Key Takeaways for Hiring in Bulgaria
- Probation can run up to six months, and notice is typically 30 days unless both parties agree to a longer period, capped at three months
- Payroll runs monthly, with pay due by the 5th of the following month, and employees earn at least 20 working days of paid annual leave after eight months with the employer
- Employers commonly budget for 18.92% to 19.62% in employer payroll contributions, while employees pay a flat 10% income tax and 13.78% total social contributions
- Bulgaria requires a seniority bonus after one year: employers pay an additional 0.6% of gross monthly salary per year of professional experience, including verified prior related experience
Continent
Europe
Capital
Sofia
Currency
Euro (EUR)
Language
Bulgarian
Payroll Cycle
Monthly
VAT
20%
Quick Facts For Hiring In Bulgaria
Bulgaria Employment Contract Overview
Below is the core structure of our Bulgaria employment contracts to ensure compliance with national labor law and collective agreements.
What Do You Need To Include In A Bulgarian Employment Contract?
Employment contracts are required to include information about the involved parties and must clearly outline:
Employee Information
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The location of the workplace
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The job title and the nature of the duties
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The date the contract is signed and the date when work begins
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The length of the employment agreement
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The amount of standard and extended paid annual leave, including any additional paid leave
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The notice period that both parties must observe when terminating the contract
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The base salary, any additional compensation, and the frequency of payments
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The length of the working day or working week
Payroll
Average employer cost
18.92% – 19.62%
| Category | Details |
|---|---|
| Salaried Employees | Monthly |
| Avg employer tax | Social security and health insurance contributions total approximately 31% of an employee’s gross salary, with the employer’s share ranging between 18.92% and 19.62%. |
Tax Breakdown
VAT
| Category | Rate / Details |
|---|---|
| VAT | Standard rate of 20% |
Mandatory Employee Benefits in Bulgaria
Employment of expats is supported in this country.
| Benefits | Provider | Funded Through | Notes |
|---|---|---|---|
| Health Insurance | Government |
Payroll Contributions |
Bulgaria’s social security system consists of two main pillars: medical insurance and social insurance. The system is administered by the National Health Insurance Fund and the National Social Security Institute, with contributions collected by the National Revenue Agency. |
| Pension/Social Security | Government |
Payroll Contributions |
Bulgaria operates a unified social security framework covering pensions and social insurance. Oversight is shared between the National Social Security Institute and the National Health Insurance Fund, while the National Revenue Agency is responsible for collecting all mandatory contributions. |
| Other Statutory Benefits | Employer |
Additional Cost |
Seniority Bonus (length-of-service supplement): After one year of employment, employees become entitled to additional compensation based on professional experience and length of service. Employers must pay an extra 0.6% of the employee’s gross monthly salary for each year of professional experience. This supplement must be stated in the employment contract and reflected in payroll. Eligibility is not limited to service with the current employer; prior relevant experience with other employers also counts. Employers must verify experience using documentation such as an employment record book or equivalent certificates. Once verified, the supplement is calculated and added to the employee’s gross salary from the start of employment. |
Leave And Holiday Entitlement In Bulgaria
Annual Leave
Employees who have worked for the same employer for at least eight months are entitled to a minimum of 20 working days of paid annual leave.
Under the Labor Code, employees should generally take paid annual leave in the year it is accrued, although up to 50 percent of the entitlement may be deferred to a later time.
If an employee does not use their paid annual leave within two years from the end of the year in which it was earned, they permanently lose the right to take that leave, regardless of the reason for non-use.
Public Holidays
Bulgaria officially recognizes 14 public holidays. These include:
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January 1 – New Year’s Day
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March 3 – Liberation Day
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Good Friday
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Holy Saturday
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Easter Sunday
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Easter Monday
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May 1 – Labor Day and International Workers’ Solidarity Day
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May 6 – St. George’s Day
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May 24 – Day of Bulgarian Education and Culture
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September 6 – Unification Day (Bulgaria and Eastern Rumelia)
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September 22 – Independence Day
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December 24 – Christmas Eve
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December 25 and 26 – Christmas Holidays
Sick Leave
Employees who have made social security contributions for at least six months qualify for up to 18 months of paid sick leave.
For the first three days of absence, the employer pays 70 percent of the employee’s average daily wage. From the fourth day onward, the National Social Security Institute assumes responsibility for payment.
The Institute pays sick benefits equal to 80 percent of the employee’s average daily wage for general illness and 90 percent if the incapacity results from a work-related injury or occupational disease. Employees must submit a valid medical certificate confirming the disability to receive sick pay.
Maternity Leave
Female employees are entitled to 410 days of paid maternity leave per child, with 45 days required to be taken before the expected due date. If the child is born earlier than expected, any unused pre-birth leave automatically carries over to the postnatal period.
During maternity leave, the mother receives benefits from the public social security system equal to 90 percent of her average daily gross wage or the average daily income used for social security contributions.
After maternity leave ends, the mother may take an additional two years of leave, provided the child is not enrolled in a childcare facility.
Paternity Leave
Fathers with at least 12 months of work experience are entitled to 15 days of paid leave after their newborn is discharged from the hospital.
During this period, they receive compensation from public social security funds equal to 90 percent of their average daily gross salary or the income used for social security contributions.
Once the child reaches six months of age, the father may take maternity leave until the full 410-day entitlement expires.
With the mother’s consent, statutory leave available during the child’s first two years may be transferred to the father.
Fathers are also entitled to up to two months of leave to care for a child under eight years old, provided none of the mother’s transferable leave has been assigned to them. If less than two months has been transferred, the father may use the remaining balance of this entitlement.
Other Types of Leave
Adoptive mothers are entitled to maternity leave equal to 410 days minus the child’s age at the time of adoption.
When adopting a child between two and five years old, the adoptive mother may take 365 days of leave, which must be used before the child turns five. After the child reaches six months of age, the adoptive father may use maternity leave until the full 410-day entitlement expires.
Adoptive fathers who adopt children older than two years are entitled to 365 days of leave.
Employees are entitled to two days of paid personal leave for events such as marriage, bereavement, or blood donation. Paid leave is also granted for certain civic duties, including serving as a witness or juror.
Employers may grant unpaid leave at the employee’s request, regardless of whether paid annual leave has been exhausted or whether the employee has met the service requirement for paid leave. Notably, up to 30 days of unpaid annual leave count toward total length of service.
With prior employer approval, employees enrolled in secondary or higher education are entitled to 25 days of paid education leave per academic year. During their graduation year, this entitlement increases to 30 days to allow time for final exams and completion of graduation requirements.
Termination and Offboarding in Bulgaria
Offboarding in Bulgaria follows defined legal standards. Employers and employees must meet notice obligations, follow fair procedures, and ensure all final entitlements are settled correctly.
| Type | Possible? |
|---|---|
| Termination for Cause (poor performance, misconduct, etc.) | Yes |
| Termination without Cause | Yes |
| Mutual Termination Agreement (MTA) | Yes |
| Redundancy | Not possible under the EOR setup |
Employee Termination (Resignation)
Notice
According to the Labor Code, employees can end their employment contract either with or without giving notice. If the employee chooses to resign with notice, they are not required to provide a reason to the employer. However, immediate termination without notice is legally permitted if the employee faces certain situations, such as:
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being unable to carry out their duties due to illness and the employer refusing to offer alternative work,
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delayed wage payments, and
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unauthorized modifications to the employment contract made by the employer.
End-of-Service Benefits
Severance/Gratuity
Generally, employees who resign are not entitled to severance pay.
Other Benefits
Unused Paid Annual Leave
Employer Termination With Cause in Bulgaria
Acceptable grounds
The law outlines specific grounds for disciplinary dismissal, which include:
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Arriving late to work or leaving early on three separate occasions within a month, with each instance lasting at least one hour
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Being absent from work without justification for two consecutive working days
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Repeated breaches of workplace rules
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Misuse of the employer’s trust
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Revealing confidential company information
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For employees in commerce or service roles, causing harm to customers by deceiving them about the price, weight, or quality of goods or services
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Engaging in online gambling using the employer’s telecommunications resources
Notice
An employer can end an employment contract without notice in cases of disciplinary dismissal.
End-of-Service Benefits
Severance
Employees terminated with cause are not entitled to severance pay.
Other Benefits
Unused Paid Annual Leave.
Employer Termination Without Cause in Bulgaria
Acceptable Grounds
Employers may dismiss employees with prior notice for reasons such as:
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Business closure
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Workforce reductions or layoffs
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Decreased workload
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Work stoppage lasting more than 15 working days
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Unsatisfactory job performance
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Not meeting the educational criteria required for the position
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Refusal to work at a different location
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Reinstatement of an employee who was previously unlawfully dismissed from the same role
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Eligibility for retirement
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Situations where the employment began after the employee had already acquired and exercised their retirement rights
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Changes in job requirements that leave the employee unqualified
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Inability to maintain the employment relationship
Notice
Form
Termination of an employment contract must be communicated in writing.
Notice period
Typically, the notice period is 30 days unless both parties agree to a longer duration, which cannot go beyond three months.
End-of-Service Benefits
Severance
Employees terminated without cause are entitled to severance pay based on the reason for termination.
Other Benefits
Unused Paid Annual Leave.
Mutual Termination Agreements in Bulgaria
Under Article 331 of the Labour Code, an employer may initiate termination of the employment contract by offering compensation. This process does not constitute a unilateral dismissal but operates as a voluntary agreement proposed by the employer.
If the employee accepts the offer in writing, the employment relationship ends under the agreed conditions, with compensation of no less than four times the employee’s last gross monthly salary.
Notice
There is no statutory notice period required for this type of termination since both parties agree on the termination terms.
End-of-Service Benefits
Severance
The employer must offer compensation of no less than four times the employee’s last gross monthly salary as severance pay or termination indemnity.
The exact amount and payment terms are subject to agreement but cannot be less than the minimum prescribed.
Other Benefits
Unused paid annual leave.
Offboarding Process for the End of Fixed-term Contracts in Bulgaria
If the Fixed-Term Contract Ends Normally
Notice
The contract automatically terminates at the agreed end date without need for notice.
End-of-Service Benefits
Severance/Gratuity
No severance pay is generally due unless otherwise agreed or stipulated by collective agreements.
Other Benefits
- The employer must pay compensation for any unused paid annual leave accrued during the contract.
- The employee is entitled to all earned wages and benefits up to the contract end date.
If the Employer Terminates Early
Early termination is only allowed for valid reasons specified in the Labour Code or the contract (e.g., serious breach of contract).
Notice
The employer must respect the notice period agreed upon or, if absent, the minimum notice period of 30 calendar days (which can be extended by agreement).
End-of-Service Benefits
Severance/Gratuity
The employee may be entitled to severance pay if termination is without cause (usually equal to 1 month’s gross salary).
Other Benefits
The employer must pay for unused paid annual leave and all earned remuneration up to the termination date.
Final Payment Timing & Immigration and Visa Compliance in Bulgaria
Final Payment Deadline
Upon termination of employment, Bulgarian labor law requires employers to make the final payment including any outstanding wages, unused paid leave, and compensation no later than the next regular payday, unless the employer and employee agree otherwise.
When termination takes effect immediately, such as through mutual agreement or dismissal, employers typically complete final payment within 30 days from the termination date.
Penalty
Employers who miss the final payment deadline may face interest charges on delayed amounts, calculated at statutory interest rates. The General Labour Inspectorate may also impose administrative fines ranging from BGN 1,500 to BGN 15,000, depending on the severity and recurrence of the violation. In addition, employees may bring labor court claims, which can result in further penalties and legal costs for the employer.
Visa and Immigration Compliance
For non-EU, EEA, or Swiss nationals holding a Single Work and Residence Permit or EU Blue Card:
- Employers must notify the Bulgarian Employment Agency and the Migration Directorate within seven days of the termination date. This notification formally invalidates the permit and helps prevent the foreign national from overstaying unlawfully.
- When the work or residence permit is employer-sponsored, as is the case with most Single Permits, the employer’s withdrawal of sponsorship triggers automatic revocation of the permit. In these cases, the employee is typically required to leave Bulgaria within seven to fourteen days unless they secure new employment and successfully reapply.
- Employers who fail to manage immigration obligations correctly at termination may face fines of up to BGN 20,000 per violation. Authorities may also conduct audits or impose sanctions through the Ministry of Interior or the Labour Inspectorate. In serious cases, employers risk being blacklisted from sponsoring foreign workers in the future.
Supporting Guides
Frequently Asked Questions
How does the seniority bonus work?
After one year of employment, you must pay 0.6% of gross monthly salary for each year of the employee’s professional experience. This includes verified prior experience with other employers if the work was similar or related. You verify experience using an employment record book or equivalent certificates, then calculate and add the supplement to gross salary from the start of employment.
What happens to unused leave after two years?
Employees permanently lose the right to unused paid annual leave two years after the end of the year it was earned, regardless of the reason for non-use. Up to 50% of the entitlement may be deferred, but anything not taken within the two-year window is lost.
Mutual termination requires four months’ gross salary minimum?
Yes. Under Article 331 of the Labour Code, if you initiate termination by offering compensation and the employee accepts in writing, you must pay at least four times the employee’s last gross monthly salary. The exact amount is negotiable but cannot fall below this minimum.
Why is notice capped at three months?
The default notice period is 30 days. Both parties can agree to extend it, but the Labour Code caps it at three months maximum. You cannot contractually require longer notice periods.
When does sick pay switch from employer to social security?
You pay 70% of average daily wage for the first three days. From day four onward, the National Social Security Institute pays 80% for general illness or 90% for work-related injury/occupational disease. The employee must have made social security contributions for at least six months to qualify.
What’s the final payment deadline?
No later than the next regular payday unless you and the employee agree otherwise. For immediate terminations (mutual agreement or dismissal), employers typically complete final payment within 30 days. Missing the deadline triggers statutory interest charges and administrative fines from BGN 1,500 to BGN 15,000.
