What do you need to know to hire in Bulgaria?
Bulgaria runs a flat 10% income tax on all employment earnings, a minimum wage of €620.20/month, and 20 days statutory annual leave. Redundancy severance applies from day one of service. Each guide below takes one layer.
· Bulgaria guide
How does Teamed handle Bulgarian hiring for you?
Teamed becomes your legal employer of record in Bulgaria for from $599 per employee per month, with zero FX mark-up in any currency.
Payroll, contracts, and the full Bulgarian employment law stack run on one platform.
Real HR and legal experts manage every Bulgarian hire, from the first offer letter to the final settlement. An actual person, not a chatbot or a pooled queue, handles your Bulgarian team alongside EOR, contractor onboarding, and entity payroll on one platform. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice.
A Bulgarian contractor who converts to employment keeps their record, and that same employee can graduate from EOR to your own Bulgarian entity without re-onboarding. Run the Crossover Calculator to see the month the model flips. EOR is the right model for a first Bulgarian hire, until it isn't.
- Bulgaria has a flat 10% income tax with no personal allowance. Every lev of employment income is taxed at the same rate. That simplifies payroll modelling significantly. Most competitor guides bury this or treat it as a footnote. The tax and payroll guide covers how it works alongside social insurance contributions.
- Redundancy severance applies from day one of employment. There is no qualifying service period for a standard redundancy payout. An employee made redundant receives one month of gross salary. If you offer a mutual termination under Article 331, the minimum rises to 4 months of gross salary. That is the figure most US buyers miss.
- Bulgaria pays statutory sick pay for only the first 3 days at 70% of salary, then the state takes over at 80%. Employer liability is short and capped. Most EOR guides describe the state rate without separating the employer window. The benefits guide explains both phases.
Hiring in Bulgaria adds employer social insurance contributions in the range of 18.9 to 19.6 percent of gross salary, varying by sector. There is no separate pension line on the invoice: pension sits inside those social insurance totals.
The minimum monthly wage rose to €620.20/month from January 2026. Payroll is due twice a month under the Labour Code, and withholding tax must be filed within 25 days of each month end.
Teamed runs Bulgarian payroll, contracts, and compliance through an EOR entity holding the required Bulgarian registrations.
This page is the map. Each guide below is the detail.
Zero FX. No setup fees. 48-hour onboarding. The price your finance team can forecast against without an asterisk.
How much does it cost to hire an employee in Bulgaria in 2026?
A Bulgarian hire adds employer social insurance contributions in the range of 18.9 to 19.6 percent of gross salary on top of pay.
The exact rate depends on the sector. The accident-at-work contribution varies from 0.4 to 1.1 percent, which shifts the total accordingly.
Employer social insurance in Bulgaria covers pension, health insurance, unemployment, and the accident fund. The pension component is the largest share, split roughly equally between employer and employee. The total employer contribution sits in the 18.9 to 19.6 percent band. There is no 13th-month salary required by law, and there is no statutory holiday bonus. Bulgaria is one of the lower-cost EU hiring destinations for social insurance.
Teamed's Bulgaria price is a starting rate, with zero FX in any currency pairing. No setup fees. No exit fees. Salaries, taxes, and benefits passed through at cost on every invoice.
The full breakdown, with worked examples at current statutory rates, is in the cost guide.
Do you need a Bulgarian entity to hire employees in Bulgaria?
No. An Employer of Record runs Bulgarian payroll and contracts from day one.
Your own Bulgarian entity becomes cheaper than EOR somewhere around 5 to 8 employees, depending on salary and administration costs.
Setting up a Bulgarian OOD (the LLC equivalent) requires BGN 2 minimum share capital but comes with ongoing accounting, social insurance registration, and filing obligations. An Employer of Record is faster and cheaper at low headcount. Teamed runs Bulgarian payroll, contracts, and compliance from day one.
The crossover point in Bulgaria typically lands lower than in Western Europe because of the lower salary base. The EOR vs entity guide runs those numbers against current statutory rates.
Most EOR providers will not tell you when you have crossed it. We do, and we help you move. You progress from contractor to EOR to your own Bulgarian entity on one platform under Teamed's Graduation Model, with tenure preserved.
What are the key employment law changes in Bulgaria in 2026?
The national minimum wage rose by 12.6 percent to €620.20/month from 1 January 2026.
Social insurance maximum insurable income is also being updated in 2026. The final figure depends on the state budget, so confirm the current ceiling before processing high-earner payroll.
The Council of Ministers raised the minimum monthly wage from EUR 550 to €620.20/month by Decree No 243 of 13 November 2025. The hourly equivalent is €3.74/hour. This is the largest single-year increase in recent years and takes effect for all pay periods from January 2026.
Bulgaria's Labour Code requires written employment contracts for every hire. Probation is allowed up to 6 months for standard indefinite-term contracts. Payroll tax must be filed within 25 days of each month end, and payroll itself must be paid at least twice a month. The hiring guide covers the day-one obligations in full.
What benefits must you provide Bulgarian employees in 2026?
The statutory floor is 20 days of paid annual leave, plus 15 days of paid paternity leave at 90% of salary.
Annual leave and public holidays are separate counts. There are 15 statutory public holidays.
Statutory annual leave is 20 days of working days under Labour Code Art. 155. Public holidays are on top, not bundled in. Maternity leave runs 410 days calendar days at 90% of average insurable income, funded by the state social insurance fund. After maternity leave, either parent may take a further 104 weeks of parental leave under Art. 164, of which the first 52 weeks are paid at a fixed statutory rate and the remaining 52 are unpaid.
Sick pay for the first 3 days is the employer's liability at 70% of salary. From day 4, the state pays 80% of the employee's average insurable income. The benefits guide covers each entitlement in full.
Read the full Bulgaria benefits guide
What are payroll taxes in Bulgaria in 2026?
Bulgaria taxes all employment income at a flat 10%. There is no progressive scale and no personal allowance.
Employee social insurance is 13.78% of gross earnings. Employer social insurance runs in the range of 18.9 to 19.6 percent, varying by sector.
Bulgaria's flat 10% income tax is one of the lowest rates in the European Union. There are no bands and no taper. Every leu of employment income is taxed at the same rate. Withholding tax must be filed by the 25 daysth of the month following payment. Employees pay 13.78% in total social and health insurance contributions on their gross earnings.
Employer social insurance contributions cover pension, health insurance, unemployment, and the accident-at-work fund. The accident fund varies by sector (0.4 to 1.1 percent), which gives the range. There is a maximum insurable income ceiling that applies to both employer and employee contributions. The tax and payroll guide sets out every component and the 2026 ceiling.
How do you terminate an employee in Bulgaria?
Statutory notice for indefinite-term contracts is 30 days, extendable by agreement up to 3 months.
Standard redundancy severance is one month of gross salary from day one of service, with no qualifying period.
Notice under Labour Code Art. 326 is 30 days for the standard case. Contracts may extend this up to 3 months, but no longer. Notice applies symmetrically: the employee gives the same minimum notice on resignation. During probation up to 6 months, either side may terminate without notice.
Standard redundancy severance is 1 month of gross salary under Art. 222(1). For employer-initiated mutual termination under Art. 331, the minimum rises to 4 months. On retirement, the payout is two months of gross salary, rising to 6 months if the employee has 10 or more years with the same employer. Wrongful dismissal compensation is capped at 26 weeks of lost wages. The termination guide runs each route in full, including the collective redundancy process.
What should you know before hiring in Bulgaria?
Two things catch US buyers out. The first is that Bulgaria pays payroll twice a month by statute.
The second is that an employer-initiated mutual termination triggers a minimum four-month severance payout, not the one-month standard redundancy figure.
Bulgaria's Labour Code requires payroll twice a month. Art. 270 sets the minimum at 24 pay periods a year. Most EOR providers run monthly in practice and handle the legal reconciliation. But this is a compliance point to confirm with your provider before the first payslip goes out. Finance teams set up for monthly runs need to adjust their schedules or accept the provider's twice-monthly cadence.
Mutual termination under Art. 331 is expensive if you initiate it. If the employer proposes a mutual termination, the minimum payout is 4 months of gross salary. Employees often prefer this route because it is faster and avoids a court process. US buyers who plan for a one-month exit and then encounter an Art. 331 conversation get a significant surprise. The termination guide and the EOR vs entity guide both explain how to budget for each scenario.
Frequently asked questions
How much does it cost to hire an employee in Bulgaria?
Employer social insurance contributions in Bulgaria run in the range of 18.9 to 19.6 percent of gross salary, depending on sector. The minimum monthly wage is €620.20/month from January 2026. Teamed's Bulgaria fee is one flat number per employee per month, with zero FX mark-up in any currency pairing. The cost breakdown guide has worked examples.
Can a US company hire in Bulgaria without an entity?
Yes. An Employer of Record like Teamed runs Bulgarian payroll, contracts, and compliance through its own registered entity. You direct the work. Teamed becomes the legal employer of record. Setup takes 48 hours once terms are confirmed. Forming your own Bulgarian OOD requires local registration and ongoing statutory filings.
What is the income tax rate in Bulgaria in 2026?
Bulgaria levies a flat 10% income tax on all employment income with no progressive bands and no personal allowance. Employee social insurance contributions are an additional 13.78% of gross earnings. The tax and payroll guide sets out every component.
What are the statutory notice periods in Bulgaria?
The minimum notice for indefinite-term contracts is 30 days under Labour Code Art. 326. The notice period may be extended by contract up to 3 months, but no further. During the probation period, which can be up to 6 months, either party may terminate without notice.
What is the severance pay in Bulgaria?
Standard redundancy severance under Art. 222(1) is 1 month of gross salary with no qualifying service period. For employer-initiated mutual termination under Art. 331, the minimum payout rises to 4 months of gross salary. On retirement, employees receive two months, rising to 6 months with 10 or more years at the same employer.
What is the minimum annual leave for a Bulgarian employee?
The statutory minimum paid annual leave is 20 days of working days under Labour Code Art. 155. Annual leave and public holidays are separate. There are 15 statutory public holidays. Employers may grant additional leave by contract.
Bulgaria looks simple: flat tax, low cost base, no drawn-out labour court process for small redundancies. The surprise is Art. 331. The moment you propose a mutual exit, the minimum payout jumps to four months. That is four times the standard redundancy figure. Know the route before you open the conversation.
Bulgaria offers a flat 10% income tax and one of the lowest employer social insurance rates in the EU.
The cost model is predictable. The exits are where the detail matters, particularly the four-month floor on mutual terminations.
Read the right Bulgaria guide before the first hire, not after the first severance conversation.
