---
title: "Bulgaria Termination & Severance 2026"
description: "Bulgaria 2026: flat 30 days notice regardless of tenure, day-one unfair dismissal protection, and a mandatory 4 months severance floor under Article 331."
canonical: https://www.teamed.global/country-hiring-guides/bulgaria/termination-and-severance
---

Bulgaria · Termination child

Served by Teamed vetted partner-entity network in Bulgaria

# How do you *terminate an employee in Bulgaria* in 2026?

Bulgarian notice doesn't scale with tenure. Under the [Labour Code Art. 326](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/bulgaria), the statutory minimum is a flat 30 days for both sides, and unfair dismissal protection applies from the first day of employment, with no qualifying period.

Last reviewed 12 June 2026 · Bulgaria guide

![A view of Sofia city centre with the Alexander Nevsky Cathedral dome against a clear blue sky.](/images/country-guides/bulgaria-termination-severance.webp)

Illustration · Sofia, Bulgaria

Answer.cite this

Bulgarian notice is a flat 30 days for both sides on an indefinite contract. It does not grow with years of service. Parties can agree up to 3 months in the contract ([Labour Code](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/bulgaria)).

Redundancy pay is owed from day one of service. The rate is 1 month of gross salary per year worked. There is no cap on the total. Unfair dismissal protection also starts on day one. Courts can award up to 26 weeks of lost wages for an unlawful termination.

Article 331 gives employers a clean exit route. The employer offers to end the contract by agreement. The employee has 7 days to accept or refuse. If they accept, the employer must pay at least 4 months of gross salary.

![A wooden desk in a Bulgarian office with a resignation letter and a signed contract.](/images/country-guides/bulgaria-termination-polaroid-1.webp)

Labour Code rules

## How much notice must you give a Bulgarian employee?

The minimum notice is 30 days, flat, for both employer and employee on an indefinite contract. It does not grow with years of service ([Labour Code Art. 326(2)](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/bulgaria)).

Parties can agree a longer notice period in the contract. It cannot exceed 3 months for either side.

| Contract type / situation | Statutory minimum notice |
| --- | --- |
| Indefinite-term contract (standard) | 30 days |
| Employee resignation (indefinite-term) | 30 days |
| During probation period | No notice required (either party) |
| Maximum contractually agreed notice | 3 months |

During the probation period (up to 6 months under Labour Code Art. 70), either party may terminate without notice at all. This is a significant asymmetry: a Bulgarian employer testing a new hire has the full 6 months window to end the relationship cleanly, with no severance obligation and no notice requirement.

Fixed-term contracts expire automatically at the agreed end date. Early termination of a fixed-term contract by the employer outside of valid cause entitles the employee to compensation for the unexpired period.

### Pay in lieu of notice

The Labour Code permits the employer to substitute payment of wages for the notice period rather than requiring the employee to work it out. This is common in practice, particularly for senior or commercial roles where business continuity is a concern. Such payments are treated as wages and subject to normal social insurance contributions.

## What grounds justify dismissal and what procedure applies?

Every dismissal in Bulgaria needs a lawful ground. The [Labour Code](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/bulgaria) lists the allowed grounds in Articles 328 and 330. A dismissal outside that list is not valid, no matter how it is framed.

Unfair dismissal protection starts on the first day of employment. There is no qualifying period.

The main lawful grounds for employer-initiated termination fall into two categories:

### With notice (Labour Code Art. 328)

- **Redundancy**: closure of the enterprise, reduction in workforce, or elimination of the position
- **Capability / qualification**: the employee no longer meets the qualification requirements for the role
- **Performance**: failure to meet established performance standards, documented
- **Long-term illness**: incapacity lasting more than 2 years (or within certain periods for other conditions), subject to statutory severance under Art. 222(2)
- **Reaching retirement age**: entitles the employee to the retirement severance under Art. 222(3)
- **Business change**: change in the employer's organisational or technological structure

### Without notice (Labour Code Art. 330)

- **Disciplinary dismissal**: gross misconduct, repeated breaches of workplace discipline, deliberate damage to employer property, disclosure of trade secrets, or similar

Disciplinary dismissal requires a formal procedure: the employer must invite the employee to give a written explanation before the dismissal order is issued. Skipping this step makes the dismissal unlawful even if the underlying conduct was genuine gross misconduct.

### Protected categories

The Labour Code provides special (prior) approval requirements from the Labour Inspectorate for termination of employees who are pregnant or on maternity leave, employees with young children, employees with certain medical conditions, union representatives, and others. Terminating such employees without the required prior permit is unlawful regardless of the ground cited, and courts will reinstate the employee or award damages.

### Remedies for unlawful dismissal

An employee whose dismissal is found unlawful is entitled to reinstatement to the same or equivalent role, plus compensation for lost wages up to 26 weeks of gross pay under [Labour Code Art. 225(1)](http://www.bulgaria-labour-law.bg/protection-against-dismissal.html). There is no qualifying service threshold: protection applies from day one.

1. Confirm a lawful ground Every Bulgarian dismissal must fit one of the grounds in Labour Code Art. 328 (with notice) or Art. 330 (disciplinary, without notice). Dismissals outside this list are unlawful regardless of the commercial rationale.
2. Check for protected status Before issuing any dismissal order, verify whether the employee holds protected status (pregnancy, maternity leave, union role, certain medical conditions). Terminating a protected employee without prior Labour Inspectorate approval invalidates the dismissal.
3. Issue written notice or invitation to explain For with-notice grounds, issue the formal dismissal order in writing stating the ground. For disciplinary dismissal (Art. 330), first invite the employee in writing to submit a written explanation, and allow reasonable time for this before issuing the order.
4. Calculate severance and final pay Determine the applicable severance under Arts. 222 or 331 and add unused annual leave compensation. Bulgarian law requires full settlement on the date of termination, not at next payroll.
5. Deliver the dismissal order and settle on the day Hand the employee a signed written dismissal order (or mutual-termination agreement) and transfer all final pay on the same date. A workbook entry recording the employment end must be completed promptly.

## How is redundancy pay calculated in Bulgaria?

Redundancy pay is owed from day one of service. The rate is 1 month of gross monthly salary per year worked. There is no cap on the total payout ([Labour Code Art. 222(1)](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/bulgaria)).

The law also sets separate pay-outs for termination due to illness and for termination when the employee reaches retirement age.

| Termination ground | Severance entitlement | Statute |
| --- | --- | --- |
| Redundancy (closure, downsizing, position elimination) | 1 month of gross salary per year of service | Art. 222(1) |
| Termination due to long-term illness (5+ years service) | 2 months of gross salary | Art. 222(2) |
| Retirement eligibility (standard) | 2 months of gross salary | Art. 222(3) |
| Retirement eligibility (10+ years with same employer) | 6 months of gross salary | Art. 222(3) |
| Employer-initiated mutual agreement (Art. 331) | Minimum 4 months of gross salary | Art. 331 |

There is no statutory weekly-pay cap in Bulgaria. Severance is calculated on the employee's actual gross monthly remuneration, including fixed allowances. For a well-paid senior engineer, redundancy severance accrues uncapped at one month per year of service, which can become a significant liability for longer-tenured employees.

### Final pay on the day of termination

Bulgarian law requires all outstanding wages, accrued leave pay, and severance to be settled on the date of termination. The Labour Code does not allow a grace period. In practice, payroll processing sometimes runs to the next cycle, but the strict reading of the statute is payment on the day, and the labour inspectorate applies that standard. Separately, unused annual leave must be compensated in full at termination.

## When do collective redundancy rules apply in Bulgaria?

Collective redundancy rules kick in at different thresholds depending on company size. For companies with 20 to 99 employees, the trigger is 10 or more dismissals within 30 days. For 100 to 299 employees, it is 10% of the workforce. For 300 or more employees, it is 30 or more dismissals ([Labour Code Art. 130a](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/bulgaria)).

Before any dismissals happen, you must consult worker representatives for at least 45 days. You must also notify the Employment Agency.

Bulgarian Ministry of Labour · Labour Code Art. 130a

Propose redundancies meeting the Art. 130a thresholds within a 30 days counting window and the collective rules apply: 45 days of mandatory consultation with worker representatives before the first dismissal, plus written notification to the Employment Agency at least 30 days before dismissals take effect. Failure to follow either step exposes the employer to reinstatement orders and compensation claims for every affected employee.

Source: [CMS Expert Guide to Employment Termination in Bulgaria, Labour Code Art. 130a](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/bulgaria)

### The two-stage procedure

When collective redundancy rules are triggered, the employer must:

1. Begin good-faith consultation with the trade union or elected worker representatives, providing written information on the reasons for the redundancy, the number and categories of affected employees, and the selection criteria. Consultation must run for at least 45 days and the employer must genuinely consider alternatives.
2. Notify the Employment Agency in writing, providing the same information given to worker representatives. Dismissals may not take effect until at least 30 days after the Employment Agency receives the notification.

The two stages may run concurrently: starting consultation and filing with the Employment Agency at the same time is common practice, which means the practical minimum pre-dismissal period is 45 days (the longer of the two), not 45 days plus 30 days.

### Selection criteria and anti-discrimination

The Labour Code requires selection criteria to be documented and applied objectively. Employees with certain protected characteristics, including pregnant women, those on maternity or parental leave, union officials, and certain groups with medical conditions, cannot be selected regardless of how the criteria are applied: prior Labour Inspectorate approval is required for their inclusion.

## Mutual termination under Article 331: the structured exit route

This is a specific route in the law, separate from a general mutual agreement to end a contract. The employer proposes termination. The employee has 7 days to accept or refuse ([Labour Code Art. 331](https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/bulgaria)).

If the employee accepts, the employer must pay out at least 4 months of gross monthly salary. The employer cannot pressure the employee to accept. A refusal cannot be used as grounds for any other dismissal.

Article 331 is useful for employers who want a clean, challenge-resistant exit for a role that has become redundant or where the relationship has broken down without clear disciplinary grounds. The statutory minimum of 4 months creates a floor for negotiation, but in practice many employers offer more to secure the agreement and a full waiver of future claims.

The mutual-termination approach under Art. 331 is different from a general bilateral agreement to end the contract (also permitted under the Labour Code). The key distinctions are:

- **Art. 331 (employer-initiated offer):** triggers the minimum 4 months payout; the employee has a 7-day window to accept; a written signed agreement is required
- **General mutual consent (Art. 325(1)(1)):** no minimum payout is mandated; both parties must agree on terms; used most often when the employee also wants to leave

From the employer's perspective, Art. 331 is the lower-risk route for an involuntary exit: it avoids the procedural requirements of capability or disciplinary dismissal, does not require a valid ground from the Art. 328 list, and removes the risk of reinstatement claims, because the employee has agreed to terminate. The 4 months floor is the price of that certainty.

Teamed's legal operations team handles the Art. 331 offer process, the 7-day acceptance window, the severance calculation, and the final-pay settlement on the termination date. The decision on what to offer above the statutory floor rests with the client.

## How Teamed runs Bulgarian terminations

Teamed becomes your legal [employer of record](/lp/employer-of-record) in Bulgaria for [**from $599 per employee per month**](/pricing). There is **zero FX mark-up** in any currency. Our partner entity in Bulgaria is the legal employer. The termination ground, notice, and severance all run through Teamed's Bulgarian operations.

We handle ground selection, notice documentation, severance calculation, the Art. 331 offer process where relevant, and final-pay settlement. All of this runs on **one platform**. The decision on who to dismiss, why, and on what terms stays with you.

**Real HR and legal experts** manage your Bulgarian hires from the offer letter through every monthly payroll run. **An actual person** handles your account, not a shared queue. There is **no setup fee** and **no exit fee**, and every employer cost **passes through at cost, itemised** on your invoice.

The split of responsibilities under EOR for Bulgarian terminations:

| What Teamed handles | What the client decides |
| --- | --- |
| Selecting the correct Labour Code ground (Art. 328 or 330) | Whether to dismiss and the business reason |
| Issuing the required written explanations and dismissal orders | Performance standards and what constitutes breach |
| Calculating the notice period and any pay-in-lieu of notice | Whether to pay out notice or require it to be worked |
| Severance calculation (Art. 222, Art. 331) | Whether to offer above the statutory floor |
| Labour Inspectorate prior-approval process for protected employees | Which roles are affected and the selection criteria |
| Final pay settlement on the termination date: wages, leave, severance | Communication with the wider team |
| Coordination with Bulgarian employment lawyers for contested cases | Settlement vs. defence strategy |

EOR payroll, contractor onboarding, and entity setup all live on **one platform**. A Bulgarian contractor who converts to direct employment keeps their record, and that same employee can **graduate** from EOR to your own Bulgarian entity without switching systems. Run the [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator) to find the month the model flips. EOR is the right structure for an early Bulgarian hire, **until it isn't**. Start from the Bulgaria hiring overview; each guide covers one layer of Bulgarian employment law.

## Frequently asked questions

How much notice must you give a Bulgarian employee in 2026?

The statutory minimum notice for an indefinite-term contract is a flat 30 days for both employer and employee under Labour Code Art. 326(2). Notice does not scale with tenure. Parties may agree up to 3 months in the contract. During the probation period (up to 6 months), either party may terminate without any notice.

Does Bulgaria require severance pay on redundancy?

Yes. Under Labour Code Art. 222(1), redundancy severance is owed from the first day of service at 1 month of gross monthly salary per year worked with the employer. There is no statutory cap on the total amount, so severance accrues uncapped on actual gross pay for longer-tenured employees.

What is the Article 331 mutual termination route?

Labour Code Art. 331 allows an employer to propose termination by mutual agreement. The employee has 7 days to accept or refuse. If the employee accepts, the employer must pay at least 4 months of gross monthly salary. It is a clean, challenge-resistant exit route: no fair-reason ground is required and reinstatement risk is removed once the employee signs.

When does unfair dismissal protection apply in Bulgaria?

Unfair dismissal protection under Labour Code Art. 344 applies from the first day of employment, with no qualifying service period. An employee whose dismissal is found unlawful is entitled to reinstatement plus compensation for lost wages of up to 26 weeks of gross pay under Art. 225(1).

When do collective redundancy consultation rules apply in Bulgaria?

Labour Code Art. 130a triggers collective rules when the number of proposed redundancies within 30 days exceeds the applicable threshold: 10 or more in companies with 20 to 99 employees, 10% of the workforce in companies with 100 to 299 employees, or 30 or more in companies with 300 or more employees. Consultation with worker representatives must run for at least 45 days, and the Employment Agency must be notified at least 30 days before dismissals take effect.

Teamed Legal Operations

Bulgaria's flat notice period surprises employers used to tenure-linked regimes. Thirty days for a 10-year employee and thirty days for a 10-month employee. Where the real cost risk sits is in the severance formula: one month per year, no cap, calculated on actual gross pay including allowances.

A note from Tom Price-Daniel

Bulgaria gives you 30 days notice regardless of how long someone has worked there. No accrual, no tenure bands.  
What does scale with years is the severance: one month of gross salary per year, uncapped, owed from day one of service.  
And the mutual-termination route under Article 331 guarantees at least 4 months to get there cleanly.

Tom Price-Daniel · Co-founder, Teamed

## Related Bulgaria guides

- Hiring in Bulgaria, overviewparent
- [Employer of Record overview](/lp/employer-of-record)core
- [Pricing, Zero FX Fixed](/pricing)core
- [EOR vs Entity Crossover Calculator](https://www.teamed.global/tools/crossover-calculator)tool
- [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost)tool
- [Romania termination and severance](/country-hiring-guides/romania/termination-and-severance)neighbour
- [Talk to an expert](https://www.teamed.global/contact)CTA

A note on this page.

This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction, so verify current requirements with the relevant authorities, including the Bulgarian National Revenue Agency (NRA) and the General Labour Inspectorate Executive Agency, or speak to a qualified professional before relying on any specific framework. The Labour Code figures on this page reflect the position as of January 2026; Bulgaria's 2026 social security ceiling amendments were pending final gazette publication at time of research.