Employer of Record (EOR) in Greenland

Employment Laws and Regulations in Greenland

Greenland’s employment rules follow Nordic labor law principles with local tweaks. The main legal foundation comes from Inatsisartut (Greenlandic Parliament) legislation, with the Employment Contracts Act getting a major overhaul in 2025. The system prioritizes worker protections, solid statutory benefits, and collective bargaining while keeping some room for negotiated flexibility. These are the laws your EOR will manage for you, so it’s useful to understand what applies.

Employment Contracts

As of 2025, employment contracts must be written and delivered within one month of the employment start date. They need to be in Greenlandic or Danish and spell out the key details: job title, start date, work location, salary, hours, notice periods, probation terms, leave rights, whether a collective bargaining agreement applies, and how the job can be terminated. The rule applies to any role exceeding 15 hours per week. The contract is the binding agreement between employer and employee, and it has to be clear about CBA coverage or individual terms. Changes to the contract require written agreement from both sides.

Working Hours and Overtime

The standard week is 40 hours, though CBAs often set anything from 37–40. The legal cap on working time (including overtime) is 48 hours per week averaged over four months. Employees get at least 11 consecutive hours of rest in each 24-hour period, plus a full day off per week, usually Sunday. Overtime pay isn’t fixed by law – it comes down to the CBA. Typical rates are around 1.5x base pay, but night shifts, weekends, and holidays all have their own CBA rules that vary by industry.

Minimum Wage

There’s no statutory minimum wage in Greenland. Instead, wages come from CBAs negotiated between unions and employers – they vary by industry and union. The national average hovers around DKK 25,014 (USD 3,627) per month, though skilled and specialized roles typically pay more. Most workers are union members, so CBA rates will likely apply to your hire. If not, you still need to offer competitive pay that makes sense for the role.

Probation Period

Probation in Greenland runs for 3 months. During that time, either side can end the job with just two weeks’ notice – much shorter than what applies after probation ends. The probation period has to be stated in the employment contract. Once the 3 months are up, notice periods kick in based on the Salaried Employees Act and how long the employee has been with you.

Leave Entitlements

Leave is a big deal in Greenland. All employees get strong statutory entitlements unless the contract is even more generous. Your EOR needs to track and manage this carefully.

Annual Leave

Employees get 25 days of annual leave, accruing at about 2 days per month. Vacation pay is 12.5% of salary, usually paid as a lump sum or deposited in a vacation fund. Here’s the key: every employee must take at least 3 consecutive weeks off between May 1 and September 30 – the Arctic summer season. It’s legally required and culturally expected. Any leftover days can be taken anytime during the year.

Sick Leave

Employees can take up to 26 weeks of sick leave in a 12-month period. The first week is paid by the employer; after that, state insurance or the employer covers it depending on the CBA. If an employee is out for more than 3 consecutive days, they need a medical certificate.

Maternity Leave

Female employees are entitled to 2 weeks of maternity leave before the expected date of birth and 15 weeks after birth, totaling 17 weeks. For multiple births (twins), the post-birth period extends to 19 weeks. Maternity leave is partially paid by state insurance and partially by the employer, depending on the specific arrangement and CBA.

Paternity Leave

Male employees are entitled to 3 weeks of paternity leave within the first 15 weeks after the child’s birth. This leave is typically paid and must be taken during the specified period. The entitlement is personal to the father and cannot be transferred to the mother.

Other Statutory Leave

Employees may also be entitled to parental leave (21 weeks shared between parents, or 25 weeks for multiple births), which can be taken at different times and alternated between parents during the child’s first years. Bereavement leave and marriage leave are provided per collective bargaining agreement, typically 1–3 days depending on the circumstances and CBA provisions.

Leave Entitlements

Statutory Employee Benefits

All Greenlandic employees get statutory benefits through contributions and insurance schemes. The main one is a mandatory pension contribution of 11% of taxable income – that’s on employees, not the employer. As of 2025, it went up from 10%. Employees also get state insurance for sickness, maternity, work injuries, and unemployment. Greenland stands out because employers don’t have to contribute to the pension – only employees do – which keeps employer costs lean compared to other Nordic countries. Beyond that, CBAs sometimes add perks like occupational health insurance, disability coverage, or life insurance, depending on the industry.

Recent Regulatory Updates (2026)

Greenland made some big updates to its employment rules in 2025 that affect hiring. The Employment Contracts Act now requires written contracts within one month for any role over 15 hours per week – previously it was looser and more informal. Work and residence permits used to require annual renewal; now they’re good for 2 years, which cuts down on paperwork and costs for foreign workers. The pension contribution bumped from 10% to 11%. Overall, these changes show Greenland is tightening up labor standards while keeping hiring attractive for international companies.

Work Permits and Visas in Greenland

Whether someone needs a work permit in Greenland comes down to citizenship. Nordic nationals – people from Denmark, Finland, Iceland, Norway, and Sweden – can move and work freely without a permit. Everyone else has to get a work and residence permit before they start. SIRI (Danish Agency for International Recruitment and Integration) handles the process on behalf of Greenland, and it typically takes 3 months. The good news: your EOR manages all of it – the paperwork, submissions, renewals – so hiring non-Nordic workers becomes straightforward.

Work Permit Requirements

Who Needs a Work Permit

Anyone who isn’t a Nordic citizen needs a work and residence permit to work legally in Greenland. That applies to skilled professionals, specialists, executives – everyone outside the Nordic five. The permit ties to a specific job, employer (your EOR), and timeframe. The recent move to 2-year validity (instead of annual) gives more breathing room.

Eligibility and Required Documents

For a permit to go through, you need to show there’s a real business need and that the job meets Greenlandic labor law standards – competitive salary based on market/CBA rates, proper hours, benefits included. The paperwork typically includes the employment contract, employer registration proof, passport and CV, a medical certificate, and relevant credentials. You also have to confirm no local or Nordic worker can do the job. Application fees run about DKK 4,000–5,000 (USD 550–700).

Processing Time and Validity

SIRI takes about 3 months to process and approve a work permit application. As of August 2025, permits last 2 years instead of just one year, which cuts down on renewal hassle and keeps operations running smoothly. If employment continues and stays compliant, you can renew before expiration.

Renewal Process

Renewing a permit is pretty straightforward if everything’s still on track and compliant. Your EOR files the renewal 1–2 months before expiration, with updated contract confirmation and proof the job continues. Turnaround is 4–6 weeks, and typically the employee can keep working while it’s being processed, as long as you file on time.

Common Visa Types for Foreign Workers

How an EOR Handles Work Permits

One of the biggest wins with an EOR is having them handle permits and renewals. The EOR acts as sponsor on the application, making sure all paperwork is complete, correctly formatted, and sent to SIRI. They prepare the contract in Greenlandic or Danish, verify salary meets market and CBA standards, and pull together documents like passports and medical certificates. They also track expiration dates and file renewals ahead of time so there’s no lapse. For teams with international staff, that’s a huge headache removed and risk eliminated.

Payroll, Taxes, and Social Security in Greenland

Greenland stands out in the Nordic world for its flat tax rates and simple employer costs. The payroll setup is fairly lean: employers pay only 2.1% AMA (labor market contribution), while employees cover income tax (36–44% depending on where they live) and the mandatory 11% pension. Knowing how these break down helps you budget employment costs accurately.

Employer Contributions

Employee Contributions

Income Tax Brackets

Payroll Cycle

Most payroll runs monthly – salary hits accounts at month-end or early the next month. Some CBAs allow bi-weekly or semi-monthly, but monthly is the standard. The EOR figures gross salary, withholds income tax at the right municipal rate, pulls out the 11% pension contribution, and processes the 2.1% AMA from your side. Net pay goes directly to the employee’s bank account. Tax and pension payments to the government happen quarterly or annually, depending on Greenland’s rules.

13th Month Salary and Bonus Pay

Greenland does not have a mandatory 13th month salary or statutory bonus requirement. Some employers offer holiday bonuses or annual bonuses on a voluntary basis, but these are not legally required. Any bonus or extra payment must be clearly specified in the employment contract or CBA. When offered, bonuses are subject to the same income tax and pension contributions as regular salary.

Cost of Hiring Through an EOR in Greenland

Your total cost of hiring an employee through an EOR breaks down into gross salary, employer contributions (minimal), and the EOR fee. Compared to other models, EOR hiring in Greenland is actually efficient: employer costs are just 2.1% AMA with zero mandatory pension matching. That keeps total costs predictable and clear.

EOR Service Fees

EOR fees typically run $300–$600 per employee per month, but it varies by provider and scope. Some add extras like benefits consulting, multilingual payroll, or remote onboarding support. Some charge a flat monthly fee; others use a percentage of payroll or a mix. Always ask for a detailed breakdown so you know what’s covered: payroll, taxes, benefits, compliance, work permits, onboarding.

Total Employment Cost Breakdown

In this example, a gross salary of $5,000 results in a total employer cost of approximately $5,605 when factoring in the 2.1% AMA contribution and a typical EOR service fee of $500. This represents only 12.1% above the gross salary, which is significantly lower than many other countries with higher employer social security contributions or mandatory pension matching. The employee would receive a net salary after deductions for income tax (42% for Sermersooq municipality in this example) and the mandatory 11% pension contribution, resulting in net take-home pay of approximately DKK 14,700–16,500 (roughly $2,130–$2,390) depending on the specific municipality and any additional deductions. For detailed cost projections tailored to your specific hiring scenario, contact Remote People’s team for a customized quote.

Benefits of Using an EOR in Greenland

There are real wins to hiring through an EOR in Greenland, especially if you want to add staff without the headache and cost of setting up a local subsidiary. Speed, simplicity, compliance – the EOR model handles it all so you can focus on growing the business.

• No Local Entity Required: You can hire employees in Greenland without establishing a local company, subsidiary, or registering with Greenlandic authorities. The EOR serves as the official employer, eliminating the need for local directors, registered agents, or ongoing corporate administration.
• Fast Hiring Timeline: With an EOR, hiring timelines compress to 1–2 weeks for contract and payroll setup, versus 3–6 months to establish a legal entity. This speed is invaluable for scaling teams quickly or responding to market opportunities. Non-Nordic workers require separate work permit processing (3 months), but the EOR manages this parallel to employment setup.
• Simplified Compliance: The EOR assumes responsibility for employment law compliance, including written contracts (per the 2025 Employment Contracts Act), statutory leave tracking, work permit sponsorship, and termination procedures. This significantly reduces your compliance risk and legal liability.
• Predictable Costs: Greenland’s employer contribution burden is minimal – only 2.1% AMA with no statutory employer pension contribution. Combined with transparent EOR service fees, total employment costs are highly predictable and lower than many comparable jurisdictions.
• Flexible Scaling: If you hire one employee or ten, the EOR model scales easily. You can add or remove employees without corporate restructuring, making it ideal for testing new markets, seasonal hiring, or managing variable headcount.
• Local Expertise: An EOR provides access to local knowledge of Greenlandic labor law, collective bargaining agreements, tax updates, and regulatory changes. This expertise ensures your hiring practices remain compliant as laws evolve.
• Administrative Relief: Payroll processing, tax withholding, benefits administration, and work permit renewals are all handled by the EOR, freeing your internal team to focus on hiring, onboarding, and employee development rather than compliance paperwork.

Termination and Offboarding in Greenland

Termination in Greenland is handled by clear legal rules that protect both sides. Notice periods and severance are tied to how long the employee has been with you – no wiggle room there. Getting it right prevents penalties and ensures a proper exit. Your EOR takes care of the whole process: calculating notice, preparing final payments, handling paperwork.

Notice Periods

Severance Pay

Calculation Method

Severance is calculated based on the employee’s gross monthly salary at the time of termination multiplied by the applicable severance factor (1, 2, or 3 months depending on tenure). For example, an employee with 16 years of continuous service terminated due to restructuring would be entitled to 2 months’ severance calculated as 2 × their gross monthly salary. Severance is distinct from notice period pay; both obligations apply if the employee is terminated without cause.

Caps and Exceptions

The maximum severance payment in Greenland is 3 months’ gross salary, regardless of how long the employee has been with the company. Severance is only required after 12 or more years of continuous service; employees with less than 12 years receive no severance obligation. However, severance can be waived or modified if the employee consents in writing, and severance is typically not due if an employee resigns voluntarily (unless the resignation is in response to a material breach by the employer). If an employee is terminated for serious cause (theft, gross misconduct, etc.), severance may be forfeited, though termination for cause is a high bar in Greenlandic law and must be documented thoroughly.

Grounds for Termination

You can terminate for cause (theft, serious misconduct, repeated policy violations after warnings), without cause (with proper notice), or by agreement. Termination for cause requires documented evidence and a written chance for the employee to respond. Without-cause termination follows the notice periods in the Salaried Employees Act and may include severance for long-service employees. Your EOR makes sure every termination is documented properly and legally compliant.

EOR vs. Other Hiring Models in Greenland

Before you commit to an EOR, it helps to see what other options exist: setting up a local subsidiary, hiring independent contractors, or working with a PEO. Each has different costs, compliance burdens, and trade-offs. Knowing the differences helps you pick the model that actually fits your plans.

EOR vs. Setting Up a Local Entity

The choice comes down to size, speed, and commitment. An EOR works best if you’re hiring under 15 people or moving fast into a new market. One to two weeks for setup beats the 3–6 months needed for a subsidiary, which demands legal incorporation, government registration, local directors, the whole infrastructure. An EOR eliminates upfront costs – you just pay the monthly fee. That’s gold for startups, pilots, and testing new markets without big capital outlay. On the flip side, if you’re hiring 15+ people or planning permanent Greenlandic operations, a subsidiary might make financial sense long-term and lets you bid on government contracts – which require local registration. You also get full control over HR and payroll, though the admin burden and ongoing costs are much higher.

EOR vs. Hiring Independent Contractors

This one comes down to what the role actually is and how much legal risk you want to take. Contractors fit short-term, project-based work – a website redesign, a consulting project, a specific deliverable. Employees hired through an EOR fit permanent, integrated positions. Here’s the thing: Greenlandic law has strict tests for what makes an employee. If someone works regularly, takes direction from you, and is woven into your operations, they’re an employee legally – period – even if you call them a contractor. Misclassifying creates huge liability: penalties, back taxes, social security bills. An EOR cuts that risk by creating a formal employment relationship with proper contracts and statutory protections. For ongoing roles and core team members, an EOR is safer and better for employee retention. For true project work, contractors through Remote People can offer flexibility, but you need solid contract language to avoid crossing into employee territory.

EOR vs. PEO

These two are often confused but work very differently. A PEO handles your HR functions but doesn’t become the legal employer – you stay as official employer in a “co-employment” setup. That works if you already have a Greenlandic company and want to hand off payroll and benefits to someone else while keeping control. The downside: shared liability for compliance, so if something goes wrong, you both shoulder the blame. An EOR is the legal employer – they own all the liability and responsibility. That’s the right move if you have no Greenlandic entity and want to hire without building one. In Greenland, there’s no formal PEO framework in law, and co-employment isn’t really recognized the way it is in other countries. That makes EOR the legally cleaner path and what authorities prefer. If you already run a Greenlandic subsidiary, you might explore a PEO with an international provider, but an EOR is simpler and legally more straightforward for new market entry.

Public Holidays in Greenland

Greenland has 11 statutory holidays in 2026. Employees get paid time off, no matter if they normally work weekends or shifts. Some unofficial days like Whit Monday (May 25) and Christmas Eve (December 24) are also widely observed as half or full days under CBAs – not required by law but standard practice. Work on public holidays usually gets premium pay (1.5x to 2x base) per CBA. Your EOR tracks all of this and makes sure employees are paid correctly.

How to Get Started with an EOR in Greenland

Starting an EOR hire in Greenland is straightforward and fast – usually 1–2 weeks from first contact to signed contract. Even if you’ve never hired in Greenland before, the process is designed to be accessible. Here’s what to expect.

• Define Your Hiring Needs: Clearly specify the role, title, job responsibilities, required qualifications, expected salary, and start date. Provide the candidate’s full name, contact information, and passport details (for non-Nordic nationals). This information enables the EOR to draft a compliant employment contract and initiate any necessary work permit applications in parallel.
• Request a Customized Quote: Contact an EOR provider with your hiring details to receive a detailed proposal including gross salary, AMA contributions, EOR service fees, and any additional charges. Compare quotes from multiple providers to ensure competitive pricing and full service coverage. Remote People’s transparent pricing provides upfront cost estimates for Greenland hiring.
• Review and Sign the EOR Agreement: Once you have selected an EOR provider, review the service agreement outlining the EOR’s responsibilities, fee structure, dispute resolution, and termination terms. Ensure you understand the scope of services included (payroll, tax filing, benefits, work permits, compliance reporting) and any exclusions or additional costs.
• Prepare Employment Contract and Documentation: The EOR will draft the employment contract in Greenlandic or Danish, incorporating the role details, salary, benefits, leave entitlements, notice periods, and any CBA references. You review and approve the contract, ensuring it reflects your agreed terms. For non-Nordic employees, gather passport scans, medical certificates, and educational credentials for the work permit application.
• Finalize and Sign with Employee: The employment contract is signed by both the EOR (as official employer) and the employee. The employee receives a copy for their records. Work permit applications for non-Nordic nationals are submitted to SIRI at this stage, with processing taking approximately 3 months. Payroll processing begins on the employment start date.

Ready to hire in Greenland? Contact Remote People today to discuss your hiring goals, receive a customized quote, and begin your EOR onboarding process. Our team provides end-to-end support from contract drafting through ongoing compliance, so you get smooth hiring and management of your Greenlandic team.

Where companies hiring in Greenland expand next

Companies building a Nordic presence frequently expand across the region, drawing on Nordic Council mobility and shared labor frameworks. Teams frequently add Denmark for seamless compliance continuity with the parent country; hiring in Iceland often follows for aligned Nordic benefits and compensation standards; an EOR partner in Norway is a common next step, offering Nordic Council mobility and aligned labor norms; and Sweden rounds out the regional footprint with shared Nordic labor frameworks.