Hire Employees in Greenland

Two routes exist. Registering a Greenlandic entity gives you direct employment, followed by registration for withholding and reporting.

An Employer of Record removes that setup. The EOR is the legal employer, runs payroll, withholds A-tax and accounts for the labour market levy, while day-to-day direction stays with you.

A third pattern is common here and worth naming separately — Danish companies posting employees to Greenland, which raises withholding questions under two systems at once.

Statutory employer cost in Greenland is unusually light. The labour market levy is 1.1% of the total wage sum for the private sector and 0.9% for the public sector — municipalities and Self-Government administrations, departments and institutions — under Inatsisartut lov nr. 9 of 19 November 2020, applicable from July 2021.

The levy is calculated on the wage sum rather than per employee, so it behaves as a payroll charge rather than an individual contribution.

There is no statutory minimum wage. Pay floors come from collective agreements negotiated by SIK and other unions, which also govern sick pay, holiday funds and training funds. The applicable agreement therefore does more work here than legislation.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a Greenlandic entity somewhere between 15 and 25 employees, though the reporting burden shifts the calculation. Model both — see EOR vs Entity.

The labour market levy is assessed as a percentage of the total wage sum. For the private labour market it is 1.1%; for the public labour market 0.9%.

The two-rate structure is worth noting when modelling mixed arrangements — the applicable rate follows the nature of the employer rather than the work.

Pension contributions are set by collective agreement rather than statute, so the rate depends on which agreement covers the role. Confirm it before quoting a total cost.

Collective agreements also establish funds that carry their own obligations — the holiday fund, the social fund, and the information and education fund among them.

Income tax rates combine national and municipal elements and vary by municipality of taxation, so the employee’s tax municipality affects the withholding rate.

Gross monthly salaries in Danish kroner. The 1.1% levy applies to the wage sum; pension follows the applicable agreement.

Benchmarks below are gross monthly salaries in Danish kroner. Employer statutory cost is the 1.1% levy, with pension contributions set by the applicable collective agreement.

Greenland operates taxation at source. The employer withholds part of the employee’s income as A-tax and accounts for it to Skattestyrelsen.

The form of remuneration makes no difference. Fixed or variable pay is treated alike, and commission income falls within A-income on the same basis.

A-income can arise without a formal employment relationship. It applies even where the working arrangement is very loose — for instance where someone is engaged for a single job — and it makes no difference whether the payment is the recipient’s main or secondary income, or whether they also have income taxed as B-income.

Digital reporting is mandatory at 20 or more employees. Employers at that size must submit the A1 statements and the A10 and A11 annual pay statements digitally. Below 20 employees an employer can be required to report digitally where it has internet access, under Selvstyrets bekendtgørelse nr. 10 of 20 September 2011.

Income tax combines national and municipal components and varies by municipality of taxation. Confirm the applicable rate with Skattestyrelsen.

There is no statutory minimum wage in Greenland. Terms are set by collective agreements, with SIK the principal union negotiating for hourly-paid workers across the Self-Government and the municipalities as well as private employers.

Those agreements carry provisions well beyond pay — including sick pay arrangements for hourly-paid workers where the individual agreement does not cover it, supplements, and practical training allowances.

The classification test is set out clearly. An employment relationship is characterised by the recipient performing work according to the employer’s instructions and for the employer’s account. Self-employment is characterised by carrying on economic activity for one’s own account and risk with the aim of profit.

That distinction is the practical test for whether A-tax withholding applies.

Contracts should record pay, hours, leave, notice and termination terms, and should identify the applicable collective agreement.

Establish the tax municipality, since income tax rates vary by municipality and that determines the withholding rate.

Set up digital reporting from the outset if headcount is at or approaching 20.

Working hours and overtime follow the applicable collective agreement rather than a single statutory code.

Because the levy applies to the total wage sum, overtime and bonuses feed the employer charge at the same 1.1% — there is no ceiling.

Half-day observances on certain holidays are also a matter for the applicable agreement.

Greenland observes Lutheran and national public holidays, including National Day in June. Some days are observed as half-days under collective agreements.

Greenland observes Lutheran and national public holidays, including National Day in June. Some days are observed as half-days under collective agreements. Dates are set out below.

Benefits are largely governed by collective agreement rather than statute, which makes the applicable agreement the primary reference point.

Agreements establish and fund the holiday fund, the social fund and the information and education fund, each carrying its own employer obligations.

Sick pay for hourly-paid workers is covered by a dedicated agreement running to 2026 where the individual agreement does not itself address it.

Pension arrangements likewise sit within the agreements rather than in legislation.

Termination follows the applicable collective agreement and general employment law.

Final pay including accrued leave is due on separation and must be reflected in the A-tax accounting and the annual pay statements.

Where an employee was posted from Denmark, the exit needs handling under both systems — the Greenlandic income still has to appear on the Danish annual statement if a Danish residence was retained.

Annual pay statements on forms A10 and A11 must be filed, digitally where the reporting threshold applies.

Danish companies posting employees to Greenland frequently have to withhold A-tax under both Danish and Greenlandic rules, which is the single most common practical difficulty here.

Greenlandic income must also be included on the Danish annual statement where the employee retains a Danish residence during the stay. Relief is then given against Danish tax, normally equal to the tax paid to Greenland, so the income is not taxed twice.

Working in Greenland rarely produces a tax saving, and in some cases it costs more tax than staying in Denmark — worth setting out plainly to any candidate weighing a move.

A practical route exists. It is often most appropriate for the employer to establish a separate SE number for reporting the pay of posted employees. The Greenlandic tax can then be paid to the Danish tax authority, which transfers it to Greenland.

The classification test decides whether withholding applies at all. Work performed under the employer’s instructions and for the employer’s account is employment; activity for one’s own account and risk is not.

A-income does not require a formal employment relationship. It arises even on very loose arrangements, including engagement for a single job, and regardless of whether the payment is a main or secondary income.

Posted staff need handling under two systems. Withholding under both Danish and Greenlandic rules is common, and a separate SE number is often the cleanest solution.

Note also that there is no statutory minimum wage; that digital reporting is compulsory at 20 employees and can be imposed below it; and that income tax rates vary by municipality.

Work backwards from the start date. An EOR hire takes three to six weeks; entity formation runs two to five months.

Identify the applicable collective agreement first — it sets pay, pension and much else that legislation does not.

Confirm the tax municipality, apply 1.1% to the wage sum, set up digital reporting if headcount is near 20, and for anyone posted from Denmark consider a separate SE number before the first payment.