Taxes and payrolls: the peculiarities of the Bulgarian labour market

Taxes and payrolls: the peculiarities of the Bulgarian labour market

Each labour market has some peculiarities. It may be tricky for foreigners to understand fully the payment methods, the taxes and other benefits related. In TalentUp we are starting a series of different blog articles, one for each country. This article analyses the Bulgarian labour market.

Even if the national currency is the Bulgarian Lev (BGN), the whole article is in EUR to compare easily across countries and exchange rates

General data about the Bulgarian labour market

Minimum wage398.8€
Payment basisMonthly
PaymentMade on the last working day
Maximum working hours a week40 hours
Maximum overtime hours a day3 hours per day (across two consecutive days)
Maximum overtime hours a week6 hours
Maximum overtime hours a year150 hours
Working hours compensationPaid at 150% of the standard salary rate for working day hours, 175% for weekend hours overtime, and 200% for working on public holidays.
Bulgarian minimum wage and maximum working hours disclosure. Data for January 2024. Source:

Payroll taxes in Bulgaria

Social security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.

ContingenciesEmployer %Employee %
Social security (maximum is 1738,34€)13.72%10.58%
Health insurance4.8%3.2%
Accident at Work & Occupational Illness Fund0.4% – 1.1%
Total18.92% – 19.62%13.78%
Share of contingencies applied to the gross salary. Data source:

Once contributions are paid, employees need to pay an income tax at a flat rate of 10%.

Contingencies from self-employees

The social security contributions of self-insured persons are as follows:

ContingenciesEmployee %
State Social Security Funds14.8 – 18.3%
Health insurance8%
Pension insurance fund within the Universal Pension Fund5%
Total27.8 – 31.3%
Contingencies for Bulgarian self-employed. Data source:

Example of a net salary in Bulgaria

As a reference, we use the average salary of a software engineer. In Bulgaria, on average, software engineers earn annually 27,700€.

Gross salary (annually)27,700€
Social security 13.72%3,800.44€10.58%2,930.66€
Health insurance4.8%1,329.60€3.2%886.4€
Accident at Work & Occupational Illness Fund0.4% – 1.1%110.8 – 304.7€
Total18.92% – 19.62%5,240.84 – 5434.74€ 13.78%3,817.06€
Income tax10%2,388.29€
Net salary (annually)21,494.65€
From gross to net salary of a software engineer in Bulgaria.

The employer contributes 5,240.84 to 5,434.74€ to social security and the employee 3,817.06€.

After paying the income tax, the employee has a net salary of 21.494.65€ coming from a gross salary of 27,700€. 

Unemployment regulation in Bulgaria

Officially, the minimum notice period in Bulgaria is 30 days. However, it is common practice to give a margin of 90 days.

The severance payment is usually no less than four months’ gross salary and is paid within the first week after the termination. 

The probationary period is 6 months as a maximum.

Different kinds of leaves in Bulgaria

Paid leave is a minimum of 20 days a year, for employees who have worked for over four months. There are 15 public holidays in Bulgaria.

Sick leave can last for 18 months. The first three days are paid at a rate of 70% of the regular salary by the employer. From day four, the National Social Security Fund pays at 80% of the regular salary rate. There is a 90% rate for work-related sick leave or injury. Social Security only pays leave for employees who have completed at least six months of service or social security payments.

Two days of paid leave are available for the employee’s marriage or for the funerals of family members.

Maternity leave lasts for 410 days, starting 45 days before the due date. The minimum is 135 days. The NHIF pays this leave at 90% of the regular salary rate. It is applied to mothers in all conditions.

Fathers have 15 days of mandatory leave at 90% pay rate. This is only for fathers that have worked for at least a year.

The remaining maternity leave once the child is six months old, can be shared between the mother and the father with the mother’s consent.

Parental leave is available until the child is two for mothers, fathers or grandparents.

Other common Bulgarian benefits

Benefit% of companies with this benefit
Casual dress code41.6
Professional development21.2
Health insurance18
Flat hierarchy5.7
Work-life balance3.9
Top 5 benefits offered by Bulgarian companies. Datasource: TalentUp’s database.

How to employ a Bulgarian worker

To hire in Bulgaria, any business needs an entity. That means:

  • a local office, 
  • an address registered as a subsidiary, 
  • and an account with a local bank. 

Bulgaria also treats contractors differently than full-time employees, so misclassifying a contractor could lead to fines. 

Some platforms (Papaya Global among them) offer the Employer of Record (EoR) service helping companies hire in countries where they do not have any office.

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About Author

Èlia Adroher i Llorens

Content Writer. Èlia studied International Business Economics with a focus on digital marketing. She is also interested in learning about data analysis.