that the hourly rate must be higher than in a standard full‑time contract to compensate for the reduced hours.

Flexible work arrangements, such as variable weekly hours, compressed work weeks or working from home, are generally allowed as long as the employment is clearly full‑time and the minimum salary requirement is met. Your employment contract should specify:

• Average weekly working hours (normally 37 hours for full‑time)
• Annual or monthly gross salary
• Any fixed supplements that are guaranteed and paid in money
• Conditions for overtime, shift work or variable hours, if relevant

It is important to distinguish between flexible full‑time work and real part‑time work. If your contract is for a lower number of hours and the salary does not reach the Pay Limit Scheme minimum when converted to a 37‑hour basis, the application will normally be refused. The scheme is designed for highly paid, full‑time positions and is not intended for reduced‑hours jobs, job‑sharing or casual employment.

Employees and employers should also be aware that unpaid leave, parental leave beyond the statutory paid period, or longer periods of sickness without salary can affect the assessment of whether the minimum salary is still met. If your effective pay during the permit period drops below the required level because your working hours and salary are reduced, SIRI may reassess your residence and work permit. Any planned change to working hours or salary should therefore be evaluated carefully before it is implemented.

From a practical perspective, if you wish to work fewer hours for personal reasons but still use the Pay Limit Scheme, you and your employer must ensure that:

• The contract clearly shows that the position is full‑time in terms of salary level
• The calculated full‑time equivalent salary meets the current Pay Limit Scheme minimum
• All changes in hours or salary are documented and can be presented to SIRI or the Danish Tax Agency if requested

In summary, the Pay Limit Scheme minimum salary is a fixed full‑time threshold. Part‑time and reduced‑hours arrangements are only compatible with the scheme if the agreed pay, when converted to a 37‑hour week, still reaches or exceeds the statutory minimum salary. Before signing or changing a contract, both parties should check the current threshold and, if needed, seek professional advice to avoid unintentionally falling below the required level.

Consequences of falling below the minimum salary threshold during the permit period

Falling below the minimum salary threshold under the Pay Limit Scheme is treated very strictly by the Danish Agency for International Recruitment and Integration (SIRI). The minimum salary is a hard legal requirement for both granting and maintaining a residence and work permit. If your actual salary no longer meets the current threshold, your permit can be revoked, even if the shortfall is unintentional.

The requirement applies to your ongoing, real salary, not only to what is written in your employment contract. SIRI and the Danish Immigration Service may compare your contract with payslips, tax information (eIndkomst) and bank statements. If your reported income is lower than the applicable minimum salary for the Pay Limit Scheme, they can conclude that the conditions for your permit are no longer fulfilled.

Typical situations that can trigger problems

There are several common scenarios in which an employee under the Pay Limit Scheme may accidentally fall below the threshold:

• Reduction of working hours without a corresponding salary adjustment that keeps you above the minimum annual salary
• Unpaid leave or extended periods of sick leave without salary (or with significantly reduced salary)
• Employer cutting fixed salary and replacing it with variable bonuses that are not guaranteed
• Incorrect payroll processing, for example if pension contributions or benefits are deducted in a way that lowers the qualifying salary below the threshold
• Temporary salary reductions during financial difficulties of the company

Even if both you and your employer agree to these changes, they can still put your residence and work permit at risk if the minimum salary requirement is no longer met.

Possible consequences for the employee

If SIRI determines that your salary has fallen below the minimum threshold, the main consequences can be:

• Revocation of your residence and work permit under the Pay Limit Scheme, because the legal basis for your stay no longer exists
• Order to leave Denmark within a set deadline if no new valid basis for residence is granted
• Problems with future applications for Danish permits, as previous non-compliance can be taken into account when assessing credibility
• Loss of right to work from the date of revocation, which can also affect your social security and tax situation

In some cases, you may be given the opportunity to submit documentation or explanations before a final decision is made. However, if the salary has in fact been below the threshold for a period, SIRI will normally regard this as a breach of the conditions.

Consequences for the employer

Employers also face significant risks if they do not comply with the minimum salary rules:

• SIRI may revoke the employee’s permit, which can disrupt business operations and projects
• The company can be flagged as non‑compliant, which may lead to closer scrutiny of future work permit applications
• In serious or repeated cases, the employer may face penalties under Danish immigration law, including fines
• Failure to pay the agreed and required salary can also trigger labour law and tax consequences, including claims for back pay

Because of this, Danish employers are expected to have internal controls ensuring that foreign employees on the Pay Limit Scheme are always paid at or above the applicable minimum salary.

Short temporary deviations and corrections

In practice, minor payroll errors can occur. If a mistake is quickly identified and corrected, and the employee receives the missing salary with back pay, SIRI may consider the overall situation. However, there is no guaranteed “grace period” in the legislation. The key question is whether, over the relevant period, the employee has in reality received at least the minimum salary required by the scheme.

If you discover that your salary has dropped below the threshold, it is important to act immediately:

• Contact your employer and request prompt correction and back payment
• Ensure that future payslips clearly show that the minimum salary requirement is met
• Seek professional advice on whether SIRI needs to be informed or whether a new application is required

Change of conditions and duty to apply for a new permit

If your job conditions change significantly – for example, a shift from full‑time to part‑time, a substantial salary reduction, or a new position with a different salary structure – you may need to apply for a new residence and work permit. Continuing to work under changed conditions that no longer meet the Pay Limit Scheme requirements can lead to revocation of your current permit.

Both you and your employer share responsibility for ensuring that the employment terms always comply with the applicable minimum salary threshold. Before agreeing to any change in salary or working hours, it is crucial to check how it affects your status under the Pay Limit Scheme and, if necessary, adjust the contract or apply for a different type of permit.

Employer obligations to document and maintain the agreed minimum salary level

Under the Danish Pay Limit Scheme, the employer carries the full responsibility for ensuring that the agreed minimum salary is both correctly documented and actually paid throughout the entire permit period. This is a key condition for the employee’s residence and work permit and is closely monitored by the Danish Agency for International Recruitment and Integration (SIRI) and the Danish Tax Agency (Skattestyrelsen).

Documenting the agreed minimum salary

When hiring under the Pay Limit Scheme, the employer must be able to document the salary level clearly and consistently. In practice, this means that the employer should keep, as a minimum:

• a written employment contract or job offer stating the gross annual salary that meets or exceeds the current Pay Limit Scheme minimum
• a clear breakdown of fixed salary, pension contributions, and any other salary components that count towards the minimum threshold
• information on working hours (full‑time, part‑time, reduced hours, or flexible arrangements) so that the salary can be assessed correctly
• any collective agreement that applies to the position, if relevant

The employment contract should specify the gross annual salary in Danish kroner, the payment frequency (typically monthly), and the method of payment (for example, transfer to a Danish bank account). Any changes to salary or working hours during the employment must be documented in writing and stored together with the original contract.

Ongoing payroll and reporting duties

Meeting the Pay Limit Scheme minimum salary is not a one‑time requirement at the time of application. The employer must ensure that the employee’s salary remains at or above the required annual minimum for the entire duration of the permit. This involves:

• paying the agreed salary on time, usually once a month, and always via traceable bank transfer
• issuing detailed payslips that show gross salary, pension contributions, taxable benefits, and any deductions
• reporting salary correctly to the Danish tax system via eIncome (eIndkomst) and withholding A‑tax and labour market contributions (AM‑bidrag)
• ensuring that any salary adjustments due to indexation or internal pay reviews do not bring the annual salary below the current Pay Limit Scheme minimum

If the employee works variable hours or receives variable salary components (for example, bonuses or allowances), the employer must ensure that the total annual remuneration still meets the statutory minimum threshold when all eligible components are added together.

Handling changes in salary, hours, or position

Any change that may affect the employee’s ability to meet the Pay Limit Scheme minimum salary must be carefully assessed and documented by the employer. This includes:

• reductions in working hours, such as moving from full‑time to part‑time or taking long‑term unpaid leave
• changes in job title, responsibilities, or workplace that may require a new permit or an update to the existing permit
• salary reductions, even if they are temporary or agreed mutually

If a change would result in the annual salary falling below the current Pay Limit Scheme minimum, the employer should not implement it without first clarifying the immigration consequences and, where necessary, assisting the employee in applying for a new permit under a different scheme. Failing to do so can lead to revocation of the employee’s permit and potential sanctions for the employer.

Cooperation with authorities and inspection readiness

Danish authorities have the right to request documentation to verify that the Pay Limit Scheme conditions are being respected. Employers must therefore be prepared to:

• provide copies of employment contracts, addenda, and any collective agreements that apply to the employee
• submit payslips, bank transfer confirmations, and internal payroll records for the relevant period
• explain how salary components have been calculated and which elements are counted towards the Pay Limit Scheme minimum

All documentation should be stored securely for at least the period required under Danish bookkeeping and employment law. Keeping records in a clear and structured way makes it easier to respond quickly and accurately to any request from SIRI, the Danish Tax Agency, or the Danish Working Environment Authority.

Consequences of non‑compliance for employers

If the employer does not maintain and document the agreed minimum salary level, the consequences can be significant. Possible outcomes include:

• revocation or non‑renewal of the employee’s residence and work permit
• orders to correct salary payments and pay outstanding amounts to the employee
• administrative fines or other sanctions for the employer
• in serious or repeated cases, restrictions on the employer’s ability to hire foreign workers under the Pay Limit Scheme in the future

Employers should therefore treat Pay Limit Scheme compliance as part of their core HR and payroll processes. Regular internal checks, clear written procedures, and close cooperation between HR, payroll, and management help ensure that the agreed minimum salary level is both properly documented and consistently maintained.

Interaction between collective agreements and the statutory minimum salary under the Pay Limit Scheme

In Denmark, many sectors are covered by collective agreements (overenskomster) that regulate salary levels, working hours, overtime, pension and various allowances. These agreements coexist with the statutory minimum salary requirement under the Pay Limit Scheme, but they do not replace it. For immigration purposes, the decisive factor is always whether the total guaranteed annual salary under the employment contract meets or exceeds the Pay Limit Scheme minimum salary set by Danish law.

The Pay Limit Scheme minimum salary is a fixed annual amount in Danish kroner, adjusted once a year by the authorities. This statutory threshold applies regardless of whether the employment is covered by a collective agreement or not. If a collective agreement stipulates a lower salary than the Pay Limit Scheme minimum, the collective agreement cannot be used to justify a lower pay level for a residence and work permit. In such a case, the employer must offer a higher salary than the collective agreement minimum in order to reach the statutory Pay Limit Scheme threshold.

Where a collective agreement provides a higher salary than the Pay Limit Scheme minimum, the higher collective agreement salary will normally be accepted, provided that the other conditions of the scheme are met. The immigration authorities will look at the concrete figures in the individual contract: the agreed basic salary, any guaranteed supplements and the value of pension contributions that qualify as salary under the Pay Limit Scheme rules. The fact that the salary is “according to collective agreement” is not sufficient on its own; the actual annual amount must be clearly stated and must reach the statutory minimum.

It is important to distinguish between salary elements that count towards the Pay Limit Scheme minimum and those that do not. Collective agreements often include benefits such as paid lunch breaks, extra days off, reimbursement of travel expenses, per diems or performance-based bonuses. These elements may be valuable for the employee, but they do not always count as salary for the purpose of meeting the Pay Limit Scheme threshold. The immigration authorities focus on the fixed, guaranteed remuneration that is taxable in Denmark and paid in money or as qualifying pension contributions. Variable or uncertain payments agreed under a collective agreement are normally disregarded when assessing compliance with the minimum salary requirement.

Employers covered by collective agreements must therefore ensure that their standard collective agreement templates are adapted when hiring under the Pay Limit Scheme. The contract should specify:

• the fixed annual salary in DKK before tax
• any employer-paid pension contributions that qualify as part of the salary
• any fixed, guaranteed supplements that are included in the salary calculation
• a clear statement that the total guaranteed annual remuneration meets or exceeds the current Pay Limit Scheme minimum salary

In practice, this often means that the Pay Limit Scheme employee is placed at a higher step in the collective agreement’s pay scale or receives an individual supplement on top of the collectively agreed minimum. This is fully permissible under Danish labour law, as collective agreements usually set minimum levels and allow higher, individually negotiated salaries. What is not permissible is to rely on future pay increases under the collective agreement to reach the Pay Limit Scheme threshold at a later date. The minimum salary must be met from the start date of the permit and throughout the entire permit period.

When a collective agreement includes automatic annual pay rises, seniority increments or cost-of-living adjustments, these can be beneficial but are not a substitute for meeting the statutory minimum at the time of application. The authorities will assess the salary based on the figures in force at the beginning of the employment. If the collective agreement later leads to a salary that falls below the updated Pay Limit Scheme minimum after the annual adjustment by the authorities, the employer must proactively increase the salary so that the employee continues to satisfy the scheme’s requirements.

Both the employer and the employee should be aware that the immigration authorities may request documentation of the applicable collective agreement and how the salary has been calculated under it. This may include extracts from the agreement, pay scales, supplements and pension rules. The employer must be able to demonstrate that the agreed salary is in line with Danish standards for the sector and position and that it simultaneously fulfils the statutory Pay Limit Scheme minimum salary. Failure to do so can result in refusal of the application or problems when extending the permit.

For employees, it is crucial to understand that being employed under a Danish collective agreement does not automatically guarantee compliance with the Pay Limit Scheme. Before signing the contract, the employee should verify the total annual salary in DKK and compare it with the current Pay Limit Scheme threshold. If the collective agreement salary is too low, the employee should negotiate an individual supplement or a higher step in the pay scale to ensure that the statutory minimum is clearly met and documented in the contract.

In summary, collective agreements and the statutory Pay Limit Scheme minimum salary operate on two different levels. Collective agreements protect employees within the Danish labour market and set sector-specific minimums and working conditions. The Pay Limit Scheme minimum salary is an immigration law requirement that must be met in full, regardless of what the collective agreement provides. For a smooth application process and secure stay in Denmark, the employment contract must satisfy both sets of rules at the same time.

Minimum salary rules when changing employer or position within Denmark

When you hold a Danish residence and work permit under the Pay Limit Scheme, changing employer or position is never just an internal HR matter. It has a direct impact on your permit and on whether you continue to meet the minimum salary requirement. Failing to handle a change correctly can lead to loss of your permit, even if you stay in Denmark and keep working.

The Pay Limit Scheme is always linked to a specific employer, job title, workplace and salary level. Any substantial change must be approved by the Danish Agency for International Recruitment and Integration (SIRI) before you start in the new role.

Changing employer – new permit and minimum salary check

If you change employer, you must apply for a new residence and work permit under the Pay Limit Scheme. Your new job must meet all current conditions, including the minimum annual salary threshold in force at the time SIRI processes your new application.

Key points to be aware of:

• The minimum salary is adjusted every year, so the amount that applied when you received your original permit may be lower than the current threshold. Your new employment contract must meet the current minimum salary, not the old one.
• The minimum salary must be guaranteed, paid in Danish kroner and transferred to a Danish bank account. It cannot be partly paid in cash or in foreign currency.
• You may not start working for the new employer until SIRI has granted the new permit, unless you are covered by a very specific job change rule stated in your current permit letter. In most cases, you must wait for approval.
• If the new salary is even slightly below the applicable annual minimum (calculated as full-time employment), SIRI will normally refuse the application.

From a practical perspective, this means salary negotiations with a new employer should always start from the current Pay Limit Scheme minimum. Any additional elements such as bonuses or benefits must be structured so that the fixed, guaranteed part of your pay still reaches the required level.

Changing position or job content with the same employer

Even if you stay with the same employer, a change of position can trigger a new permit requirement. SIRI will look at whether your new role differs significantly from the one described in your original application, for example:

• Change of job title and main tasks (for example, from “Software Developer” to “Product Manager”)
• Transfer to a different department or business area with clearly different responsibilities
• Promotion to a managerial role with new duties and reporting lines

If the change is substantial, your employer must submit a new application or a change notification to SIRI. In that process, the minimum salary will again be assessed against the current Pay Limit Scheme threshold, not the level that applied when your original permit was issued.

For minor adjustments – for example, a small change in job title without real change in tasks – SIRI may accept that your existing permit continues. However, the employer must still ensure that your salary at all times stays at or above the applicable minimum for a full-time position.

Salary increases, decreases and the minimum threshold

Moving to a new role often comes with a salary adjustment. Under the Pay Limit Scheme, any change that results in your annual guaranteed salary falling below the current minimum is not allowed. This applies even if:

• Your original permit was granted on the basis of a lower threshold in a previous year
• You remain with the same employer and simply change internal position
• You accept reduced hours or a lower base salary in exchange for higher variable pay

Your employer must be able to document that your agreed annual salary – excluding non-qualifying elements such as certain one-off bonuses or non-cash benefits – meets or exceeds the minimum required for the Pay Limit Scheme. If a change of position involves a pay cut, the employer will usually need to either:

• Maintain a base salary at or above the minimum, or
• Move you to another work permit scheme with different conditions, if you qualify.

Internal transfers, relocations and multiple workplaces

Many international employees are transferred between branches or locations within the same group. Under the Pay Limit Scheme, the following situations often require attention:

• Transfer to another Danish branch or city: If the core job content and employer (legal entity) remain the same, the change may be accepted without a new permit, but the employer should be ready to document that the main conditions, including salary, are unchanged and still meet the minimum.
• Transfer to another legal entity in the group: This is normally treated as a change of employer and requires a new permit and a new salary assessment against the current minimum threshold.
• Work at multiple client sites: Consultants who work at different client locations can usually continue under one permit, provided the employer, job content and minimum salary remain as approved. Significant changes in the nature of the work may still trigger a reassessment.

Timing and continuity of your right to work

When planning a job or position change, timing is critical. If your current permit is close to expiry, or if you intend to change employer, you should:

• Ensure your new contract clearly states the annual salary, working hours and main tasks
• Submit the new application in good time before your planned start date
• Not resign from your current position until you understand whether you can legally start the new job and when

If there is a gap between your old and new permits, you may temporarily lose the right to work in Denmark. This can have consequences for your tax situation, social security coverage and future applications for permanent residence.

How we can assist with employer or position changes

Because the Pay Limit Scheme minimum salary is updated every year and the rules around job changes are strictly enforced, both employees and employers often need professional guidance. Our accounting and advisory team can:

• Review draft employment contracts to confirm that the salary structure meets the current Pay Limit Scheme minimum
• Calculate the annual salary correctly, including which components can and cannot be counted
• Coordinate with your immigration adviser or lawyer to align tax, payroll and permit requirements
• Help employers implement payroll procedures that continuously document compliance with the minimum salary rules

Handled correctly, a change of employer or position within Denmark can be an opportunity to improve your career and financial situation. Handled incorrectly, it can put your right to stay and work in Denmark at risk. Ensuring that the minimum salary requirement is met at every stage of your employment is therefore essential.

Comparison of the Pay Limit Scheme minimum salary with other Danish work permit schemes

The Pay Limit Scheme is only one of several Danish work permit options that rely on salary levels or labour market demand. Understanding how its minimum salary compares to other schemes helps you and your employer choose the most suitable route and avoid unnecessary refusals.

The Pay Limit Scheme requires that your annual salary, converted to a fixed monthly amount, is at least the statutory minimum set by the Danish Parliament and adjusted every year. The threshold is relatively high and is designed to target highly paid specialists and managers. All qualifying salary must be paid in Denmark, be taxable in Denmark and be paid to a Danish bank account.

Pay Limit Scheme vs. Fast‑track Scheme

The Fast‑track Scheme is aimed at large, certified companies that frequently recruit foreign specialists. For most Fast‑track tracks, the same minimum salary threshold as under the Pay Limit Scheme applies. The key differences are procedural rather than financial:

• Fast‑track allows you to start working before the permit is fully issued in certain tracks, provided specific conditions are met
• The employer must be certified by the Danish Agency for International Recruitment and Integration (SIRI)
• There is more flexibility for short stays and repeated entries

From a salary perspective, however, you should assume that the Pay Limit minimum is also the relevant benchmark for most Fast‑track permits that are based on pay level rather than on a specific positive list profession.

Pay Limit Scheme vs. Positive List for Skilled and Highly Educated

The Positive List schemes focus on professions where there is a documented shortage of labour in Denmark. For these schemes, the decisive factor is whether your job title and duties match an occupation on the official list, not whether your salary reaches the Pay Limit threshold.

In practice:

• The Positive List for Highly Educated typically involves jobs that are already well paid, but there is no fixed statutory minimum salary identical to the Pay Limit threshold
• The Positive List for Skilled Workers also does not require the Pay Limit minimum, but the salary must still reflect Danish standards for the specific profession and comply with any applicable collective agreement

If your salary offer is below the Pay Limit threshold but your profession is on the Positive List, the Positive List route may be more realistic than the Pay Limit Scheme.

Pay Limit Scheme vs. Researcher and PhD Schemes

Researchers and PhD candidates can often obtain residence and work permits under special rules. These schemes usually do not require compliance with the Pay Limit minimum salary, but the remuneration must still be in line with Danish collective agreements or standard conditions for researchers and PhD fellows.

For universities and research institutions, this means that:

• Standard collective agreement salaries for researchers and PhD students are normally acceptable even if they are below the Pay Limit threshold
• The focus is on the research nature of the job and the institution’s status, rather than on a specific pay limit

Pay Limit Scheme vs. Start‑up Denmark and Entrepreneur Schemes

Entrepreneurial schemes such as Start‑up Denmark are not based on an employment salary in the same way as the Pay Limit Scheme. Instead, they focus on the viability and innovation of the business idea and on your role as an owner or key person in the company.

There is no requirement that you, as an entrepreneur, receive a salary at or above the Pay Limit minimum. However, you must document that you can support yourself and that the business has realistic financial prospects. For employees hired by a start‑up under a standard employment contract, the usual rules apply: if the employee is to be granted a permit under the Pay Limit Scheme, the Pay Limit minimum salary must still be met.

Pay Limit Scheme vs. Trainee, Internship and Au Pair Schemes

Trainee, internship and au pair permits are governed by completely different rules. They are not intended for highly paid specialist positions and therefore:

• Do not use the Pay Limit minimum salary as a benchmark
• Often rely on fixed allowance levels or collective agreement rates that are significantly lower than the Pay Limit threshold

If your primary goal is to gain experience or cultural exchange rather than to work in a full‑time, highly paid role, these schemes may be more appropriate, but they do not lead to a Pay Limit‑based permit.

When the Pay Limit Scheme is the most relevant option

The Pay Limit Scheme is usually the most relevant when:

• Your job offer is not on the Positive List
• Your employer is not certified for the Fast‑track Scheme
• Your annual salary clearly meets or exceeds the current Pay Limit minimum

In these situations, the Pay Limit Scheme can offer a relatively straightforward route, provided that the salary is correctly structured and documented.

Strategic choice of scheme for employers and employees

For employers, choosing the right scheme can affect processing times, flexibility and compliance risks. For employees, it can determine whether a job offer is sufficient for a permit at all. When comparing options, it is important to look at:

• Whether the position qualifies for the Positive List or researcher schemes, which may allow lower salaries than the Pay Limit threshold
• Whether the company can or should obtain Fast‑track certification to combine the Pay Limit salary level with faster procedures
• Whether an entrepreneurial or trainee route is more appropriate given the nature of the activity and expected remuneration

Because the Pay Limit minimum salary is one of the highest statutory thresholds among Danish work permit schemes, it often serves as a reference point when assessing whether a given job offer is realistic for a non‑EU/EEA employee. A careful comparison of schemes before applying can save time, reduce the risk of rejection and ensure that both salary and job profile match the correct legal framework.

Practical salary negotiation tips for employees applying under the Pay Limit Scheme

Negotiating a salary under the Pay Limit Scheme is not only about getting a good offer – it is also about making sure you meet the minimum salary requirement for your residence and work permit. If your agreed salary falls below the statutory threshold, your application will be refused or an existing permit may be revoked. That makes preparation and documentation especially important.

Below you will find practical, Denmark‑specific tips to help you negotiate a compliant and realistic salary package that supports your Pay Limit Scheme application.

1. Start from the current statutory minimum – and go above it

The Pay Limit Scheme requires that your annual salary before tax reaches at least the statutory minimum set by the Danish authorities. This minimum is adjusted every year, typically on 1 January, and applies to the full‑time salary for a standard position.

When you negotiate, aim for a salary that is comfortably above the current minimum. This gives you a buffer in case of:

• small changes in working hours
• unpaid leave or periods without bonus
• future increases in the minimum threshold

Ask the employer to confirm in writing that your fixed, guaranteed annual salary (including only the components that count under the rules) meets the Pay Limit Scheme minimum for the entire contract period.

2. Clarify exactly what counts towards the minimum salary

Not every payment or benefit can be used to reach the minimum salary threshold. During negotiations, go through the salary package line by line and ask the employer which elements they intend to rely on for the Pay Limit Scheme.

In general, you should focus on:

• a fixed monthly salary paid in cash
• mandatory and employer‑funded pension contributions that qualify under Danish rules
• other guaranteed, contractually agreed payments that are not conditional on performance

Be cautious if the employer wants to include variable bonuses, commissions or non‑cash benefits (such as a company car, free housing or paid phone) to “reach” the minimum. Many of these elements do not count, or only count under strict conditions. Ask your employer to structure the package so that the minimum is met without relying on uncertain or non‑qualifying benefits.

3. Ask for a clear, detailed employment contract

Your contract is a key document for the Danish Agency for International Recruitment and Integration (SIRI). It must clearly show that you meet the Pay Limit Scheme minimum salary requirement.

When negotiating, insist that the contract:

• states your gross annual salary in DKK
• specifies working hours (for example, 37 hours per week) and whether the role is full‑time
• breaks down the salary into base pay, pension and any other guaranteed components
• describes any variable pay (bonus, commission) separately from the fixed salary

Ask the employer to avoid vague wording such as “salary according to company policy” or “salary to be agreed later”. Immigration authorities need clear, numeric figures to assess your application.

4. Align your salary with the Danish labour market

Even if you meet the Pay Limit Scheme minimum, your salary should still be reasonable compared with Danish market levels for your profession, experience and location. A salary that is far below typical Danish standards can raise questions during the permit assessment.

Before negotiating, research:

• average salaries for your role in Denmark (for example via job portals, trade unions or professional associations)
• differences between regions (Copenhagen area versus other parts of Denmark)
• sector‑specific pay levels (IT, engineering, finance, healthcare, etc.)

Use this information to argue for a salary that is both above the Pay Limit Scheme minimum and in line with Danish market practice.

5. Consider the impact of pension, holiday pay and working hours

In Denmark, pension contributions and holiday pay are important parts of the total compensation package. They can also affect whether you meet the Pay Limit Scheme minimum.

During negotiations, clarify:

• the percentage of employer‑funded pension and whether it is included in the salary figure used for the Pay Limit Scheme
• whether holiday pay (typically 12.5% of salary if paid out) is on top of or included in the stated salary
• whether the position is full‑time and how many hours per week are expected

If you are offered a part‑time or reduced‑hours role, make sure the pro‑rated salary still meets the minimum requirement. If it does not, ask the employer to adjust the salary or working hours so that you remain eligible.

6. Secure written guarantees on salary stability

Falling below the minimum salary threshold during your permit period can have serious consequences, including the risk of losing your right to stay and work in Denmark.

To protect yourself, negotiate:

• a clause confirming that your fixed salary will not be reduced below the Pay Limit Scheme minimum while your permit is based on this scheme
• clear rules on unpaid leave, salary reductions or temporary lay‑offs
• a commitment that any salary adjustments will take into account future increases in the statutory minimum

Ask the employer to notify you in advance if they plan any changes that could affect your eligibility, so you have time to seek advice or apply under a different scheme if necessary.

7. Coordinate with HR and payroll on documentation

HR and payroll departments in Denmark are used to handling documentation for work permits, but they may not always be fully aware of the detailed Pay Limit Scheme rules.

During negotiations, ask:

• who in the company is responsible for preparing the documentation for SIRI
• how your salary will be reported on payslips and in the Danish tax system (eIndkomst)
• whether the company has experience employing foreign workers under the Pay Limit Scheme

Make sure that the figures in your contract, payslips and application forms are consistent. Discrepancies can delay or jeopardise your permit.

8. Use collective agreements as a reference point

Many Danish employers are covered by collective agreements that set minimum pay and working conditions for specific sectors. While the Pay Limit Scheme minimum salary is a statutory immigration requirement, collective agreements can still be a useful benchmark in negotiations.

If your employer is covered by a collective agreement:

• ask which agreement applies to your position
• check the minimum salary and standard supplements for your job category
• use these figures to argue for a salary that is not only compliant with the Pay Limit Scheme, but also consistent with Danish labour standards

9. Prepare for questions from the authorities

When you negotiate your salary, keep in mind how it will look from the perspective of the Danish immigration authorities. A well‑structured, transparent salary package makes the assessment easier and faster.

To support your application, you should be able to explain:

• how your annual salary is calculated
• which components count towards the Pay Limit Scheme minimum
• why your salary level is reasonable for your role and experience in Denmark

Ask your employer to provide a short written explanation of the salary structure if it is complex (for example, if it includes shift allowances or special supplements).

10. Get professional advice before signing

Before you accept an offer, it can be worthwhile to have the contract reviewed by a professional with experience in Danish immigration and tax rules. This is especially important if:

• your salary is close to the Pay Limit Scheme minimum
• the package includes significant variable pay or benefits in kind
• you are offered part‑time, flexible or project‑based work

A specialist can help you identify risks, suggest adjustments to the salary structure and ensure that your contract supports a strong Pay Limit Scheme application.

Careful salary negotiation at the start of your employment can save you from serious immigration and tax problems later. By focusing on a clear, compliant and market‑aligned salary package, you increase both your chances of obtaining a Danish work permit and your long‑term financial security in Denmark.

Clarifying the distinctions between the Pay Limit Scheme and the Supplementary Pay Limit Scheme

Individuals can apply for a residence and work permit under the Pay Limit Scheme if they receive a job offer with a minimum annual salary of DKK 459,000. This initiative aims to draw skilled workers whose earnings meet Danish wage standards, allowing them to live and work in Denmark.

A similar option is available through the Supplementary Pay Limit Scheme, which has slightly reduced criteria. To be eligible, applicants must have a job offer with an annual salary of at least DKK 393,000.

Although both the Pay Limit Scheme and the Supplementary Pay Limit Scheme are designed to facilitate skilled professionals working in Denmark, they cater to different situations and have unique eligibility requirements.

A notable feature of the Supplementary Pay Limit Scheme is that it does not mandate applicants to possess a specific educational background or to be employed in a particular profession, which broadens the pool of potential candidates. Additionally, asylum seekers in Denmark who have received a high-paying job offer can also apply under this scheme.

Both schemes aim to attract skilled professionals to Denmark, yet the primary difference lies in their salary requirements and the more lenient educational and professional criteria of the Supplementary Pay Limit Scheme. This added flexibility appeals to individuals who might not meet the stricter qualifications of the standard Pay Limit Scheme while still being able to offer valuable skills and knowledge to the Danish workforce.

You can rely on our skilled and dedicated team to help you navigate the complexities of the Pay Limit Scheme. For any further information or assistance, feel free to reach out to us at any time.