The situation

Effective January 1, 2018, the minimum salary for foreign workers under the Pay Limit Scheme in Denmark has increased to DKK 417,793.60 gross per year (DKK 34,816.13 gross per month), up 2.2 percent from last year.

A closer look

  • Impact on Fast Track. The new threshold also applies to Fast Track Scheme applications under the Pay Limit Scheme conditions (one of the four tracks available under the Fast Track Scheme).
  • Initial applications. Employers of foreign nationals seeking to obtain residence permits on or after January 1, 2018 must increase the foreign national’s minimum salary to comply with the new rule.
  • Renewal applications. Foreign nationals seeking to renew their residence permit do not have to comply with the new rule.
  • Pending applications. Employers of foreign nationals with pending residence permit applications filed before January 1, 2018 are not required to increase the foreign national’s minimum salary.
  • Applications that do not meet the minimum salary will be rejected.

Background

  • Benefits and allowances.
    • As before, benefits and allowances may only be included if they are specified in the employment contract or assignment letter. Only base salary, paid holiday allowance and payments to the labor market pension scheme can be included in the minimum salary calculation.
    • As before, paid living and housing expenses, per diems, paid means of transportation, paid phone and internet bills etc. may not be included in the base salary calculation but must be paid on top of the DKK 417,793.60 threshold.
  • Market salary rate. As before, there is no specific requirement for employers to abide by a market salary rate.
  • Currency. Employers are required to guarantee the salary in DKK regardless of payroll location and/or exchange rate fluctuations.