Employing in Bulgaria

An employer of record, sometimes known as an international PEO can help you quickly hire and onboard workers in Bulgaria – often with just two weeks’ notice. Establishing your own local entity without risk and saving costs, this type of service makes an EOR in Bulgaria worth checking out!

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. (And you’ll be spoilt for choice if you’re looking for a highly qualified, yet cheap, workforce in these areas.) 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 for foreign expertise, providing international companies with an excellent opportunity for expansion.


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.

Public Holidays

1 January
New Years Day
3 March
Bulgaria Liberation Day
Orthodox Good Friday
Easter Day
Easter Monday
1 May
International Worker’s Day
6 May
Saint George’s Day
24 May
Bulgarian Education and Culture/Slavonic Literature Day
6 September
Unification Day
22 September
Independence Day
1 November
National Awakening Day
24 December
Christmas Eve
25 December
Christmas Day
26 December
Second Day of Christmas

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At TopSource Worldwide, we work with local experts to help you navigate the various admin and cost obstacles you may come across along your expansion journey

To find out how we can help your business with our employment solutions, contact us today.