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Employer of Record in Bulgaria
Hire employees in Bulgaria through an Employer of Record (EOR) without setting up a local entity. This comprehensive guide explains Bulgaria's labour laws, payroll, taxes, benefits, and compliance requirements so you can build a compliant Bulgaria workforce with confidence.
What is an Employer of Record in Bulgaria?
An Employer of Record in Bulgaria is a third-party organisation that legally employs workers on behalf of foreign companies. The EOR takes full legal responsibility for the employment relationship under Bulgaria's law, while the client company directs the employee's daily work and performance.
This arrangement allows international businesses to hire Bulgaria professionals quickly and compliantly without establishing a local entity. It is particularly useful for startups, growing businesses, and enterprises exploring the Bulgaria market for the first time. The EOR manages all employment obligations, including contracts, payroll, tax filings, social contributions, benefits, and ongoing compliance with local labour laws.
Why Hire in Bulgaria?
Bulgaria has emerged as one of Europe's most cost-competitive and technically skilled destinations for international hiring. With one of the EU's lowest flat tax rates (10% personal income tax, 10% corporate tax), strong STEM education, and a workforce of over 6 million, Bulgaria attracts increasing investment from technology, BPO, and manufacturing companies.
Sofia, the capital, has become a major outsourcing centre for software development, customer support, and shared services, with thousands of multinational corporations and IT firms operating in the country. Bulgarian professionals are known for strong English and other language skills (German, French, Russian), making them particularly valuable for companies serving multiple European markets.
Bulgaria's recent accession to the Schengen Area (January 2025) and adoption of the Euro (January 2026) have significantly enhanced its appeal for international employers, simplifying cross-border mobility and eliminating currency conversion risk. The country also offers a favourable EU regulatory framework while maintaining one of the lowest cost bases in the bloc.
What Are the Quick Facts About Bulgaria?
Before hiring in Bulgaria, it helps to understand the basic country profile at a glance.
| Category | Details |
|---|---|
| Capital | Sofia |
| Official Language | Bulgarian |
| Currency | Euro (EUR) — Bulgaria adopted the Euro on 1 January 2026 (previously Bulgarian Lev, BGN) |
| Time Zone | Eastern European Time (UTC+2) |
| Population | Approximately 6.4 million |
| Status | EU member state, Eurozone (from 1 January 2026), Schengen Area, NATO |
| Major Industries | Information technology, business process outsourcing, manufacturing, automotive, pharmaceuticals, tourism |
| Workforce Profile | Highly educated, multilingual (Bulgarian, English, German, Russian), strong STEM and IT talent |
What Are the Employment Laws in Bulgaria?
Employment relationships in Bulgaria are primarily governed by the Labour Code of the Republic of Bulgaria (Кодекс на труда), Healthy and Safe Working Conditions Act, Employment Promotion Act, and Social Security Code (KSO). This legislation regulates every aspect of the employment relationship, including contracts, working hours, leave entitlements, termination procedures, and workplace rights.
Written employment contracts are mandatory in Bulgaria and must be drafted in Bulgarian. Every contract must specify the job description, salary, working hours, probation period, benefits, and termination terms. Both fixed-term and indefinite-term contracts are permitted under Bulgaria's law. Fixed-term contracts cannot exceed three years for fixed-term contracts (Article 68), including any renewals.
The standard probation period for most roles is capped at six months. During probation, either the employer or the employee may terminate the relationship with shortened notice as specified by law or the employment contract.
What Are the Working Hours and Overtime Rules in Bulgaria?
The standard workweek in Bulgaria is 40 hours (8 hours/day, 5 days). The maximum weekly working time, including overtime, is 48 hours including overtime. Rest periods and overtime premiums are also regulated by law.
| Factor | Standard |
|---|---|
| Standard Workweek | 40 hours (8 hours/day, 5 days) |
| Maximum Weekly Hours | 48 hours including overtime |
| Weekday Overtime Pay | +50% of regular rate |
| Weekend/Holiday Overtime | +75% on Saturdays/Sundays; +100% on public holidays |
| Night Work Premium | +0.20 BGN per hour (set by Council of Ministers; reviewed annually) |
| Minimum Daily Rest | 12 consecutive hours |
| Minimum Weekly Rest | 48 consecutive hours including Sunday |
What Leave Entitlements Apply in Bulgaria?
Bulgaria employees enjoy comprehensive leave entitlements, including annual leave, public holidays, sick leave, maternity leave, and paternity leave.
| Leave Type | Entitlement |
|---|---|
| Annual Leave | 20 working days minimum (after 4 months of service) |
| Public Holidays | Approximately 12 paid public holidays |
| Sick Leave (Short-term) | 70% of average daily salary by employer for first 3 days, then 80% via NSSI |
| Sick Leave (Long-term) | Funded by the National Social Security Institute (NSSI) thereafter |
| Maternity Leave | 410 calendar days (45 days before birth, 365 days after) |
| Maternity Pay | 90% of average daily insurable income via the National Social Security Institute (NSSI) |
| Paternity Leave | 15 calendar days at full pay (within first 6 months of birth) |
Public Holidays Observed: New Year's Day, Liberation Day (3 March), Orthodox Easter (Good Friday, Easter Monday), Labour Day (1 May), St. George's Day (6 May), Cyril and Methodius Day (24 May), Unification Day (6 September), Independence Day (22 September), Christmas Eve, Christmas Day, and Second Day of Christmas (26 December).
What Is the Minimum Wage and Average Salary in Bulgaria?
Bulgaria's national minimum wage is €620.20 per month (BGN 1,213) from 1 January 2026, representing a 12.6% increase compared to 2025. The minimum hourly rate is €3.74 (BGN 7.31) for a standard 40-hour workweek. Bulgaria adopted the Euro on 1 January 2026 at the fixed exchange rate of 1.95583 BGN = 1 EUR. During the transition period through 30 June 2027, payslips must show amounts in both currencies.
| Salary Category | Monthly Amount (EUR) | Notes |
|---|---|---|
| National Minimum Wage | 620 | EUR per month |
| Average Salary (Sofia) | 1,300 – 1,500 | EUR per month |
| IT & Software Professionals | 2,500 – 4,500+ | EUR per month |
| Senior Tech / Management | 5,000 – 8,000+ | EUR per month |
Salaries are paid monthly in Euros through bank transfer, typically by the last working day of the month. During the dual-currency transition period, payslips must display amounts in both BGN and EUR. 13th-month salaries are not legally required in Bulgaria, but performance bonuses, holiday vouchers, and food vouchers (vauchery for hrana, up to BGN 200 / approximately €102 per month tax-free) are widely offered, particularly in IT, finance, and BPO sectors.
How Do Taxes and Social Contributions Work in Bulgaria?
Bulgaria requires both employers and employees to contribute to social security, and personal income tax is withheld at source by the employer.
Employee Income Tax
| Monthly / Annual Income | Tax Rate |
|---|---|
| Standard employment income | 10% (flat rate) |
| Self-employed income | 15% (after deductions) |
| Dividends | 5% (final withholding) |
| Income from rentals | 10% (flat rate) |
Social Security and Health Contributions
| Contribution Type | Employer | Employee | Total |
|---|---|---|---|
| Pension Insurance | 8.22%–8.92% | 5.58% | 13.80%–14.50% |
| Health Insurance (NHIF) | 4.80% | 3.20% | 8.00% |
| General Sickness & Maternity | 2.10% | 1.40% | 3.50% |
| Unemployment Insurance | 0.60% | 0.40% | 1.00% |
| Work Accident & Occupational Diseases | 0.40%–1.10% | — | 0.40%–1.10% |
| Guaranteed Receivables Fund | 0.10% | — | 0.10% |
| Additional Mandatory Pension (born after 1959) | 2.80% | 2.20% | 5.00% |
| Total | ~18.92–19.62% | 13.78% | 32.70–33.40% |
Note: Contributions are calculated on gross salary up to a statutory ceiling where applicable. Rates are reviewed periodically.
What Are the Mandatory Employee Benefits in Bulgaria?
All employees in Bulgaria are entitled to statutory benefits under the labour code, and many employers add supplementary benefits to attract top talent.
| Mandatory Benefits | Common Supplementary Benefits |
|---|---|
| Paid annual leave | Private health insurance |
| Paid public holidays | Meal vouchers or allowance |
| Paid sick leave | Transportation allowance |
| Maternity and paternity leave | Performance bonuses |
| Social security coverage | Professional development budget |
| Health insurance | Flexible or remote work options |
| Pension contributions | 13th-month salary (some sectors) |
| Workplace safety protection | Stock options or equity |
How Do Termination and Severance Work in Bulgaria?
Termination rules in Bulgaria depend on the employee's tenure. The labour code strictly defines notice periods and severance pay.
Notice Periods by Tenure
| Length of Service | Notice Period |
|---|---|
| Indefinite employment contract | 30 calendar days (employer or employee) |
| Fixed-term contract | 3 calendar months but no longer than the remaining term |
| During probation | Either party may terminate without notice |
| Mass redundancy | 30 days plus consultation requirements with works council |
Severance Pay
| Years of Service | Severance Entitlement |
|---|---|
| Termination due to redundancy or downsizing | 1 monthly gross salary |
| Termination due to illness preventing work | 2 monthly gross salaries |
| Pensioner reaching retirement age | 2 monthly gross salaries (6 if 10+ years with employer) |
| Wrongful dismissal | Up to 6 months' salary plus reinstatement (court order) |
Legal Grounds for Termination
Employment in Bulgaria can be terminated by mutual agreement, voluntary resignation, the natural expiration of a fixed-term contract, just cause due to serious misconduct, or economic and organisational reasons, with proper notice.
Protected Categories
Bulgaria labour law offers special protection against termination for pregnant employees, employees on maternity or paternity leave, employees on sick leave, and trade union representatives.
What Are the Work Permit and Visa Requirements in Bulgaria?
Foreign nationals who are not EU, EEA, or Swiss citizens generally require a Single Permit, which combines a work and residence authorisation in one document. The application is submitted to the Migration Directorate after the employer obtains approval from the Employment Agency. Highly qualified employees may opt for the EU Blue Card route, which offers preferential terms.
| Permit Type | Purpose | Issuing Authority |
|---|---|---|
| Single Permit (Work + Residence) | Most non-EU employees | Migration Directorate |
| EU Blue Card | Highly qualified non-EU workers | Migration Directorate |
| Seasonal Work Permit | Agriculture and tourism | Employment Agency |
| ICT Permit | Intra-corporate transferees | Migration Directorate |
| Long-term Visa D + Residence Permit | Standard route for work over 90 days | Bulgarian embassies |
Processing typically takes between 30 and 60 days depending on permit type and workload, depending on documentation and administrative workload. Citizens of EU and EEA member states and Switzerland have full access to the Bulgarian labour market without a work permit. Bulgaria joined the Schengen Area on 1 January 2025 and adopted the Euro on 1 January 2026, simplifying mobility and payroll for foreign companies.
How Do You Hire in Bulgaria Through an EOR?
The hiring process through an Employer of Record typically follows five clear stages, from candidate selection to ongoing compliance management.
| Step | Action | Responsibility |
|---|---|---|
| 1 | Identify and select the Bulgaria candidate | Client company |
| 2 | Engage an EOR and sign a service agreement | Client + EOR |
| 3 | Issue a written Bulgarian-language contract | EOR (legal employer) |
| 4 | Register the employee with tax and social security | EOR |
| 5 | Process monthly payroll and maintain compliance | EOR |
Should You Set Up a Local Entity in Bulgaria Instead?
For companies with significant long-term investment plans in Bulgaria, establishing a local entity may be a viable alternative to using an EOR.
| Entity Type | Description | Best For |
|---|---|---|
| OOD (Limited Liability Company) | Most common form for foreign investors | Small to medium foreign businesses |
| AD (Joint Stock Company) | Larger enterprises and listed firms | Major investors and regulated activities |
| Branch Office (Klon) | Extension of foreign parent | Operational presence |
| Sole Proprietor (ET) | Individual entrepreneurs | Small businesses |
Setting up an OOD in Bulgaria typically takes two to four weeks. The minimum share capital is BGN 2 (approximately €1) under simplified procedures, and registration is handled through the Bulgarian Trade Register. Bulgaria offers one of the lowest corporate tax rates in the EU at 10%, making it attractive for international investors. For companies hiring fewer than 10 employees, an EOR is generally faster, more cost-effective, and avoids the administrative burden of payroll, NSSI, and NHIF compliance.
EOR vs Local Entity vs Contractor — Which Is Right for You?
Comparing the three main hiring models helps you choose the right approach for your Bulgaria workforce.
| Factor | Employer of Record | Own Legal Entity | Freelancer / Contractor |
|---|---|---|---|
| Setup Time | 7–12 business days | Several weeks to months | Immediate |
| Setup Cost | Low | High | Very low |
| Compliance | Handled by EOR | Your responsibility | Misclassification risk |
| Statutory Benefits | Fully provided | Must manage yourself | Typically none |
| Control Over Staff | High | Full | Limited |
| IP Protection | Strong | Strong | Often weak |
| Best For | Small to medium teams | Long-term major presence | Short-term specialists |
What Common Hiring Mistakes Should You Avoid in Bulgaria?
Companies new to hiring in Bulgaria often encounter several common pitfalls. Misclassifying employees as independent contractors is a significant risk, as Bulgaria has clear legal distinctions between the two, and reclassification can lead to penalties and back payments.
Failing to issue written employment contracts in Bulgarian is another frequent error, as verbal or foreign-language agreements may not be legally enforceable. Ignoring collective bargaining agreements in regulated sectors can lead to compliance issues, as can miscalculating social security contributions since rates and ceilings are periodically updated.
Skipping proper documentation of probation periods can inadvertently extend employee protections beyond what the employer intended. Finally, providing inadequate notice of termination or failing to follow proper dismissal procedures can expose companies to compensation claims and legal disputes.
Which Industries Are Hiring Most in Bulgaria?
Several key industries drive Bulgaria's labour market, each offering a distinct talent pool for international employers.
| Industry | Key Roles | Talent Highlights |
|---|---|---|
| IT & Software Development | Developers, QA, DevOps, data engineers | Top EU outsourcing destination |
| BPO & Shared Services | Multilingual agents, finance professionals | Sofia is a major BPO hub |
| Manufacturing & Automotive | Engineers, production managers | Strong supplier base |
| Pharmaceuticals | Clinical specialists, regulatory affairs | Established pharma sector |
| Tourism & Hospitality | Hotel managers, guides | Black Sea and ski tourism |
| Finance & Banking | Analysts, accountants, fintech | Eurozone-aligned sector |
| Logistics & Transport | Supply chain specialists | Strategic Black Sea ports |
Are you an Employer of Record (EOR) provider looking to expand your reach in Bulgaria?
We help EOR companies increase their visibility and generate real business opportunities by featuring them on our platform through:
- Company listings
- Dedicated SEO-optimised articles
- Sponsored content & brand features
- Bulgaria-focused landing pages
- Social media promotion targeting regional and international audiences
Our audience includes businesses, startups, and HR professionals actively exploring hiring solutions in Bulgaria and Southeast Europe and the Balkans — giving your brand direct access to decision-makers ready to expand their teams.
By partnering with us, you can:
- Position your company in Bulgaria's growing hiring market
- Connect with companies looking to hire local and international talent
- Showcase your EOR services, compliance support, and expertise
- Generate qualified leads from businesses entering the Bulgaria market
- Build trust and authority through targeted, high-quality content
- Expand your presence in Southeast Europe and the Balkans and the wider region
Bulgaria is becoming an attractive destination for global hiring — making it a strong opportunity for EOR providers.
Disclaimer
This guide is provided for educational and informational purposes only. Bulgaria's labour laws, tax rates, and social contribution percentages are subject to change. Always consult a qualified Employer of Record provider, local legal counsel, or certified tax advisor before making hiring or employment decisions in Bulgaria.
Bulgaria
Hiring in Bulgaria requires a clear understanding of local labour laws, payroll obligations, and statutory benefits. Our country-specific guide for Bulgaria helps employers navigate salary expectations, tax structures, social security contributions, working hours, leave entitlements, and termination rules under the Bulgarian Labour Code.
Whether you're recruiting healthcare professionals in Sofia, hospitality and tourism staff along the Black Sea in Varna and Burgas, or manufacturing and construction workers across Plovdiv, Ruse, Stara Zagora, and Pleven, AtoZ Serwis Plus ensures every hire is fully compliant with Bulgarian regulations.
From employment contracts and work permits to onboarding and ongoing HR support, we help you make data-driven hiring decisions and avoid costly compliance mistakes — so you can build a reliable, locally compliant workforce across all 28 provinces of Bulgaria.
