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Bulgarian Lev (BGN)
Estimated at 22% of employee’s salary
Spanish is the official language of Bulgarian
The population of Bulgaria is 7 million
Employees in Bulgaria are paid monthly
To start growing your team in Bulgaria, you must establish a local entity – including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months.
Emerald can hire and payroll your workers quickly and compliantly with their ‘ready to go’ entity. Make growing your team simple with Emerald as a global partner.
Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.
The country boasts a well-educated and highly skilled workforce, particularly in IT, engineering, and finance, and many Bulgarians are multilingual, facilitating communication with international partners. Labor costs are relatively low, and Bulgaria offers a favourable tax environment with a flat corporate tax rate of 10%. Additionally, as a member of the European Union, Bulgaria adheres to EU regulations and standards, providing stability and predictability in business operations. However, businesses may face bureaucratic hurdles and administrative inefficiencies, and navigating local labour laws and regulations can be complex. While major cities have well-developed infrastructure, rural areas may lack necessary facilities and connectivity. Bulgaria’s small economy can be influenced by external factors, impacting business stability. Lastly, foreign businesses may need to adapt to cultural differences and local business practices, which can require time and effort to understand fully.
Hiring remotely in Bulgaria offers several advantages for employers. The country has a well-educated workforce, particularly strong in fields like IT, engineering, and finance, providing access to highly skilled professionals. Bulgaria’s cost of living is lower than in many Western European countries, which translates to competitive salary expectations and reduced operational costs for businesses. Many Bulgarians are fluent in English and other European languages, making communication smooth for international companies. Additionally, Bulgaria’s time zone (UTC+2) allows for easy collaboration with teams across Europe, and the country boasts a robust digital infrastructure that supports efficient remote work.
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| Pension Fund: | 14.8% |
| General Illness and Maternity Fund: | 2.1% |
| Unemployment Fund: | 0.4% |
| Accident at Work and Occupational Illness Fund: | 0.4% (average rate, can vary between 0.4% and 1.1% depending on the risk category) |
| Guaranteed Claims Fund: | 0.5% |
| Health Insurance Fund: | 4.8% |
Contracts in Bulgaria must include:
Written contracts of employment are not required for permanent, full-time employees. However, they are recommended. Employees on fixed term contracts, part time, or casual employment will require a written contract. It is advised to include the following:
The specified probation period in Bulgaria is 6 months.
Emerald Technology can onboard employees in Bulgaria within 48 hours.
In Bulgaria, restrictive covenants are enforceable under certain conditions. These clauses typically include non-compete, non-solicitation, and confidentiality agreements aimed at protecting employers’ business interests. To be enforceable, restrictive covenants must be reasonable in terms of duration, geographic scope, and the nature of the restricted activities. Courts in Bulgaria generally uphold these clauses if they are necessary to protect legitimate business interests and if adequate consideration is provided to the employee.
The aggregate rate of health insurance cover is 8%, 4.8% of which is covered by the employer. This applies to both Bulgarian nationals and those who have a permanent residency in Bulgaria.
In Bulgaria the National Social Security Institute (NSSI) provides compensation and pensions for situations such as temporary incapacity to work, maternity and retirement. The employer should contribute around 14% of the employee salary to social security.
Mothers are granted 410 days of maternity leave, 45 of which should be taken before the birth.
Fathers can be permitted up to 15 days leave post-birth.
After use of the pregnancy, childbirth or adoption leave, if the child has not been placed in a child-care establishment, the female employee is entitled to an additional child-care leave until the child’s attainment of the age of 2 years. With the mother’s consent (female adopter), the leave is granted to the father (male adopter), who works in an employment relationship. The leave is paid at an amount fixed by the Public Social Insurance Budget Act (currently BGN 780, around EUR 398). Such benefit is also paid to the adoptive mother if the child has not reached the age of 2 years. The leave is covered by the National Social Security Institute.
Sick Leave: Employers cover the first three days of sick pay at 70% of the average daily gross remuneration for the month the sickness occurred. After the first three days, the leave is paid by the National Social Security Institute at 80% for common diseases (and 90% for employment injury and occupational disease) of the average daily gross labour remuneration or the average daily income declared for social insurance.
As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:
When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:
| Notice Periods | For an employment contract of indefinite duration – 30 days, unless the parties have agreed on a longer period, but not longer than 3 months. For a fixed-term employment contract – 3 months, but not more than the remainder of the contract term. |
If an employee is made redundant, they are entitled to a payment based on years of continuous service.
| Severance and Compensation | Employees in Bulgaria are entitled to several forms of compensation upon termination of employment. Firstly, they receive compensation for unused annual paid leave, calculated based on the average daily gross salary, irrespective of the reason for termination. Secondly, if termination results from company closure, downsizing, or other specified reasons, employees are entitled to compensation equivalent to their gross salary for a period of unemployment, capped at one month. Lastly, employees under indefinite contracts receive compensation equal to their gross salary for the notice period, while those under fixed-term contracts are entitled to actual damages as stipulated. These provisions ensure financial protection for employees facing various termination scenarios in Bulgaria. |
All employees are entitled to a minimum of 20 days annual leave.
The minimum monthly salary is BGN 933.
The average working week is 40 hours. In certain cases, employers may require employees to work extended hours on certain days. In such cases, the working hours cannot exceed 10 hours per day and 48 hours in a five-day working week. Employees with reduced working hours can only work for one extra hour a day or 40 hours a week in total. The employer must compensate for the extension of the working time by a respective reduction of working hours within four months.
Employees are paid monthly, usually on the last day of the month, and no later than the 10th of the following month.
In Bulgaria, there is no statutory requirement for a 13th or 14th month salary payment. These additional salary payments are not mandated by law and are typically offered at the discretion of the employer or may be stipulated in individual employment contracts or collective agreements. Therefore, whether an employee receives a 13th or 14th month salary depends on the specific arrangements made between the employer and the employee, rather than being a standard requirement under Bulgarian labour regulations.
Income tax in Bulgaria is consistently 10%, regardless of income.
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