Bulgaria EOR Services

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Employing in Bulgaria Salaries in Bulgaria Costs Statutory Benefits Public Holidays

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. (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.

Thinking about expanding into Bulgaria?

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Working in Bulgaria Salaries in Bulgaria Costs Statutory Benefits Public Holidays

Working in Bulgaria

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.

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%.

Statutory benefits

Sickness

Cash benefits, otherwise known as sick pay, compensate for lost income from the employee’s salary when they have to take absence due to temporary incapacity to work. To be entitled to this benefit, the employee must be insured for general illness and maternity for at least six months.

To claim sickness benefit, the employee should have a sick leave note issued by a general practitioner or a medical consultation committee.

The first three days of the sick pay are covered by the employer for up to 70% of the employee’s daily gross remuneration or the gross daily insurable income on which social security contributions have been paid for the last 18 months before the incapacity to work occurs.

For the following days, the daily general sickness benefits in cash for temporary inability to work amount to 80%, or 90% of the employee’s average daily gross labour remuneration or average daily insurable income for temporary incapacity to work due to an accident at work or an occupational disease.

Sick leave benefits are payable by bank transfer only. In accordance with European legislation, the amount may not be
reduced due to administrative or bank fees. The first three days are paid by the employer and the rest by the National Social Security Institute.

Contractual provisions

Contracts 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

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.

Termination

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.

Statutory insurances

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

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 Year’s Day
3 March	Bulgaria Liberation Day
Varies	Orthodox Good Friday
Varies	Easter Day
Varies	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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Published date: 19 February 2021

Review date: 19 February 2022