Background: In 2018, 14% of employees in the European Union had fixed-term contracts. Fixed-term contract positions are often less secure than permanent contract positions. Perceived job insecurity has been associated with increased rates of mental ill health. However, the association between fixed-term contract positions and mental ill health is uncertain. A recent review concluded that the quality of most existing studies is low and that the results of the few studies with high quality are contradictory. Objective: This study aims to estimate the incidence rate ratios (RRs) of psychotropic drug use and psychiatric hospital treatment. These ratios will be considered, first, in relation to the contrast fixed-term versus permanent contract and, second, to fixed-term contract versus unemployment. Methods: Interview data with baseline information on employment status from the Danish Labor Force Surveys in the years 2001-2013 will be linked to data from national registers. Participants will be followed up for up to 5 years after the interview. Poisson regression will be used to estimate incidence RRs for psychiatric hospital treatment for mood, anxiety, or stress-related disorders and redeemed prescriptions for psychotropic drugs, as a function of employment status at baseline. The following contrasts will be considered: full-time temporary employment versus full-time permanent employment and temporary employment (regardless of weekly working hours) versus unemployment. The analyses will be controlled for a series of possible confounders. People who have received sickness benefits, have received social security cash benefits, have redeemed a prescription for psychotropic drugs, or have received psychiatric hospital treatment for a mental disorder sometime during a 1-year period preceding baseline will be excluded from the study. The study will include approximately 134,000 participants (13,000 unemployed, 106,000 with permanent contracts, and 15,000 with fixed-term contracts). We expect to find approximately 16,400 incident cases of redeemed prescriptions of psychotropic drugs and 2150 incident cases of psychiatric hospital treatment for mood, anxiety, or stress-related disorders. Results: We expect the analyses to be completed by the end of 2021 and the results to be published in mid-2022. Conclusions: The statistical power of the study will be large enough to test the hypothesis of a prospective association between fixed-term contract positions and mental illness in the general workforce of Denmark.