Social Costs (if social secured in Denmark)

Social Costs (if social secured in Denmark)

Danish employers are liable to pay various social costs for their employees. However, in an international perspective viewed as low.

Social costs consists of a seven difference types of cost. Some types of costs are fixed, others depends on the type of profession.

I ATP (Danish Labour Market Supplementary Pension Scheme)
A pension scheme enforced by law, which is funded by both employer (2/3) and employee (1/3). The employer’s yearly contribution is DKK 2,272.

II AUB (Employers’ Reimbursement System)
An education fund financed by employer contribution of 2,700 DKK yearly per full time employee.
AUB seeks to provide more vocational apprenticeships and traineeships. Through reimbursement for apprentices and trainees, AUB helps to ensure high skills standards in the Danish labour market.
AUB pays reimbursement to employers paying wages to apprentices and trainees while they are attending college or are in training programmes.
In addition to employers, apprentices and trainees, colleges and committees may obtain funding from AUB for training programmes and college stays both in Denmark and abroad.

III AES (Labour Market Insurance)
AES is an independent institution follows the applicable regulations in determining whether an injury or illness can be classified as an industrial injury. When an injury or illness can be recognised as an industrial injury, AES then decides the amount of compensation payable.
AES funds and pays compensation for recognised occupational diseases. It is mandatory for all private and public sector employers in Denmark to contribute to AES
AES is funded by employer contribution, which vary from DKK 283 – 6,239 per full time employee depending on the profession.

AFU (securing payment for foreign workers in Denmark)
The fund responsible for paying out wages/salaries owing to wage earners posted to Denmark by foreign enterprises.
AFU can pay out wages/salaries, pensions, holiday pay, allowances etc. if the work performed is covered by a collective agreement, and the case has been heard by a labour court. The foreign enterprise must also be domiciled in the EU/EEA, and an attempt must have been made to recover the outstanding account from the foreign enterprise subsequent to the hearing of the case by the labour court. Employer contribution yearly per full time employee, DKK 8.

FIB (financing of ATP contribution for those without job)
Employer yearly contribution per full time employee is DKK 546. The contribution (partly) covers the ATP contribution for those who various reasons are without job (e.g. illness, unemployment and maternity/paternity leave).

Barselsfond (maternity/paternity leave fund)
The objective of the scheme is to compensate companies for the cost of maternity/paternity leave. Employer’s yearly contribution is DKK 950 per full time employee.

Arbejdsskadeforsikring (occupational injury insurance)
Employers are obligated to take out an occupational injury insurance at a private company. The annual insurance premium will vary depending on the number of employees and profession. Based on statistical information from the trade organisation Insurance & Pension Denmark the average yearly premium per employee for businesses with up to 5 employees range from DKK 1,176 (accountants) to 24,441 (fishermen at open sea).

Total yearly social costs per full time employee (example):

(dkk) cleark Mason
ATP 2.272 2.272
AUB 2.700 2.700
AES 323 2.080
AFU 8 8
FIB 546 546
Barselsfond 950 950
Occ. Injury insurance 1.176 7.980
Total social costs, DKK 7.975 16.536
conversion rate € 7,50 7,50
Total social costs, € 1.063 2.205