Hire in Bulgaria
Here’s where you get started with human resources best practices and hiring in Bulgaria.
Bulgarian Lev (BGN)
Key Country Facts
Bulgaria, officially the Republic of Bulgaria, is a country in Southeast Europe. Following centuries of Ottoman rule, Bulgaria gained its independence in the late 19th century. The country became a member of the North Atlantic Treaty Organization (NATO) in 2004 and joined the European Union (EU) in 2007. Bulgaria is a parliamentary republic, as established by the terms of the 1991 constitution,
Bulgaria covers a territory of 110,994 square kilometers and is the 16th largest country in Europe. Situated on the eastern flank of the Balkans, it is bordered by Romania to the north, Serbia and North Macedonia to the west and Greece and Turkey to the south. Bulgaria borders the Black Sea to the east.
Most of Bulgaria has a moderate continental climate, tempered by Mediterranean influences in the south. The barrier effect of the mountains and varied topography, along with the convergence of oceanic and continental air masses, make the climate diverse and complex in some areas.
Modern Bulgarian culture blends millennium-old folk traditions with a more formal culture that played a vital role in the emergence of national consciousness under Ottoman rule. This culture has supported the development of Bulgaria as a modernized state rooted in tradition..
There is no official religion in Bulgaria. The majority (greater than 75%) of people identify with the Bulgarian Orthodox Church. Sunni Muslims are the second largest religious group and constitute 10% of the country’s overall religious demography. However, a majority of Sunni Muslims are not observant and find the use of Islamic veils in schools unacceptable. Furthermore, 11.8% of the population does not identify with a religion and less than 3% are of other religions.
The official language is Bulgarian, which is 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%). Russian is the most commonly spoken foreign language in Bulgaria (35%).
Bulgaria HR at a Glance
Labor Code amendments adopted during the 1990s implemented new concepts and shifted the nature of Bulgarian labor law. This transformation reflects the ongoing transition to a more decentralised social system and market economy, as opposed to being dominated by a centralized government.
However, there remain certain imperative legal norms not subject to negotiation in individual nor collective labor contracts.
An employment contract in Bulgaria must be furnished in writing in order to be valid. It can be drafted in any language, provided it contains at least the minimum details required by law. Any modification to the employment contract must also be made in writing. If this does not happen, an administrative penalty will be imposed.
Employers must notify the relevant branch of the National Revenue Agency within three days of the termination or alteration of any employment contract. The employer is required to then forward details of the essential elements of the contract to the National Revenue Agency. This authority handles the collection of social securities and taxes based on the information provided by the employer.
The authorities in Bulgaria may request a copy of the Bulgarian translation, if required. In the event of a dispute, the court will also require a Bulgarian translation of the document.
An employment contract in Bulgaria must include the following details:
- parties to the employment contract
- location of employment
- employment position and job description
- commencement date of work
- duration of employment
- duration of the work 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 periods for employment termination
Executives should sign management agreements rather than employment agreements, as determined by the Bulgarian Commercial Act. Notably, the Bulgarian Labor Code does not apply to management agreements. Parties are instead able to be more flexible in negotiating working time, annual leave, remunerations, termination, etc. However, the social security contribution requirements under a management agreement remain the same.
Other types of contracts under Bulgarian Labour Code:
The employer has up to six months to offer a prospective employee a permanent labor contract. A second probationary contract between the same employer and employee for the same job is not allowed.
Work from home contract
The employer is required to maintain documentation for each employee performing work from home. The employment agreement must include the employee’s working location, remuneration, channels for assigning and reporting work, methods of supplying materials and the tools necessary for the employee to perform his or her job. It should also outline all expenses and any payments being offered for the workplace.
The employer must provide payment and treatment equal to those provided to other employees. This includes healthy and safe working conditions as well as all the necessary social and health securities covered by legislation.
Agency work contract
When a worker is hired by an agency and sent to an employer to execute a specific task or temporarily replace an employee, he or she enjoys the same rights and benefits as a permanent employee.
Part-time employees in Bulgaria enjoy the same rights and benefits as permanent employees. They must work for a minimum of four hours per day.
The employee must begin work within seven days after the employer produces a signed copy of the contract and a notification form certified by the appropriate regional department of the NRA. If the employee fails to assume job responsibilities within this period, it will result in dissolution of the contract.
The performance of the contract begins when the employee begins work. This must be verified in writing.
If there is a collective labor agreement concluded prior to the signing of the individual contract, the individual clauses of the latter should be more favorable to the employee than those outlined in the collective agreement. Otherwise, the individual clauses will be deemed void.
Background checks can be conducted by employers and are generally completed by requiring the applicant to produce a series of documents. The following must be presented to the employer before entering into an employment contract:
- medical certificate confirming the applicant’s general health status
- document verifying a specific professional qualification or capacity
- limited personal data (needed for the identification of the employee only)
- a criminal record certificate for specific jobs (this requirement should be explicitly stated in the legislation)
The employer is responsible for organizing the mandatory preliminary health check for all employees before starting the employment relationship. This process is paid at the expense of the employer.
Probation Period / Trial Period
The probation period may not last for more than six months.
The contract must specify in whose favor the probation is agreed. If the employment contract does not contain this agreement, it is assumed the time period is in favor of both parties. During the probation period, the party in whose favor the probation has been agreed may terminate the contract without providing notice.
The legal work week for full-time employees must not exceed 40 hours per week. This amounts to eight hours per day in a five-day working week.
In the case of a six-day working week, the length of the working day prior to the weekend must not exceed five hours.
Working time is limited to 35 hours per week for minors in Bulgaria. This amounts to seven hours per day.
Overtime work is strictly regulated in Bulgaria. While prohibited in ordinary circumstances, there are exceptions in cases of national defense activities, emergency situations (e.g. urgent infrastructure work) and operational extensions.
Extended working time is permitted of up to 48 hours per week. However, this must not exceed 60 working days annually, 20 of which must not be performed consecutively.
Overtime cannot exceed:
- 150 hours annually
- 30 hours monthly (or 20 night hours)
- Six hours daily (or four night hours)
Overtime rate is paid at the following premium as compared to wages:
- 150% on working days
- 175% on holidays
- 200% on public holidays
Bonuses can be paid to employees in Bulgaria, usually designated as a 13th month payment. It’s regarded as a gratuity and is therefore not mandated or regulated by labor laws.
The termination of employment in Bulgaria is strictly regulated by the Labor Code and can be based on:
- mutual agreement
- limited objective reasons, such as fulfilment of work or lapse of time (for temporary contracts)
- unilaterally by each one of the parties in the cases explicitly prescribed in the Labor Code.
The grounds for unilateral termination will determine if a prior notice to the other party is required. Termination without notice can be due to refusal of an employee to undergo prescribed medical examination, breach of contract or retraction of academic rank or degree. The dismissal must be issued in writing by the employer, executed within two months of the discovery.
An employment contract in Bulgaria may be terminated by the employer with notice only on the grounds specifically prescribed by the law These include company closure, reduction of work volume, inefficient employee work performance and change of job requirements. The notice of employment termination must be provided in writing with 30 days notice, unless agreed otherwise.
An employment contract may be terminated without notice by the employee for the following reasons:
- inability to perform the work due to illness and refusal of the employer to offer an alternative suitable job
- delay of remuneration payment
- illegal modification of the employment contract by the employer
- substantial deterioration of working conditions
Following termination, the employee receives all the necessary documents. These include their labor book as well as their certificates for income tax and social security payments.
The National Revenue Agency must be notified of the termination within seven days. This notification is done by way of a standard form, which specifies the details of the termination.
The following groups of employees are protected and may be terminated only with prior approval from the labor 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 offense
Post termination non-compete clauses in employment contracts are not valid and non-enforceable in Bulgaria, even if the employee has explicitly consented to the non-compete clause in advance and is compensated for the obligation. Therefore, any compensation paid should be returned by the employee as ‘paid without cause.’
The employee may terminate the employment contract by providing the employer the appropriate notice in writing. The required notice periods for fixed-term employment contracts and indefinite period employment contracts are different.
For indefinite period employment contracts, the notice period is 30 days. This can be up to a maximum period of three months, as stipulated in the employment contract.
For fixed-term contracts, the statutory notice period is three months. The notice period can be for no longer than the remaining period of the contract.
The employee can terminate the employment contract without notice if the employer breaches its legal or contractual obligations. In this case, the termination must be in writing and include the reason for the termination.
An employer must provide an employee with a month’s written notice outlining the termination. The notice period can be up to three months, so long as this is specified in the contract.
Redundancy / Severance Pay
In all cases of dismissal, an employer must compensate an employee for all payments due under the employment agreement. This includes salary payments as well compensation for annual vacation accumulated but not used during the time of employment.
The statutory requirement is one month’s salary for termination on specific grounds, such as. redundancy or economic conditions.
The severance is two month’s salary for a termination due to illness for employees of at least five years of service or at retirement age.
Any annual leave remuneration due to an employee but not yet drawn must be paid to the employee upon the termination of the employment contract for any reason This is compensated at the wage rate prevailing on the termination date.
Fixed Term Contracts
Fixed-term contracts are permissible for the following circumstances:
- for a specific period that may not exceed three years (e.g. seasonal or short-term projects)
- for activities that are not seasonal or short term, the employment contract may be concluded for at least one year
- contracts regarding the attainment or enhancement of qualifications (retraining)
The duration of fixed-term contracts may range from one day up to several years. Termination of the fixed-term contract occurs upon expiration of the term specified in the contract.
A fixed-term contract made with a single employee for a single position can be renewed only one time. The renewed contract must be for a duration of at least one year.
A fixed-term becomes an indefinite contract if an employee continues to work for the employer for five or more days after the completion of the fixed-term contract without written objection by the employer.
Employees working 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 expiration of its term. However, employers do benefit from the special ground for termination of a fixed-term employment contract once the term has expired.
Tax and Social Security
Personal Income Tax
Individuals in Bulgaria 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 established more than 70 income tax treaties, including an income tax treaty with the United States.
Social insurance in Bulgaria is administered by the National Social Security Institute (NSSI). The social insurance system covers pensions, sickness benefits, disability benefits, maternity leave, funeral benefits, unemployment insurance and childcare benefits.
Employers must also 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 (%)|
|Illness and maternity||2.10||1.40|
|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 by GoGlobal will differ.
The payroll cycle in Bulgaria is generally monthly, with payment disbursed on the last working day of the month.
It is legally acceptable to provide employees with digital payslips in Bulgaria. However, employees must confirm receipt of the payslip. Typically, payslips are provided on paper and the employee signs the payslip upon receipt.
Timesheets & Record Keeping
The employment record book is an official document and maintains a certification function. The employer must issue this at the commencement of employment. The registrations into the employment record book may be performed by specific persons (the employer or accountants) or by the employment office in cases where the contract has been terminated.
All documents related to payroll should be stored for 50 years. If a company goes into liquidation, all payroll reports must be archived with the National Social Security Institute.
All employees are entitled to a minimum of paid annual leave of 20 working days. An employee who has at least 8 months of service obtains the right to full entitlement of annual leave. Paid annual leave can be extended but it can never be made shorter.
Employees who work in unhealthy or other special conditions are entitled to additional annual paid leave of at least five working days per year.
In the case of employee termination, any unused paid leave days are subject to compensation.
Annual paid leave days should be taken within the calendar year they are earned in. In some cases, unused paid leave days can be transferred to the next calendar year. However, they should be used by the middle of the following year.
The employer is responsible for 70% of the employee’s wages for the first three days of sick leave, upon receipt of a medical certificate. The National Social Security Institute must cover the rest of the sick leave, once the employee provides necessary documentation.
From the fourth day onwards, the government will pay sickness benefits in the amount of 80% for ordinary cases This amount is enhanced to 90% if the illness or injury has been caused by the employee’s occupation.
An employee must work at a company for a minimum of six months in order to receive these benefits.
Maternity & Parental Leave
Pregnant employees in Bulgaria are entitled to take 45 days of paid leave before their child’s due date and up to 410 days after. In cases where 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 government as long as the employee has been working for at least one year. They must also have made social security contributions. Pay is calculated at 90% of the average salary earned during the preceding 24 months.
A father is entitled to 15 days of paid paternity leave following the birth of a child. Once the child has reached at least six months of age, the father can use any unused maternity leave. This is only done with the mother’s consent.
After use of the pregnancy and child-birth leave, the female employee has the right to additional childcare leave until the child reaches two years of age if the child has not been placed in a childcare establishment. With consent of the mother, this leave can be granted to the father or to one of their parents.
If an employee has a child or family member that is sick or disabled, he or she is entitled to sick leave as if it were their own disability or illness.
The time of use for such leave is correlated to the length of employment service.
Compassionate / Bereavement Leave
Employees are granted paid leave of two days in the event of the death of a first-level relative, which includes father, mother, spouse, child or sibling.
An allowance of two days is offered when an employee gets married. Two days of leave are offered for anyone who donates blood, occurring on the day of donation as well as the following day.
There are 12 paid public holidays in Bulgaria.
Benefits to the Employee in Bulgaria
The National Social Security Institute (NSSI) is the public authority that manages the state social security in 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 disabilities due to general (non-occupational) disease, old age and death
Labor Accidents and Occupational Diseases, which covers disability, death, temporary incapacity for work and temporarily reduced working capacity due to a labor accident or an occupational disease.
Unemployment fund covers employees who have worked and made social insurance contributions for at least nine out of the most recent 15 months. The daily unemployment benefit is 60% of the applicant’s average daily wage during the last nine month period for which social insurance contributions were made. The duration for which the benefit is paid depends on the duration the social insurance payments have been made. The scheme is 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
EU nationals, Schengen members, citizens of European Economic Area (EEA) member states and Swiss citizens may enter Bulgaria with a valid identification card or passport. They can reside freely within the country for up to three months.
All other individuals must obtain a work permit from the Employment Agency through the prospective employer. The work permit is valid for one year and can be extended for two consecutive years.
EU, EEA or Swiss individuals may be issued temporary residence certificates for a term of up to dive years. After the five years, they can apply for a permanent residence certificate if they have lived legally in Bulgaria for more than five years.
Non-EU individuals who have entered Bulgaria with a Type D visa may be issued a residence permit valid for up to one year.
Getting a Tax Number
The Unified Civil Number and the Personal Number of a Foreigner are assigned by the Ministry of Interior and can be found in all documents related to an individual’s identity. The Official number from the NRA is assigned by the National Revenue Agency and can be found in official certificates issued by the Agency.
TINs are used as following:
- For foreign citizens who receive permission for long-term or permanent residence in Bulgaria, they will receive a 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, they will receive an Official number from the National Revenue Agency (NRA), which consists of a block of 10 digits.
Public Holidays in 2022
|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|