Employer of Record & PEO in Bulgaria
Hire & manage teams remotely in Bulgaria without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
How NNRoad Employment & PEO Services Work?
NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in Bulgaria. Registering a legal entity in Bulgaria as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enables companies to hire and manage employees in Bulgaria in full accordance with local labor laws in under a week.
Employer of Record in Bulgaria
Employer of Record (EOR) services are for companies who do not have a legal entity in Bulgaria, but who want to hire in Bulgaria. Employment and full liability are outsourced to NNRoad.
➊ You interviews & select the candidates you want to hire in Bulgaria.
➋ NNRoad arranges a local labor contract with your new employee.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad organizes, manages & processes payroll in Bulgaria in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in Bulgaria while NNRoad manages payroll & HR liabilities.
- Hiring of and termination of employees/local labor contracts (contract administration – checking right to work legally in Bulgaria, service contract (including position, start date, place of work etc), relieving letter if necessary).
- On-boarding and off-boarding employees following local law practice.
- Complete payroll solution and statutory benefit administration like the social security (DOO), the health insurance (ZO) and the additional pension insurance with Universal Pension FUND (DZPO-UPF); as well as the related Personal Income tax (PIT).
- Employee management – employee record retaining, timekeeping, bonus and allowance management, expenses and claims, and leave employee database management accordingly to the local law.
- Mandatory contributions and statutory benefits policy updating on a regular basis according to the local laws.
- Payment management, including invoicing customers/clients and salary payments and providing monthly payroll reconciliation reports.
- Guidance regarding application of the social security and labour legislation.
- Foreigner VISA application, if needed.
Payroll & PEO in Bulgaria
Professional Employment Organization (PEO) services are for companies who have a legal entity in Bulgaria, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.
➊ You interviews & select the candidates you want to hire in Bulgaria.
➋ NNRoad organizes, manages and processes payroll for your local employees in full compliance with local employment laws.
➌ You maintain a normal working relationship and manage your team in Bulgaria while NNRoad manages payroll & HR compliance.
- Registering and de-registering the necessary company and personnel information like labor contracts and monthly salaries including sickness lists for payroll calculation in compliance with local rules.
- Calculation of the payroll and all additions (accruals) of the monthly salaries, such as bonuses, overtime, additional medical, health or pension insurances.
- Calculation of all deductions from salary like loan repayments and disbursements, individual monthly installments to the medical insurance and pension funds or any other statutory required deductions etc.
- Submission of social security obligations.
- Pro-rata calculation for people who join/resign.
- Providing a monthly payroll summary to the Company.
- Handling of the audits by NSSI (payroll and social security costs and the statutory reporting related);
- Preparation of letters to NSSI regarding any disputes, or the cases of rejected or prolonged compensations to the employees.
- The monthly issue of electronic pay-slips.
Advantages of NNRoad's Bulgaria Employment Services
- With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in Bulgaria.
- Pay as you go
- Dedicated account manager – One point of contact for multiple locations
- Employment & termination processing
- Complete payroll solution and statutory benefit according to local laws
- With EOR/PEO solutions you can hire staff while waiting for the registration of your company in Bulgaria.
- NNRoad only works with professional locally licensed partners
- GDPR compliant
- NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law
- NNRoad provides foreigner VISA application services, if needed
Employment Compliance in Bulgaria
Taxes & Payroll in Bulgaria
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%
Working Hours and Overtime in Bulgaria
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.
Mandatory Contributions in Bulgaria
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.
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.
Termination Laws and Severance Pay 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.
Public Holidays in Bulgaria
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
Paid Leave 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.
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
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.
Immigration Laws in Bulgaria
For foreign nationals seeking access into Bulgaria, a variety of visas are available. As a member of the European Union, Bulgaria permits citizens of other EU member states to work without a visa or permit.
Bulgarian visas are available for the following foreign nationals:
- Type A visas for airport transit
- Type C visas for short stay
- Type D visas for long stay