Hire in Bulgaria

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Last updated at June 14, 2022
beautiful scenery in the country of bulgaria

Currency

Bulgarian Lev (BGN)

Capital

Sofia

Time Zone

GMT+2

Key Country Facts

Introduction

Bulgaria, officially the Republic of Bulgaria, is a country in Southeast Europe. Emerging from centuries of Ottoman rule, Bulgaria gained its independence in the late 19th century and became a member of the North Atlantic Treaty Organization (NATO) in 2004 and of the European Union (EU) in 2007. Under the terms of the 1991 constitution, Bulgaria is a parliamentary republic.

Area

Bulgaria covers a territory of 110,994 km2 and is the sixteenth-largest country in Europe. It lies on the eastern flank of the Balkans, and is bordered by Romania to the north, Serbia and North Macedonia to the west, Greece and Turkey to the south, and the Black Sea to the east.

Climate

Most of Bulgaria has a moderate continental climate, which is tempered by Mediterranean influences in the south. The barrier effect of the mountains and varied topography, and meeting of the Oceanic and Continental air masses, makes the climate diverse and complex in some areas.

Culture

Contemporary Bulgarian culture is a blend of millennium-old folk traditions and a more formal culture that played a vital role in the emergence of national consciousness under Ottoman rule and in the development of a modern state.

Religion

There is no official religion in Bulgaria, and majority (>75%) identify with the Bulgarian Orthodox Church. Sunni Muslims are the second-largest and constitute 10% of the overall religious makeup, although a majority of them are not observant and find the use of Islamic veils in schools unacceptable. 11.8% do not identify with a religion and <3% are of other religions.

Official Language

The official language is Bulgarian, written in the Cyrillic alphabet and spoken by the majority of the population. The two main minority languages spoken are Turkish (8%) and Romani (4.4%), and Russian is the most commonly spoken foreign language (35%).

Bulgaria HR at a Glance

Employment Law

Labour Code amendments adopted during the 1990s introduced new concepts and changed the nature of Bulgarian labour law, reflecting the ongoing transition to a more decentralised social system and market economy rather than being dominated by the central government.

However, there remain certain imperative legal norms that are not subject to negotiation by the parties in either individual or collective labour contracts.

Employment Contract

An employment contract must be in writing in order to be valid. It can be drafted in any language, provided that it contains at least the minimum content details mandated by law. Any alteration to the employment contract must be made in writing; otherwise, an administrative penalty will be imposed.

Employers are obliged to notify the relevant branch of the National Revenue Agency within three days of the conclusion or alteration of any employment contract. The employer must then forward details of the essential elements of the contract to the National Revenue Agency, which controls the collection of social securities and taxes based on the information provided by the employer.

The Bulgarian authorities can request a copy of the Bulgarian translation if required, and in the event of a dispute, the court will require a Bulgarian translation of it.

An employment contract must include details of the:

  • parties to the employment contract

  • location of employment

  • employment position and job description

  • commencement date of work

  • duration of the employment

  • duration of the working day or week

  • basic and additional employment remuneration of a permanent nature

  • terms and conditions concerning the employment remuneration payment

  • basic, extended and additional annual paid leave

  • notice period for employment termination.

Under the Bulgarian Commercial Act, executives should sign management agreements, not employment agreements. The Bulgarian Labour Code does not apply to management agreements and the parties are more flexible in negotiating working time, annual leave, remunerations, termination etc. However, the social security contributions under the management agreements are the same.

Other types of contracts under Bulgarian Labour Code:

Probationary contract

The employer has up to 6 months to offer a prospective employee a permanent labour contract, and a 2nd probationary contract between the same employer and employee for the same job is prohibited.

Work from home contract

The employer has to keep documentation for each employee performing work from home. The employment agreement has to include location of working place, remuneration, channels for assigning/reporting work, methods of supplying materials and tools necessary for employee to perform his/her job, expenses and payment for working place.

The employer has to provide payment and treatment equal to those provided to other employees, including healthy and safe working conditions and the necessary social and health securities as required by legislation.

Agency work contract

This is where an employee is hired by an agency and sent to an employer to execute a specific task or temporarily replace an employee. Agency workers enjoy the same rights and benefits as permanent employees.

Part-time contract

Part-time employees enjoy the same rights and benefits as permanent employees, and must work for a minimum of four hours per day.

Contract Terms

The employee must commence work within seven days after the employer furnishes a signed copy of the contract and a notification form certified by the appropriate regional department of the NRA. Failure of the employee to assume job responsibilities within this period will result in dissolution of the contract.

The performance of the contract begins when the employee begins work, an act that is verified in writing.

If there is a collective labour agreement concluded prior to the individual contract, the individual clauses of the latter should be more favourable to the employee than those in the collective agreement, otherwise the individual clauses shall be considered void.

Pre-Employment Checks

Background checks can be made and are generally conducted by requiring the applicant to produce a number of documents. These have to be presented to the employer before entering into an employment contract, including:

  • medical certificate evidencing the applicant’s general health status

  • document evidencing a specific professional qualification or capacity

  • limited personal data, needed for the identification of the employee only

  • a criminal record certificate for specific jobs, which would be explicitly stated in the legislation.

The employer is responsible for organising the mandatory preliminary health check, at its expense, for all employees before commencing the employment relationship.

Probation Period / Trial Period

The probation may not exceed six months.

The contract must indicate in whose favour the probation is agreed. If the employment contract does not contain this agreement, it is assumed that the time period is in favour of both parties. During the probation period, the party in whose favour the probation is agreed may terminate the contract without notice.

Working Hours

The legal work week for full-time employees cannot exceed 40 hours per week which amounts to eight hours per day in a five-day working week.

In the case of a six-day working week, the duration of the working day before the weekend cannot exceed five hours.

For minors, working time is limited to 35 hours per week and seven hours per day.

Overtime

Overtime work is strictly regulated in Bulgaria and is prohibited in ordinary circumstances. However, there are exceptions in cases of national defence activities, in emergency situations (e.g. urgent infrastructure work) and for operational extensions.

Extended working time can be permitted of up to 48 hours per week, but this cannot exceed in total over 60 working days annually (20 of which must not be consecutive).

Overtime cannot exceed:

  • 150 hours annually

  • 30 hours monthly (or 20-night hours)

  • 6 hours daily (or 4-night hours)

Overtime rate is paid the following premium to wages:

  • 150% on working days

  • 175% on holidays

  • 200% on public holidays

Bonus

Bonuses can be paid to employees in Bulgaria, usually as a 13th-month payment. It’s viewed as a gratuity and isn’t mandated by labour laws.

Termination

Termination of employment is heavily regulated by the Labour Code and can be based on:

i. mutual agreement

ii. some objective reasons such as fulfilment of work or lapse of time (for temporary contracts)

iii. unilaterally by each one of the parties in the cases explicitly provided in the Labour Code.

The grounds for unilateral termination determine whether a prior notice to the other party is required or not. Termination without notice can be due to refusal of employee to take prescribed medical examination, breach of contract, retraction of academic rank/ degree. The dismissal must be issued by the employer in writing, and must be effected within two months of the discovery.

An employment contract may be terminated by the employer with notice only on grounds specifically provided for by the law, including closure of the company, reduction of volume of work, lack of efficiency in employee’s work performance, requirements of job have changed. The notice of employment termination must be given in writing with 30 days notice unless otherwise agreed.

An employment contract may be terminated by the employee without notice for the below reasons:

  • inability to perform the work due to illness and refusal of the employer to offer a suitable job

  • delay of payment of remuneration

  • illegal alteration of the employment contract by the employer

  • working conditions deteriorate substantially

After termination, the employee receives all the necessary documents, including their labour book and their certificates for income tax and social security payments.

The National Revenue Agency must be notified of the termination within seven days of its coming into effect, by way of a standard form that specifies the details of the termination.

These groups of employees are protected and may be terminated only with prior approval from the Labour Inspectorate.

  • mothers of children under the age of 3

  • spouses of military servicemen

  • an employee in occupational rehabilitation

  • certain sick employees

  • employees on leave

  • employees who are elected as an employees’ representative

  • pregnant women who have committed a disciplinary offence

Post termination non-compete clauses in employment contracts are not valid and non-enforceable, even if an employee has explicitly consented in advance and been compensated for the obligation.

Any compensation paid, should accordingly be returned by the employee as ‘paid without cause’.

Notice Period

The employee may terminate the employment contract by a giving the employer notice in writing. The notice period is different for a fixed-term employment contract and for an indefinite period employment contract.

For indefinite period employment contracts, notice period is 30 days but can be up to a maximum period of 3 months as stipulated in the employment contract.

For fixed-term contracts, the notice period is three months, but no longer than the remaining period of the contract.

The employee may terminate the employment contract without notice if the employer breaches its legal or contractual obligations. The termination must be in writing and contain the reason for the termination.

Employer must provide employee with a month written notice regarding the termination. Notice period can be up to 3 months if stated in contractual agreement.

Redundancy / Severance Pay

In all cases of dismissal, an employer must pay an employee all payments due under the employment agreement (e.g. salary and compensation for annual vacation accumulated but not used during the term of employment).

For termination on specific grounds (e.g. redundancy, economic conditions), the statutory requirement is one month’s salary.

For termination due to illness for employees of at least 5 years’ service, or at retirement age, the severance is 2 month’s salary.

Any annual leave remuneration due to but not yet drawn by an employee must be paid to the employee, upon the termination of the employment contract for any reason, at the wage rate prevailing on the date of termination.

Fixed Term Contracts

Fixed-term contracts are permissible for the below scenarios:

  • for a specific period that may not exceed three years (e.g. seasonal/short-term activities)

  • for activities that are not seasonal or short term, the employment contract may be concluded for at least one year

  • contracts regarding the attainment/upgrading of qualification or retraining

The duration of these contracts may range from one day to several years. Termination of the fixed-term contract occurs upon expiration of the term stated in the contract.

A fixed-term contract with a single employee for a single position may be renewed only once, and the duration of the renewed contract must be at least one year.

If an employee continues to work for the employer for five or more days after the expiration of the fixed-term contract without written objection by the employer, the fixed-term becomes an indefinite contract.

Employees under fixed-term employment contracts enjoy the same rights and benefits as permanent employees. It is therefore neither easier nor cheaper to terminate a fixed-term employment contract than an indefinite employment contract before the expiry of its term (although employers do benefit from the special ground for termination of a fixed-term employment contract once its term has expired).

Tax and Social Security

Personal Income Tax

Individuals are taxed based on their tax residency status. Bulgarian tax residents are taxed on worldwide income.

A flat rate of 10% applies to all personal income.

Bulgaria has entered into more than 70 income tax treaties, including an income tax treaty with the United States.

SOCIAL SECURITY

Social insurance is administered by the National Social Security Institute (NSSI) in Bulgaria. The social insurance system covers pensions, sickness, disability, maternity, funeral benefits, unemployment and a childcare benefit.

Employers are also required to contribute to public health insurance, which is managed by the National Health Insurance Fund (NHIF). Social security contributions and health insurance contributions are collected by the National Revenue Agency (NRA).

Social Security Employer Contribution (%) Employee Contribution (%)
Health insurance 4.80 3.20
Pension 8.22 6.58
Unemployment insurance 0.60 0.40
Illness and maternity 2.10 1.40
Supplementary pension 2.80 2.20
Occupational/accident insurance 0.40 – 1.10
TOTAL 18.92 – 19.62 13.78

*The above table serves as a broad guideline. Actual rates charged will differ.

Employees

Salary Payment

The payroll cycle is generally monthly, with payment made on the last working day.

Payslip

It is legally acceptable to provide employees with online payslips in Bulgaria, but employees have to confirm receipt of the payslip.

Usually, payslips are provided on paper and the employee would sign the payslip.

Timesheets & Record Keeping

The employment record book is an official document and holds a certification function. It must be issued by the employer at the start of employment. The registrations into the employment record book may be done by specific persons (the employer, accountants), or by the employment office in case of termination of the contract.

All payroll-related documents should be stored for 50 years. If the company goes into liquidation, the payroll reports must be archived with the National Social Security Institute.

Annual Leave

All employees are entitled to a minimum of paid annual leave of 20 working days, and an employee who has at least 8 months’ of service acquires the right to full entitlement of annual leave. Paid annual leave can be longer, but never shorter.

Employees who work in unhealthy or other special conditions are entitled to additional annual paid leave of at least 5 working days per year.

In case of employee termination, unused paid leave days are subject to compensation.

Annual paid leave days should be used within the calendar year they are earned in. In some cases, unused paid leave days can be transferred to the next calendar year, but they should be used by the middle of the following year.

Sick Leave

The employer must cover 70% of the employee’s wages for the first 3 days of the sick leave, after receipt of a medical certificate. The National Social Security Institute must cover the rest of the sick leave, after the employee provides necessary documentations.

From the fourth day onwards, the state will pay sickness benefits in the amount of 80% for ordinary cases, or 90% if the illness or injury has been caused by the occupation.

To receive these benefits, an employee must have worked there for a minimum of six months.

Maternity & Parental Leave

Maternity Leave

Pregnant women in Bulgaria are entitled to 45 days of paid leave before their child’s due date and up to 410 days after this. In instances when the baby is born within the 45 days, the remaining days can be carried over and used after the birth.

Maternity leave pay is paid for by the state as long as the employee has been working for at least one year, and social security contributions have been made. Pay is in the amount of 90% of the average salary earned during the preceding 24 months.

Paternity Leave

The father is entitled to 15 days of paid paternity leave after the birth of a child. Once the child has reached at least six months, the father can use any unused maternity leave with the mother’s consent.

Childcare Leave

After use of the pregnancy and child-birth leave, if the child has not been placed in a childcare establishment, the female employee has the right of additional childcare leave until the child reaches two years’ old. With the consent of the mother, this leave may be granted to the father or to one of their parents where they work under an employment relationship.

Caregiver Leave

If an employee has a disabled or sick child, or another disabled or ill family member, the employee is entitled to sick leave as if it were their own disability or illness.

The time of use of such leave shall be assimilated to the length of employment service.

Compassionate / Bereavement Leave

An allowance of two days when/if an employee gets married, and two days for anyone who donates blood; the day of donation and the following day.

Employees are granted paid leave of two days in the event of the death of a first level relative: father, mother, spouse, child, sister, or brother with full pay.

Public Holidays

There are 12 paid public holidays in Bulgaria.

Benefits to the Employee in Bulgaria

Statutory Benefits

The National Social Security Institute (NSSI) is the public institution that manages the state social security in Republic of Bulgaria.

Persons subject to state social insurance are insured in:

General (Non-occupational) Disease and Maternity fund for common diseases and maternity, including insurance for temporary incapacity for work

Pensions fund for disability due to general (non-occupational) disease, old age and death

Labour Accidents and Occupational Diseases which covers disability, death, temporary incapacity for work and temporary reduced working capacity due to labour accident or occupational disease

Unemployment fund – eligible if working and making social insurance contributions for at least 9 out of the last 15 months. The daily unemployment benefit is 60% of the applicant’s average daily wage during the last 9 month period for which social insurance contributions were made. The duration that the benefit is paid depends on the duration social insurance payments have been made, as follows:

  • Up to 3 years – 4 months

  • From 3-5 years – 6 months

  • From 5-10 years – 8 months

  • From 10-15 years – 9 months

  • From 15-20 years – 10 months

  • From 20-25 years – 11 months

  • From 25-30 years – 12 months

Visas and Foreign Workers

General Information

EU nationals, Schengen members, citizens of European Economic Area (EEA) member states and Swiss citizens may enter Bulgaria with a valid ID or passport and reside freely within the country for up to 3 months.

All other individuals must obtain a work permit from the Employment Agency through the intended employer. The work permit is valid for 1 year and can be extended for 2 consecutive years.

EU, EEA or Swiss individuals may be issued temporary residence certificates for a term of up to 5 years. After these 5 years, they can apply for a permanent residence certificate if they have resided legally in Bulgaria for more than 5 years.

Non-EU individuals who have entered Bulgaria with a Type D visa may be issued a residence permit valid for up to 1 year.

Getting a Tax Number

The Unified Civil Number and the Personal Number of a Foreigner are assigned by the Ministry of Interior and could be found in all identity documents. The Official number from the NRA is assigned by the National Revenue Agency and could be found in official certificates issued by the Agency.

In case of individuals the following TINs are used:

  • For foreign citizens who receive permission for long-term or permanent residence in Bulgaria – Personal Number of a Foreigner which consists of a block of 10 digits;

  • For other foreign citizens who are residents for tax purposes in Bulgaria; – Official number from the National Revenue Agency (NRA) which consists of a block of 10 digits

Public Holidays in 2022

S.No Occasion Date
1 New Year’s Day January 1st
2 Liberation Day March 3rd
3 Good Friday April 22nd
4 Easter Monday April 25th
5 Labour Day May 1st
6 St. George’s Day May 6th
7 Culture and Literacy Day May 24th
8 Unification Day September 6th
9 Independence Day September 22nd
10 Christmas Eve December 24th
11 Christmas Day December 25th
12\ Second Day of Christmas December 26th

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