Employer of Record (EOR) in Bulgaria

Employment Laws and Regulations in Bulgaria

Employment Contracts

Bulgarian employment is governed by the Labour Code (Кодекс на труда), originally adopted in 1986 and amended many times since, with the Ministry of Labour and Social Policy as the principal regulator. Every contract must be in writing and registered with the National Revenue Agency before the employee begins work. Article 66 requires the contract to specify the job title and description, place of work, start date, duration, annual leave entitlement, notice period, and gross remuneration.

Indefinite contracts are the default. Fixed-term contracts are allowed only for specifically defined grounds such as seasonal work, project completion, or temporary replacement, and may not exceed three years. Bulgarian-language contracts are the norm, though bilingual English-Bulgarian versions are common and enforceable provided the Bulgarian version controls in case of dispute.

Working Hours and Overtime

The standard workweek in Bulgaria is 40 hours, normally arranged as eight hours per day across five days (Labour Code Article 136). Overtime is capped at 150 hours per calendar year, with daily limits of six hours of overtime in any two consecutive days and 30 hours of overtime per month under Article 146.

The overtime premium is at least 50% above the regular hourly rate on weekdays, 75% on rest days, 100% on official public holidays, and 50% for night work between 22:00 and 06:00. Overtime must be recorded in a dedicated register that employers retain for at least three years.

Working hours, overtime caps, and premium-pay rates in Bulgaria are set by the Labour Code and Ordinance on the Structure and Organization of Wages. The table below consolidates the statutory minimum premiums and the annual, monthly, and daily overtime ceilings that apply to most private-sector employees.

Minimum Wage

The Bulgarian minimum wage rose to EUR 620.20 per month (approximately $670) on January 1, 2026, a 12.6% increase from the 2025 level of EUR 550.66. The hourly minimum is EUR 3.74 (approximately $4.04).

The fixed conversion rate was published by the Bulgarian National Bank. The new rate was set by Council of Ministers Decree No. 243 of 13 November 2025 and coincides with Bulgaria’s adoption of the euro. The minimum wage applies to all sectors and all employees regardless of nationality, and also serves as the floor for calculating most social security benefits.

Probation Period

Bulgaria allows a probationary clause of up to six months under Labour Code Article 70, which cannot be extended. For fixed-term contracts shorter than one year, the probation cap drops to one month.

The probation must be stated in the written contract; if no probation is mentioned, the employment is permanent from day one. During probation either side may terminate without notice and without cause, a flexibility that makes it a widely used provision in Bulgarian hiring. Detailed rules on probation are on our Bulgaria probation period page.

Leave Entitlements

Bulgaria’s statutory leave framework is set out in Chapter VIII of the Labour Code and is among the more generous in the European Union, combining paid annual leave, sick leave funded by the NSSI from day four, and one of Europe’s longest maternity leave entitlements at 410 days.

Annual Leave

Bulgarian employees are entitled to a minimum of 20 working days of paid annual leave per calendar year under Labour Code Article 155. The right to use leave accrues after four months of employment, and annual leave continues to accrue during probation.

Unused leave carries over for up to two years; after that it is forfeited unless the employer prevented the employee from taking it. Employees with reduced working capacity of 50% or more are entitled to 26 working days, and certain categories such as teachers and workers exposed to hazardous conditions receive enhanced allowances of up to 48 days.

Sick Leave

Sick leave in Bulgaria is covered jointly by the employer and the National Social Security Institute. For the first three working days of each sick spell, the employer pays 70% of the employee’s average daily gross salary.

From day four onward, the NSSI pays 80% of the average insured income over the prior 18 months. For work accidents and occupational illnesses the NSSI rate rises to 90%.

A medical certificate issued by a doctor or medical commission is required for every absence and must be filed with the employer within two working days. Cumulative paid sick leave may last up to 18 months before being converted to a disability assessment.

Maternity Leave

Bulgarian maternity leave is 410 calendar days, split as 45 days before the expected birth and 365 days after, funded at 90% of the mother’s average gross daily insured income by the NSSI. Eligibility requires at least 12 months of prior social security contributions.

After the child turns six months, the remainder of the 410 days can be transferred to the father or a grandparent with the mother’s written consent. Employers cannot dismiss a pregnant employee or a mother on maternity leave except in cases of company liquidation, and the employee has the right to return to the same position at the end of the leave.

Paternity Leave

Fathers are entitled to 15 calendar days of paid paternity leave starting from the day the child is discharged from the hospital, paid at 90% of average insured income by the NSSI. A 2022 reform introduced an additional two months of transferable paternity leave that can be taken any time before the child reaches eight years of age, independent of the mother’s entitlement. The father must have at least 12 months of insured service to qualify.

Other Statutory Leave

Bulgarian law provides several additional paid leave categories that an EOR will track alongside annual and sick leave.

• Marriage leave: 2 working days on the employee’s own marriage.
• Bereavement leave: 2 working days on the death of a parent, spouse, child, or sibling.
• Blood donation leave: 1 working day per donation, plus the day after.
• Study leave: up to 25 working days per year for employees pursuing approved education.
• Jury and civic duty leave: unpaid time off for summons to court or civil service.
• Childcare leave until age two: paid at the minimum wage level by the NSSI after the 410-day maternity period ends.

Statutory Employee Benefits

Bulgaria’s mandatory benefits sit on top of the social security system and are mostly funded through payroll contributions rather than direct employer payments. The National Health Insurance Fund provides universal public healthcare at a combined 8% contribution rate (4.8% employer, 3.2% employee), giving employees full access to primary care, hospital treatment, and prescription drugs at state-negotiated prices. The public pension system, run by the National Social Security Institute, is split between a pay-as-you-go state pillar (DOO) and a supplementary mandatory private pension fund (UPF), together delivering a defined retirement benefit from age 64 for men and 61 years and 10 months for women in 2026.

Beyond the contribution-funded benefits, employers must cover the work accident and occupational disease fund at 0.4%–1.1% of payroll depending on sector risk, enrol employees in unemployment insurance, and fund 70% of the first three days of any sick spell. Bulgaria does not require employers to provide private medical insurance, meal vouchers, or transport allowances by statute, though all three are popular voluntary benefits in competitive talent segments.

A full breakdown of legally required and customary benefits is on our Bulgaria employee benefits page. Rate details for every contribution line are in the payroll tables in the next section and on our Bulgaria payroll and tax page.

Recent Regulatory Updates (2026)

The single biggest change of 2026 for Bulgarian payroll is the country’s adoption of the euro on January 1, 2026, completed at a fixed conversion rate of EUR 1 = BGN 1.95583 (European Central Bank). Every payroll figure from that date onward, including salaries, social security bases, tax thresholds, and pension benefits, is denominated in euros. A dual-display rule required employers to show both EUR and BGN amounts on payslips throughout a transition window.

Alongside the currency switch, the government raised the statutory minimum wage by 12.6% to EUR 620.20 per month, lifted the maximum monthly insurance base to EUR 2,111.64, and moved the minimum insurance base to EUR 550.66. Bulgaria also rolled out electronic employment records, replacing the paper labour book that had been in use since the communist era, and extended its SAF-T tax reporting obligations to more categories of payroll data.

Work Permits and Visas in Bulgaria

Work Permit Requirements

Who Needs a Work Permit

EU, EEA, and Swiss citizens enjoy full free movement and can work in Bulgaria without any permit; they only need to register their residence with the Migration Directorate after three months of stay. All other nationals, including UK citizens post-Brexit, need a work permit or EU Blue Card before starting employment. Certain categories are exempt, such as intra-company transferees covered by bilateral agreements, accredited journalists, and holders of permanent residence permits.

Eligibility and Required Documents

For non-EU hires, the employer applies for a Single Permit that combines work and residence authorisation through the Employment Agency. The standard documentation set includes a signed employment contract, a detailed job description, proof that the role was advertised to the Bulgarian and EU labour market for at least 15 days (the labour market test), the employee’s passport, notarised and apostilled diploma or professional qualification, a clean criminal record certificate from the country of origin, and medical insurance coverage. All foreign-language documents must be translated into Bulgarian and notarised.

Processing Time and Validity

A Single Permit typically takes one to three months from application to issuance, including the labour market test. The EU Blue Card route, reserved for highly skilled professionals earning at least 1.5 times the average Bulgarian gross salary, is faster at two to three months and skips the labour market test.

Initial permits are valid for the duration of the employment contract up to a maximum of one year for the Single Permit and up to four years for the Blue Card. Delays most often come from missing apostilles, incomplete qualification documents, or sector-specific licensing requirements.

Renewal Process

Renewal applications must be filed at least 14 days before the current permit expires. The employee can continue working while the application is pending, provided the employer has filed before the expiry date.

Documentation mirrors the initial application, with an updated contract, confirmation of ongoing employment, and refreshed insurance coverage. After five years of continuous lawful residence, the employee becomes eligible for long-term EU resident status.

Common Visa Types for Foreign Workers

Bulgaria offers several pathways for foreign workers depending on skill level, assignment length, and nationality. The table below summarises the five most common work-authorising routes, their duration limits, whether each one counts toward long-term EU residence, and typical processing times reported by the Bulgarian Ministry of Foreign Affairs.

How an EOR Handles Work Permits

Because Bulgarian work permit sponsorship must be filed by a registered local employer, the EOR is well placed to handle Single Permit, Blue Card, and ICT applications on behalf of client companies. The provider prepares the labour market test, compiles the application package, liaises with the Employment Agency and Migration Directorate, and tracks renewal deadlines.

Work permit sponsorship typically extends the one to two week EOR onboarding window by two to three months, so clients should plan accordingly when hiring third-country nationals. RemotePeople supports full sponsorship for EU Blue Card and Single Permit routes in Bulgaria.

Payroll, Taxes, and Social Security in Bulgaria

Employer Contributions

Bulgarian employers contribute 18.92%–19.62% of gross salary to social security, split between the state pension fund, health insurance, and several smaller funds. The exact total depends on the work accident and occupational disease fund rate, which ranges from 0.4% to 1.1% based on sector risk classification.

The administration and services sector, where most white-collar roles sit, carries a 0.5% accident rate, producing a total employer burden of 19.02%. Contributions are capped once an employee’s monthly gross salary exceeds EUR 2,111.64 (approximately $2,280).

Employee Contributions

Bulgarian employees contribute a flat 13.78% of gross salary to social security, deducted at source by the employer every month. The same EUR 2,111.64 monthly cap applies. Together with the 10% flat income tax, a typical Bulgarian worker sees a combined payroll deduction of roughly 22.4% before any personal allowances.

Income Tax

Bulgaria applies a flat 10% personal income tax to all employment income, making it one of the simplest tax regimes in the European Union. There are no brackets, no personal allowance for ordinary earners, and no surtaxes for high incomes.

The only deductions from taxable income are voluntary pension, health, and life insurance contributions (capped at 10% of taxable income each) and donations to approved non-profits (up to 5%). Employees with reduced working capacity of 50% or more get an annual tax allowance of EUR 3,834.

Payroll Cycle

Bulgarian payroll is paid monthly, typically on the last working day or within the first five days of the following month, by bank transfer to a local account. Cash payments are legal but uncommon and require receipt documentation.

Employers must issue an itemised payslip each month showing gross salary, each social security and tax line, and net pay. Declaration 1 (individual contribution data) and Declaration 6 (aggregate employer data) must be filed with the National Revenue Agency by the 25th of the month following the reporting period. Annual reconciliation statements are due by April 30 each year.

13th Month Salary and Bonus Pay

A 13th month salary is not mandatory in Bulgaria. Employers have no statutory obligation to pay an annual bonus, vacation bonus, or profit share.

Where 13th month pay is offered, it is a contractual benefit that sits alongside standard salary, is fully subject to the 10% income tax and social security contributions, and is usually paid with December payroll or at the end of the financial year. Discretionary performance bonuses are common in private-sector roles but remain entirely voluntary.

Cost of Hiring Through an EOR in Bulgaria

EOR Service Fees

Employer of record fees in Bulgaria typically range from $300 to $600 per employee per month, billed as a flat USD amount regardless of salary. The fee covers contract drafting and management, monthly payroll processing, tax withholding and remittance, social security administration, statutory leave tracking, and ongoing labour-code compliance. Full details on Bulgarian payroll mechanics are available on our Bulgaria payroll and tax page.

Total Employment Cost Breakdown

The real cost of hiring in Bulgaria is the gross salary plus the employer social security contributions plus the EOR service fee. On a $1,200/month gross salary in the administration and services sector, the total monthly employer cost is approximately $1,828, or roughly 52.4% above the gross figure. All USD amounts are approximate conversions at $1 = EUR 0.925 (April 2026 rate).

Ready to hire in Bulgaria? Get started with RemotePeople and we will handle employment contracts, payroll, tax withholding, and full Bulgaria compliance. No local entity needed.

Benefits of Using an EOR in Bulgaria

Using an employer of record in Bulgaria cuts the time between signing a candidate and having them on the books from months to days. A greenfield Bulgarian entity typically takes three to six months to incorporate, register with the NRA, obtain VAT numbers, and set up local banking and payroll, while an EOR can onboard the same hire in one to two weeks because the legal infrastructure is already in place.

The compliance dividend is just as important. Bulgaria’s Labour Code runs to more than 400 articles, the NRA files are due by the 25th of each month, social security ceilings reset every January, and 2026 brought the country’s full transition to the euro.

An EOR that specialises in Bulgaria keeps on top of each change, indemnifies the client against employer-side liability, and typically carries employers’ liability insurance as a backstop. For companies hiring one to fifteen people, that is almost always cheaper than paying an in-country CFO, labour lawyer, and local accountant.

The model also scales in both directions. Need a second hire in Plovdiv next month? Add them to the same EOR contract.

Need to close the Bulgaria operation after a pivot? Give statutory notice and exit; there is no entity to wind down, no tax clearance queue, and no minority shareholder negotiations.

That flexibility is why EORs are the default route for cross-border hiring in Bulgaria’s one-to-fifteen-employee band.

Termination and Offboarding in Bulgaria

Notice Periods

Statutory notice periods for indefinite contracts are 30 calendar days from either side, extendable by mutual agreement up to three months. Fixed-term contracts require a three-month notice or the remainder of the contract term, whichever is shorter.

Employees in positions of material responsibility (e.g. cash handling or asset management) may have a longer notice period of up to two months if required for a proper handover. Notice must be given in writing and can be paid in lieu at the employer’s discretion.

Statutory notice periods in Bulgaria vary by contract type, position level, and whether the employee is still in probation. The table below summarises the minimum periods set by Articles 326 and 335 of the Bulgarian Labour Code, along with the probation rule under Article 71.

Severance Pay

Bulgarian severance entitlements are concentrated in Articles 220, 222, and 331 of the Labour Code. The schedule below shows the minimum severance employers owe at key tenure milestones, the base salary used for the calculation, and the legal basis for each row.

Calculation Method

Severance pay in Bulgaria is set out in Labour Code Article 222. The baseline is one month of gross salary for dismissals on economic grounds such as redundancy, closure, or restructuring, increasing to four months for mutual-agreement terminations initiated by the employer.

Severance is calculated on the employee’s last gross monthly salary, including any regular bonuses or allowances that formed part of the contractual pay. Unused annual leave is always paid out separately on exit.

Caps and Exceptions

There is no statutory maximum cap on severance, but the one-month baseline is low enough that most dismissals stay within predictable cost brackets. Employees dismissed for cause (gross misconduct, theft, repeated absence without authorisation, or breach of confidentiality) are not entitled to severance under Article 190.

Fixed-term contracts that expire naturally carry no severance obligation. Protected categories such as pregnant employees, mothers on maternity leave, and employees on sick leave can only be dismissed in very limited circumstances and with prior approval from the Labour Inspectorate.

Grounds for Termination

Bulgarian law recognises both termination with cause (disciplinary dismissal under Article 190) and termination without cause (economic or organisational grounds under Article 328). Disciplinary dismissal requires documented warnings, an internal investigation, and the employee’s written explanation before the decision is issued.

Economic dismissals must be supported by organisational documentation showing the role is genuinely being eliminated. Mutual agreement terminations under Article 331 are common in practice because they let both sides avoid procedure and usually come with an uplifted severance package.

EOR vs. Other Hiring Models in Bulgaria

EOR vs. Setting Up a Local Entity

Choosing between an Employer of Record and setting up your own legal entity in Bulgaria comes down to timeline, upfront cost, ongoing administrative burden, and how quickly you can scale up or wind down. The table below lays out both paths side by side across setup time, cost, compliance risk, and flexibility so you can match the right model to the size and duration of your Bulgaria hiring plan.

For most companies hiring their first handful of people in Bulgaria, the EOR is the better economic choice. A single-member OOD (EOOD) can cost $5,000–$15,000 to set up properly once legal fees, notary costs, and capital deposit are included, with another $10,000–$25,000 per year to maintain the accounting, payroll, and compliance function that any entity in the EU requires.

The break-even point against an EOR typically sits around 15 employees. Below that, the monthly EOR fee is lower than the fixed cost of running an in-country finance and HR function; above it, the per-head savings of owning the entity start to compound. Companies that plan to bid on Bulgarian government tenders or need a local entity for regulatory reasons (financial services licensing, pharmaceutical distribution) will need their own OOD regardless of team size.

The exit story is just as important as the setup story. Closing a Bulgarian entity is a multi-month affair involving tax clearance, asset liquidation, and Commercial Register filings. Closing out an EOR relationship takes a single notice period.

EOR vs. Hiring Independent Contractors

Classifying a Bulgaria-based worker as an independent contractor rather than an employee can expose you to back-taxes, unpaid social contributions, and reclassification penalties if the working relationship looks like employment in practice. The table below contrasts EOR employment with contractor engagement across legal relationship, tax and benefits treatment, IP ownership, and misclassification risk so you can pick the right model role by role.

Hiring independent contractors is only appropriate in some cases, such as short-term projects, specialised consulting engagements, and roles with genuine autonomy over hours and method. Bulgarian tax and social security authorities apply substance tests that look at working hours, supervision, equipment, exclusivity, and the economic dependence of the worker on a single client.

If a contractor relationship is reclassified as employment, the consequences flow backwards: the client becomes liable for unpaid employer social security contributions (19.02%), unpaid employee contributions (13.78%) and income tax (10%), interest on the underpaid sums, and administrative penalties from the NRA and Labour Inspectorate. The contractor also gains a retroactive claim to statutory leave and severance. RemotePeople’s contractor management solution in Bulgaria handles compliant contractor payments, written agreements, and classification reviews so clients can use the contractor route where it fits without carrying the compliance exposure.

EOR vs. PEO (Professional Employer Organization)

EORs and PEOs both simplify international hiring, but only an EOR becomes the legal employer of record in Bulgaria — a critical distinction when you don’t have a local entity of your own. The table below maps the practical differences across legal employer status, entity requirement, liability allocation, and scope of coverage.

The single clearest difference between the two models is entity ownership. An EOR already holds the Bulgarian company that signs employment contracts, pays payroll, and files with the NRA, so the client needs nothing on the ground. A PEO works in co-employment with an entity the client already owns, sharing HR administration and payroll tasks while leaving the employment relationship itself with the client.

Bulgaria does not have a dedicated PEO licensing framework in the way the United States does. What gets marketed as PEO in Bulgaria is usually payroll outsourcing, HR-as-a-service, or consulting support layered on top of a client-owned OOD. Because of that, the practical choice for a foreign company without a Bulgarian entity is almost always between incorporating or using an EOR.

Public Holidays in Bulgaria

Bulgaria observes a defined set of official public holidays on which most private-sector employers must give staff a paid day off (timeanddate.com: Bulgaria 2026). The table below lists the statutory holidays employers need to build into payroll calendars and leave planning for the year, along with the date rule for each.

Bulgaria observes 14 public holidays in 2026, including the full Orthodox Easter cycle from Good Friday through Easter Monday. When a public holiday falls on a Saturday or Sunday, the government typically declares the following Monday a substitute day off.

Work performed on a public holiday must be compensated at double the regular rate (100% premium) under Labour Code Article 264. Payroll calendars should build these days into monthly timesheets and leave tracking.

How to Get Started with an EOR in Bulgaria

Starting the EOR process with RemotePeople takes a single conversation and a few signed documents. The five steps below cover a standard onboarding for an EU-national employee based in Bulgaria.

• First, share the role details with RemotePeople, including the job title, salary range, start date, and whether the candidate needs work permit sponsorship.
• Second, RemotePeople prepares a cost estimate in USD, including gross salary, employer contributions, the EOR fee, and any visa costs if applicable.
• Third, sign the EOR service agreement and send the employee’s details, identification, bank account, and any required qualification documents.
• Fourth, RemotePeople drafts the Bulgarian employment contract, registers the contract with the NRA, and enrols the employee with the NSSI and NHIF.
• Fifth, the employee starts work on the agreed date, and RemotePeople runs monthly payroll, tax withholding, and ongoing compliance for the life of the engagement.

Contact our team to get a fixed quote for hiring in Bulgaria and a realistic onboarding timeline based on your role, team size, and nationality mix.

Where companies hiring in Bulgaria expand next

Teams hiring in Bulgaria commonly expand across Central and Eastern Europe, where competitive labor costs and EU market access anchor regional growth. Many companies add an EOR partner in Poland first, drawing on matching cost-to-quality tier. The Czech Republic follows as similar cost profile and comparable hiring speed, while a team in Romania offers parallel labor-cost tier and talent supply. Operations in Hungary is often the fourth step, valued for aligned compensation ranges and delivery speed.