Employing in Bulgaria

Despite its small size, Bulgaria has a lot to offer. Situated in Southeast Europe, the country’s strongly contrasting continental and Mediterranean climates mean it isn’t short of breathtaking countryside, mountains primed for winter sports and glorious beaches. The low cost of living and friendly locals (who are very welcoming of foreigners) are also worth shouting about.

Following years of political instability and low productivity, Bulgaria’s economy has displayed steady annual growth, and it has now become a popular location for outsourced business. Multinationals like Boeing, BMW and Siemens are all outsourcing to small programming firms in Bulgaria!

Bulgaria has typically dominated in industries such as metallurgy engineering, machine manufacturing, chemicals, and land and agriculture. However, in recent years, the focus has shifted towards industries like energy, tourism, transportation, IT, food, pharmaceuticals, and textiles. Many of these fields are keen on foreign expertise, providing international companies with an excellent opportunity for expansion.


Our Expertise

Managing a global workforce in Bulgaria

Managing a workforce in Bulgaria requires navigating its unique employment laws and cultural nuances. TopSource's expertise in Bulgarian labour law is invaluable for companies operating in the region. Our comprehensive services ensure that businesses can focus on their core activities while we handle the complexities of managing a Bulgarian workforce, keeping them compliant and efficient in their operations.


Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.


Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.


Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success. 


Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.


Global Employee Cost Calculator

Estimate the cost of your new hire with our calculator. Simply enter their location and salary information in to this handy tool to see what will be spent in employment costs each month.


Hear from our clients about our EOR solutions in Bulgaria

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Client based in Ft Worth, Texas, USA

Salary currency

Bulgarian Lev (BGN)

Salary increases

There’s a requirement to provision for an allowance for length-of-service and professional experience in Bulgaria. These are a statutory requirement. This additional remuneration amounts to at least 0.6% of the employee’s basic monthly remuneration for each year of service and professional experience.

Salary pay date

Usually, the pay date in Bulgaria is between the period from the 25th calendar day of the current month until the 10th calendar day of the next month. At TopSource Worldwide, the pay date is the last working day of the month.

Employer costs

For 2021, the employer contribution for an employee from a third labour category is a minimum of 18.92% on top of the gross monthly salary, with a maximum income threshold of BGN 3000. Therefore, the total employers’ cost per employee per month would not exceed BGN 567.60.

Statutory insurances

The employer must meet the cost of occupation accident insurance which amounts to between 0.4% and 1.1% of the gross salary, depending on the job.

Social Security System

The Bulgarian social security system covers the following areas:

  • General disease
  • Work-related accidents
  • Occupational disease
  • Maternity
  • Unemployment
  • Old age
  • Death

The general principle is that each employee is automatically compulsorily insured.

The employer must pay the social security contributions by the 25th of the following month —Article 7 (1) of the Social Security Code (Кодекс за социално осигуряване). These contributions must be paid to the tax office’s account.

The social security contributions are generally calculated as follows:

  • Basic social security (unemployment insurance etc.): 19.7% of the gross salary Pension insurance: 5% of the gross salary
  • Health insurance: 8% of the gross salary

The employer must pay 60% of the insurance contributions; the employee pays the remaining 40%.

Contractual Provisions

Contract of employment

The relationship between an employer and employee is regulated by the Bulgarian Labour Code. The relationship between the parties around employment contracts is regulated by the Bulgarian Obligations and Contracts Act and by the written agreements between the parties themselves. Employment contracts must be filed with the Bulgarian National Revenue Agency within three days of signing (and no later than the date of commencement of employment prior to the employee performing their duties).

Work categories

The Bulgarian labour and social security law divides employees into three categories depending on the nature of their work and their specific working conditions: first, second and third category of work.

The Council of Ministers determines which type of work belongs to which category. The most common category is the third category of work, which provides the most standard and favourable working conditions. Generally, the legislation dictates that statutory rights apply to all employees equally. However, since the working conditions for the first and second categories of work employees are more harmful to their physical and mental state and working ability, those employees enjoy some additional employment and social security rights (such as an entitlement to early retirement).

Probationary period

The maximum allowed is six months. As per the law, there’s no minimum probationary period. It should be noted, however, that an extension of the initial probation period is not permissible.

Working hours

The standard working day is eight hours long and the work week equals 40 hours. This is also the maximum period allowed under the applicable law.


Overtime is only permitted in some particular cases provided by law, and for the employee to work overtime means to exceed the contractually agreed working time.

The employee is not obligated to work overtime (unless otherwise agreed). If instructed, overtime must be performed outside the regular working time (e.g., before the beginning/after the end of the working day or during the lunch break). The instruction to work overtime is made by the employer’s declaration of will and may be issued in writing.

If necessary, for operational reasons, the instruction may be issued after the performance of the overtime work.

It’s not possible to include provision for the salary to include overtime in the employment contract as it’s in addition to the contractually agreed remuneration. Overtime is governed by the labour legislation of Bulgaria.


The employer may terminate the employment contract by giving the employee notice only on certain grounds specified by statute. The grounds on which an employer is permitted to dismiss an employee with notice include redundancy.

Special rules apply to collective redundancies and selection for redundancy.

An employer is entitled to terminate an employment contract without notice in certain circumstances defined by statute, including where the employee has committed gross misconduct (such as disciplinary offences or imprisonment).

Employees receive special protection against dismissal in certain situations and at certain times. This applies, for example, to employees who are pregnant or on maternity leave, or who act as trade union officials or employee representatives.

An employee may resign at any time by giving the employer notice and is entitled to terminate the employment contract without notice in certain circumstances. Generally, the notice period for termination initiated by the employee is 30 days for an indefinite employment contract, unless the parties have agreed on a longer period, but not more than three months.

Holiday Entitlement

Leave is regulated in Bulgaria by the Bulgarian Labour Code.

In general, the minimum annual holiday entitlement is 20 working days. Certain categories of employees benefit from a higher minimum allowance. To be entitled to annual paid leave, the employee must have previous work experience of at least eight months with the same or previous employer.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Bulgaria

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

  • Understand the different types of EOR taxes
  • Stay up-to-date on the latest changes to EOR tax regulations
  • Avoid penalties for non-compliance
Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013. 

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Adrian Cooney

Reviewed by:

Adrian Cooney

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about Bulgarian employment solutions

What is an Employer of Record in Bulgaria?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Bulgaria. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Bulgaria?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Bulgaria. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Bulgaria?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Bulgaria. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.

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