Hire in Bulgaria
Bulgaria PEO &
Employer of Record
Hire & manage teams remotely in Bulgaria without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Hire Employees in Bulgaria
The NNRoad Advantage ☺
Pay as you go
Global account manager
Employer of Record in Bulgaria
Compliance & Payroll
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in Bulgaria
Compliance & Payroll
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in Bulgaria
Employee Income Taxes:
Individuals in Bulgaria are taxed according to their tax residency status. Residents of Bulgaria are taxed on their worldwide earnings. Non-residents are solely taxed on income earned in Bulgaria, which has a rather broad legal meaning. In general, this refers to any money received from economic activity carried out in Bulgarian territory or through the sale of property in Bulgaria.
A flat tax rate of 10% applies to all personal income, with some exceptions.
Employer Costs in Bulgaria
13.72% – Social security (pension, unemployment, common disease and maternity, supplementary compulsory pension)
4.80% – Health insurance
0.40% – 1.10% – Accident at work & occupational illness fund
Total costs: 18.92% – 19.62%
10.58% – Social security (pension, unemployment, common disease and maternity, supplementary compulsory pension)
3.20% – Health insurance
Total costs: 13.78%
Bulgaria has a social security system. It is a type of insurance that protects employed people in the event of a loss of income. The National Social Security Institute (NSSI) is a government-run organization that oversees the Republic of Bulgaria’s social security system.
People subject to state social insurance are insured in:
- “General (Non-Occupational) Disease and Maternity” fund for common diseases and maternity, including insurance for temporary incapacity for work, temporary reduced working capacity, and maternity;
- “Pensions” fund for disability due to general (non-occupational) disease, old age, and death;
- “Labor Accidents and Occupational Diseases” fund for labor accidents and occupational diseases, including disability, death, temporary incapacity for work, and temporary reduced working capacity;
- “Unemployment” fund for unemployment.
Benefits & Insurance in Bulgaria
Pension funds in Bulgaria are essential for retirement benefits. There are two types: mandatory social security funds managed by the state Bulgarian Financial Supervision Commission, and voluntary pension funds offered by private companies or financial institutions. The Bulgarian National Social Security Institute manages mandatory funds. These funds ensure financial security during retirement by accumulating and managing contributions made by employees and employers.
The insured, healthcare providers, and third-party payers: the National Health Insurance Fund, the single payer in the social health insurance (SHI) system, and voluntary health insurance companies are the main participants in the insurance system (VHICs).
The Ministry of Health is responsible for public health services, emergency care, transplantations, transfusion haematology, tuberculosis treatment, and inpatient mental healthcare, and the health insurance system covers diagnostic, treatment, and rehabilitation services as well as medications for insured individuals.
Accident At Work And Occupational Illness Insurance
An accident at work is any injury or death that occurs as a result of the performance of work in the context of a labor/employment relationship. An occupational disease is one that develops as a result of hazardous causes in the workplace or during the labor process.
In order to have entitlement to benefits for accidents at work and occupational diseases, you must be insured against accident at work and occupational diseases risks. This is mandatory for the following:
- Workers and employees hired to work for one or more employees;
- State employees;
- Armed forces personnel;
- Judges, prosecutors, investigators, court bailiffs, registry judges, court employees;
- Persons in elected positions;
- Religious clerics of the Bulgarian Orthodox Church and other registered religious faiths;
- Candidates for junior judges, junior prosecutors and junior investigators;
Working Hours in Bulgaria
Working Hours Per Week
The standard working time in Bulgaria is 8 hours per day and 40 hours per week. It is possible to have an extended working time, but only with the conditions listed below:
- it is usually used for operational and business reasons;
- the employer must agree to the adoption of longer working hours with the employee organization;
- the extended working time is implemented through a written instruction that includes the following information: the time period, the employee, the duration, and specifics on the completion and compensation of the extended working time.
Within one year, overtime cannot exceed 150 hours, within one working week it may not exceed 6 hours of day work and 4 hours of night work; within one working month it may not exceed 30 hours day work and 20 hours night work.
The employee has to be remunerated in case of overtime:
- 50 % for work on working days;
- 75 % for work on holidays;
- 100 % for work on public holidays;
- 50 % for work at working time calculated on a weekly or longer basis.
Termination Laws in Bulgaria
Both the employer and the employee have the right to end the employment relationship under the Bulgarian Labour Code. An employer, on the other hand, can only cancel a contract on exhaustive grounds. It is crucial to note that Bulgarian labor law contains specific requirements for the termination of an employment contract by the employer, which must be followed by the letter. The termination of the contract must be done in writing.
An employer may terminate the employment contract by giving the employee a written notice in the following cases:
- upon closure of the enterprise or part of the enterprise;
- upon staff reduction;
- upon reduction in the volume of work resulting in a decrease in the number of employees;
- upon idling for more than 15 working days;
- where the employee lacks the capacity for efficient execution of the work;
- where the employee does not possess the educational level or professional qualification required for the work executed;
- upon change of the job description and the employee no longer satisfies the said requirements;
- where the position occupied by the employee must be vacated for reinstatement of a wrongfully dismissed employee, who previously occupied the same position.
For dismissals on particular grounds, the statutory maximum severance payment is one month’s salary (e.g. closure of the establishment, partial closure of the establishment, staff cuts, etc.).
If an employee has worked for at least five years and has not earned such severance compensation in the previous five years, the employee is entitled to two months’ income for dismissal owing to incapacity or health hazard.
Two months’ income if an employee’s employment contract is terminated for any reason after he or she has attained the required retirement age and length of service. If the employee has worked for the last ten years with the same employer, the severance pay amounts to six months’ salary. Such severance payment shall be due only once.
Employment Contract in Bulgaria
The employment relationship between an employer and an employee begins with the signing of an employment contract, according to Bulgarian labor legislation.
According to Article 66 of the Labour Code, each employment contract must contain at least the following information:
- The identity of the parties;
- The place of work;
- Job description of the position and the character of the work;
- The term of the contract and the duration of the probation period;
- The amount of basic and extended paid annual holiday and of additional paid annual holiday;
- An equal termination notice period for both parties;
- The conclusion date of the contract and the date of the actual performance;
- The regular duration of the working day/week;
- The basic remuneration and supplementary remuneration of regular nature.
In most cases, the job contract is for an indefinite amount of time. The employment contract can also be made into a fixed-term employment contract. An explicit agreement between the parties is essential in this scenario.
A probation period of up to 6 months may be stipulated in the contract.
Types of Leaves in Bulgaria
After four months of service with the employer, an employee is entitled to 20 paid leaves per year. Employees will be eligible to an extended paid yearly leave, which will include the basic paid leave described above, based on the unique nature of their work. The government authority will set the kinds of employees and the minimum amount of leave.
Employees in Bulgaria are entitled to up to 18 months of sick leave in case they have a serious illness or disease. The company pays 70% of the employee’s wages for the first three days of sick leave. After the employee produces the necessary documentation, the National Social Security Institute covers the remainder of the sick leave at 80% of the regular salary rate or 90% for work-related sick leave or injury.
Unless the sick leave is due to a work accident or a professional disease, or if the employee is a minor, the employee must complete a mandatory six months of employment (and social security contributions) before becoming eligible for sick leave reimbursement.
Maternity And Paternity Leave
Maternity benefits are available to all female employees and consist of 410 days of paid maternity leave that typically begins 45 days before the due date. Maternity leave is required to be taken for 135 days. The maternity benefit will be paid to the employee as 90% of the regular salary rate by the National Health Insurance Fund. From the time the child is born, fathers are entitled to 15 days of paid paternity leave, paid at 90% of their usual wage. After completing at least one year of employment, fathers are eligible for this benefit.
Public Holidays in Bulgaria
- New Year’s Day – January 1
- Liberation Day – March 3
- Orthodox Good Friday – April 22
- Orthodox Easter – April 23-24-25
- Labour Day – May 1-2
- St. George’s Day – May 6
- Day of Slavonic Alphabet, Bulgarian Enlightenment and Culture – May 24
- Unification Day – September 6
- Independence Day – September 22
- Christmas Day – December 24-25-26-27-28