Denmark: Regulation on the pay limit under the "pay limit scheme" in relation to application on work and residence permit

By Soeren Narv Pedersen, Mia Boesen

02-2019

The minimum requirement in relation to applications on work- and residence permits under the so-called "pay limit scheme" is as of 1 January 2019 raised to DKK 426,985.06 per year.

Third country citizens (i.e. non EU-citizens) can apply for a work- and residence permit in Denmark pursuant to various application schemes, e.g. under the so-called "pay limit scheme".

It is a requirement that employee applying under this scheme receives a minimum salary. This minimum salary is regulated on a yearly basis with reference to the general wage development in Denmark.

As of 1 January 2019, the pay limit is DKK 426,985.06 per year corresponding to the DKK 35,582.08 per month.

The salary up to and including the pay limit may only consist of the employee's base salary, payment to the labour market pension scheme and holiday allowances paid out to the employee. It is, however, only holiday allowance from the employer in question, i.e. where the employee currently is verified to be employed which can be included in the pay limit.  The value of benefits as for example company car, telephone and internet, subscription or board and lodging may not be included.

The requirement on a yearly salary of DKK 426,985.06 must be fulfilled regardless of whether the employee takes holiday without pay. Thus, if the employee accrues holiday allowances which are not paid out until the year after, these holiday allowances may not be included in the salary for the accrual year.

The yearly regulation of the pay limit only applies for new applications for work- and residence permits, i.e. applications filed after 1 January 2019. If an employee is to apply for a prolongation of his permit, the employee may continue on the pay limit which applied at the time the employee applied for the first time. The employee must, however, be employed in the same position and on the same terms. In other words; it is not a legal requirement that employees under the pay limit schemes receive a salary increase.

The fee for the processing of an application for work- and residence permit under the pay limit scheme is currently DKK 3.025.

 

Authors

Mia Boesen

Mia Boesen

Associate
Denmark

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