Hire and pay employees in Bulgaria quickly and compliantly

Complying with labor and employment laws in Bulgaria

Bulgaria's labor and employment laws can be a complex compliance maze. Understanding the legal landscape, especially the Labour Code (Кодекс на труда), is essential for operating legally and ethically in Bulgaria.

But no matter where in the world you hire, learning the ins and outs of labor and employment laws in new jurisdictions isn’t easy, and Bulgaria’s laws are as complex as any other country’s. If you’re looking to hire in Bulgaria, simplify your compliance work by partnering with Rippling EOR, which can offer expert HR support on local employment regulations so your business is always up to date on the latest laws in Bulgaria and beyond.

Employment contracts in Bulgaria

An employment contract is a legally binding agreement between an employer and an employee that outlines the terms and conditions of the employment relationship. Under Bulgaria’s Labour Code, every formal employment relationship requires a written contract executed before the employee starts work. The Labour Code’s Article 66 mandates that the contract include at least these specific elements:

• Full personal details of both parties
• Place and nature of work
• Start date and contract type (indefinite or fixed-term)
• End date, if applicable
• Amount of basic and extended paid annual leave, plus any additional paid annual leaves the employee will receive
• Working hours and probationary period (if applicable)
• Length of notice periods required for both the employee and the employer to terminate the contract
• Details of any collective agreements that apply to the employee
• Any other terms agreed upon by the employee and employer not regulated by the Labour Law

Employers must register all contracts with the National Revenue Agency within three days of signing. Ongoing written amendments are mandatory for any changes you make to an employment contract after it’s signed and registered.

Employers in Bulgaria should tailor each employment contract to include specific details such as remote work policies, confidentiality provisions, or equipment requirements. These kinds of specifics help clarify arrangement types, especially crucial for avoiding contractor misclassification and other potential misunderstandings or disputes down the line.

Labor unions in Bulgaria

Labor unions in Bulgaria are a constitutionally protected force in the workplace and play a meaningful role in sectors like healthcare, education, public transportation, and energy. Their primary legal framework comes from the Labour Code, specifically Articles 33-37, which outline employees’ rights to unionize, bargain collectively, and take industrial action.

The two largest national trade union confederations in Bulgaria are:

• Confederation of Independent Trade Unions in Bulgaria (CITUB)
• Confederation of Labour “Podkrepa”

Both are active members of the European Trade Union Confederation (ETUC) and represent workers across a wide spectrum of industries. 

Other key things employers should know about Bulgaria’s union landscape include:

1. Unions have collective bargaining power. When a union is present in a company or industry, it has the power to negotiate with employers on wages, benefits, health and safety conditions, and work schedules. These agreements are binding and enforceable by law under Article 50 of the Labour Code.
2. Workplace representation is formalized. Employee representatives—often union delegates—are entitled to participate in decision-making processes related to employment changes, restructuring, and mass layoffs.
3. Strikes are legal but regulated. Under Articles 14–17 of the Law on Settlement of Collective Labor Disputes, workers can strike if negotiations break down. However, essential services (such as hospital and public transit workers) are subject to restrictions that exist to ensure a minimum level of service is maintained during strikes.
4. Union participation varies by sector. In white-collar industries such as tech and marketing, union presence may be minimal or even nonexistent, particularly among startups and international companies. But more traditional industries, especially those rooted in Sofia, Plovdiv, and Varna, may have long-standing union traditions.

Union engagement in Bulgaria may not be as widespread as in some Nordic countries, but where it does exist, employers should take it seriously. In industries with a strong union footprint, maintaining open communication channels and participating in negotiations in good faith is not only a legal requirement—it’s essential for long-term stability.

Mitigating permanent establishment risk in Bulgaria

Permanent establishment (PE) is a concept in international tax law that refers to a fixed place of business through which a company conducts its business activities in a foreign country. It is a key factor in determining whether a company is subject to corporate tax in a foreign jurisdiction. If a company has a permanent establishment in a foreign country, it may be required to pay taxes on the income generated from its activities in that country.

The definition of permanent establishment can vary depending on tax treaties and local laws. Under Bulgaria’s tax laws, the definition of PE generally follows the OECD model, but covers a broader scope of business activities that would constitute a tax presence in the country. A non-resident business may trigger PE if it:

• Has a fixed place of business (own, rent, or otherwise use) in Bulgaria
• Partly or wholly carries out business activities in Bulgaria

Businesses expanding to, doing business in, or hiring in Bulgaria and other countries can mitigate their PE risk by:

• Keeping Bulgarian employees in supportive roles only and avoiding direct contract signings in Bulgaria
• Concluding major sales or signings outside Bulgaria
• Documenting staff tasks carefully to show no final authority for contract closures
• Consulting a local tax advisor for clarity about the risk of inadvertently forming a PE in Bulgaria

Probationary period in Bulgaria

A probationary period is used to assess and monitor the performance of new employees. In Bulgaria, employers are required to state the length of the employee’s probation period in the employment contract. Probation periods are common for new hires in the country and are governed by Article 70 of the Labour Code, which states that a probationary period may last up to six months—anything longer is not allowed (though a shorter probation period is acceptable, if agreed upon by the employee and employer).

All probation periods must be agreed upon in writing and specified in the employment contract.

The parties can agree whether the probation is for the benefit of the employer, the employee, or both. This affects who can terminate the contract during probation without cause. If the probation is for the benefit of one party, that party can terminate the employment at any time without notice. If it’s mutual, both parties can end the relationship without notice.

For example, a company based in Sofia might hire a junior developer with a six-month probation "in favor of the employer." If the employee underperforms, the company can legally end the contract at any time during probation, no questions asked. That said, many businesses still provide a brief notice out of professional courtesy. Using probation periods allows you to assess fit while staying compliant with Bulgaria’s employee protection standards.

Local laws in Bulgaria

Beyond the Bulgarian Labour Code, there are several key laws and legal frameworks that impact how employers must operate in Bulgaria. Understanding these adjacent areas of legislation is critical for full compliance and fostering strong, trust-based relationships with your local workforce.

When expanding into or hiring in Bulgaria, here are some essential legal areas to keep in mind:

• Personal Data Protection Act (PDPA): Bulgaria enforces the EU’s GDPR via its Personal Data Protection Act. Employers must obtain explicit consent to collect, store, or transfer sensitive employee information, such as medical records, ID numbers, or biometric data.
• Protection Against Discrimination Act: In Bulgaria, employers are forbidden from discriminating based on gender, ethnicity, age, disability, religion, or political affiliation. Violations can trigger administrative penalties and civil suits.
• Gender pay equity: Article 243 of the Labour Code mandates equal pay for equal work. Any disparities must be justifiable with objective criteria like seniority or education, not gender or ethnicity.
• Remote work laws: As remote work becomes more common, Bulgaria has proactively passed Ordinance No. RD-07-2/2020, which outlines the specific requirements for remote work contracts, such as specifying work location, communication protocols, and tools provided by the employer.

From small HR decisions to long-term strategy, understanding these local nuances will help your business navigate the legal terrain in Bulgaria with confidence and position your team as a respected employer in Sofia, Varna, Plovdiv, or anywhere in between.

Worker classification and misclassification in Bulgaria: Contractors vs. employees

When hiring new talent in Bulgaria, it's essential to distinguish between workers hired under an employment contract governed by the Labour Code and independent contractors (also called freelancers) who operate under civil or commercial agreements, such as those outlined in the Obligations and Contracts Act (OCA). Misclassification isn’t just semantics—it can trigger audits, demand retroactive contributions, and may even result in court action, so it’s crucial to get it right from the start.

It’s also important for your business operations to decide which type of working arrangement is better suited to your needs. Bulgarian law focuses on the actual nature of the working relationship rather than just contract titles. Below, learn more about the key differences between the two types of worker classifications.

Worker classification in Bulgaria: Key differences between contractors and employees

Consequences of misclassification in Bulgaria

Failing to properly classify workers in Bulgaria can lead to serious consequences. Bulgarian authorities take a substance-over-form approach: If a relationship resembles employment in practice, it is treated as such. Some of the potential repercussions of misclassifying employees as independent contractors in Bulgaria include:

• Back social security contributions: Employers may be required to pay unpaid employer contributions, along with interest and penalties.
• Fines and administrative sanctions: The Inspectorate of Labour and Social Insurances can impose penalties under the Labour Code for having undeclared employment.
• Claims by the worker: Misclassified workers can demand payment of leave days, severance, notice pay, and other employment entitlements retroactively.

To stay compliant, employers should make sure independent contractors truly operate independently—no fixed hours, no oversight or control in their work process, and no exclusive dedication to one company. Working with a local EOR or payroll provider can also help maintain proper classification standards and avoid costly missteps.

Wages and payroll in Bulgaria

Navigating wages and payroll in Bulgaria may seem straightforward at first glance—after all, information like the minimum wage is easy to find. However, compliance hinges on understanding how rules apply in everyday operations, including pay schedules, bonus structures, and regulatory remittance rates. For any organization with a global team, managing wages and payroll is one of the most complex parts of the process. Here’s what employers need to know about wages and payroll in Bulgaria.

Minimum wage in Bulgaria

As of January 1, 2025, the national minimum wage in Bulgaria is BGN 1,077 per month, or BGN 6.49 per hour, as set by the Council of Ministers. This baseline applies to all full-time roles; employers who pay less than this may be subject to government penalties.

Employers should also note that minimum wage figures are adjusted annually (by Sept. 1 each year) based on average salary trends, inflation, and living cost assessments. While collective bargaining agreements can set higher minimums for certain sectors, they cannot go below the national standard.

Payroll frequency in Bulgaria

The standard payroll cycle in Bulgaria is monthly, and most employers, especially in Bulgaria’s urban centers, choose to issue paychecks at the end of each month. Employers are free to offer more frequent pay periods, but under the Labour Code (Article 66), the pay frequency must be included in the employment contract.

13th month pay in Bulgaria 

13th month pay is an additional payment given to employees, usually equivalent to one month’s salary. Employers commonly give this payment as a holiday or year-end bonus. Contrary to some European nations, Bulgaria does not legally require a 13th month salary or bonus. However, many companies offer an end-of-year bonus as a goodwill gesture.

If an annual bonus is contractual, it becomes legally enforceable. To avoid ambiguity, employers should clearly define bonus criteria—dates, performance goals, or eligibility—in employment documents or staff handbooks.

Run payroll compliantly in Bulgaria

Running compliant payroll in Bulgaria means:

• Paying at least the minimum wage
• Calculating and withholding the correct payroll taxes
• Posting payroll taxes to the National Revenue Agency by the correct deadlines
• Reporting labor data using the correct forms
• Maintaining employee payroll records for 50 years as required by the Labour Code

The system is well-defined by law, but late or inaccurate filings trigger penalties, so reliable software or an accountant familiar with local law can save serious headaches.

Another option is an employer of record. Working with an EOR means getting all the help you need to handle deductions, adhere to local wage laws, and make accurate, on-time payments. Rippling EOR makes hiring and paying employees across the globe quicker and easier than ever.

Employer and employee taxes in Bulgaria

For any organization with a global team, one crucial yet complex part of business operations is understanding taxes across international borders. Navigating taxes in the Balkans can be as intricate as threading through Sofia’s historic old town, but understanding the system is essential for compliance and peace of mind. Bulgaria follows EU-aligned tax rules with a notably flat structure, overseen by the National Revenue Agency (NRA). It’s up to employers to accurately compute payroll withholdings, remit social and health insurance contributions, and navigate the country’s (fairly straightforward) flat-rate income tax.

Here’s what you need to know to stay on the right side of tax law in Bulgaria.

Employer taxes in Bulgaria

Here are the mandatory employer payroll taxes in Bulgaria:

Employee taxes in Bulgaria

The following contributions must be deducted from employees’ paychecks as a percentage of their income: 

Bulgarian employees also pay a flat income tax of 10%, which employers must withhold from their income and remit on their behalf along with other payroll taxes.

Penalties for not paying taxes in Bulgaria

Failure to meet tax obligations in Bulgaria can come back to haunt you. Underpayment or late payment of income tax or social contributions can lead to:

• Late payment interest and fines, often levied per day on overdue amounts 
• Administrative penalties for failure to file declarations, register contracts, or remit withheld taxes
• Reassessment and retroactive contributions, often extending back several years if discrepancies or underreporting are uncovered

If your business is expanding into Sofia, Plovdiv, Varna, or elsewhere, a solid payroll system or local accounting support can save you from such pitfalls. They can manage deduction calculations, filing deadlines, and monthly declarations. Or you can mitigate international tax compliance problems by letting an EOR handle payroll taxes on your behalf. The EOR can ensure all your local taxes are paid correctly and on time, allowing you to focus on growing your business in Bulgaria and beyond.

Employee benefits in Bulgaria

Bulgaria offers a blend of legal protections and cultural warmth in its employee benefit landscape. While the Bulgarian Labour Code and Social Insurance Code lay out a solid base of mandatory benefits, many employers supplement these with perks that capture the local flavor—whether offering dental insurance to Zagreb expats in Sofia or gym memberships for cycling along the Black Sea. Offering a comprehensive employee benefits package is one of the best ways to attract and retain workers in a competitive hiring landscape in Bulgaria, which is rapidly becoming an Eastern European hub for talented remote workers from around the world.

Here’s an overview of statutory and optional benefits in Bulgaria.

Mandatory benefits in Bulgaria

Mandatory benefits are legally required, meaning employers have to offer them to their employees. Bulgarian law establishes several non-negotiable benefits, which are outlined in the Labour Code and Social Insurance Code:

• Unemployment benefits: Paid unemployment is 60% of the employee’s average salary in the prior 24 months. They can receive benefits for up to 12 months, depending on their circumstances and contribution period.
• Accident insurance: Employers pay into a fund that covers workplace accidents and occupational illnesses.
• Disability pension: Employees are entitled to a pension if they become more than 50% disabled due to disease, a work-related accident, or an occupational illness.
• Lifelong old age and full contribution period pension: Employees receive retirement benefits to cover their living expenses in old age.
• Death and survivors’ pension: Employees are entitled to a one-time cash benefit in case of death and a survivors’ pension. The amount depends on the deceased person's security income and the number of heirs they have.
• Public healthcare: Health insurance contributions are mandatory for all Bulgarians and long-term residents, who receive public healthcare through the state.

Optional benefits in Bulgaria

Beyond the statutory benefits that employers must provide for eligible employees, to compete in sectors like IT or tourism, many Bulgarian employers sweeten the deal with additional perks and fringe benefits, which can help attract top-tier employees.

Here are a few optional benefits you might consider adding to your package to help you stand out in Bulgaria:

• Private health insurance, dental plans, and life insurance: Tax-exempt for employers up to BGN 60 per person per month
• Meal vouchers or food allowances: Usually around BGN 200/month, helping staff enjoy lunch at local shops
• Voluntary pension schemes: Top-ups to the state pension, with contributions typically shared between the employer and the employee
• Gym memberships or wellness credits: Especially appreciated by staff who prioritize healthy lifestyles
• Flexible hours, remote-work allowances, and professional training: Aligned with Bulgaria’s growing digital nomad scene and preference for work-life harmony

While not legally compulsory, these extras signal a commitment to employee well-being and retention, especially valuable in a market now accustomed to richer perks.

Working hours, overtime, and leave in Bulgaria

One of the trickier parts of doing business in Bulgaria is learning how the Labour Code meshes with EU working-time rules. Bulgaria’s Labour Code sets hard limits on daily hours, overtime, and rest, then layers generous family-leave entitlements on top.

Get these right and you’ll keep your locally hired workforce productive and compliant; get them wrong and the General Labour Inspectorate can impose fines or even suspend your local operations in Bulgaria.

Below is the field guide every foreign employer needs before punching the first time card in Bulgaria.

Standard working hours in Bulgaria

A standard workweek in Bulgaria is 40 hours, typically spread over five days, which means eight-hour workdays are standard. In the case of a six-day working week, the duration of the working day before the weekend cannot exceed five hours.

Overtime laws in Bulgaria

In Bulgaria, overtime is generally not allowed under the Labour Law, except in certain scenarios (for example, during emergencies or off-season surges). Overtime doesn’t start at a certain number of hours, but is defined as any work outside of an employee’s typical work hours. Minors are prohibited from working overtime, and adult employees can only work overtime if they agree to it in writing. An employee cannot work more than 150 overtime hours in any calendar year—30 hours per month if it’s during the day, or 20 hours per month if it’s at night.

Employees who work overtime are entitled to overtime pay under the Labour Code:

• 150% of their typical rate of pay for regular overtime
• 175% of their typical rate of pay on weekends
• 200% of their typical rate of pay on public holidays

Collective agreements may stipulate higher rates of overtime pay, but they cannot be lower than these minimums.

Rest period and break laws in Bulgaria

Section III of the Labour Code requires employees to have adequate rest, both during and between work shifts. At a minimum, employers are required to provide:

• Daily rest: At least 12 consecutive hours off between shifts
• Weekly rest: Two consecutive days (48 hours) is the standard, though shift work may compress this to 36 hours when operationally justified
• Meal breaks during shifts: For shifts longer than six hours, a lunch break of at least 30 minutes is obligatory, and most employers allow a full hour for meals

Leave laws in Bulgaria

In addition to the rules around working hours and overtime, the laws in Bulgaria require employers to give their employees several kinds of paid leave, including annual time off, maternity leave, sick leave, and more.

Here are the types of leave employees are entitled to receive in Bulgaria:

• Annual leave: Employees with at least four months of service are entitled to a statutory minimum of 20 days of paid annual leave. Employers can offer more leave, but not less than the minimum.
• Sick leave: The first three days of sick leave are paid by the employer at 70% of the employee’s typical salary. Social security then takes over, and the National Social Security Institute (NSSI) pays 80% of their regular salary (or 90% for work-related illness or injury) for up to 18 months of sick leave at a time.
• Maternity leave: Female employees are entitled to up to 410 days of maternity leave, and if they have at least a year of service, maternity leave is paid. Typically, 45 days must be taken before birth, with the remainder taken after the child is born. After six months of leave, the mother can transfer the remainder to the father if she chooses to. Paid maternity leave is covered at 90% of the employee’s regular salary. At the end of 410 days, the mother can take unpaid maternity leave until the child reaches two years of age. This leave can be utilized for a parent’s first three children only.
• Paternity leave: Fathers who have at least one year of service are entitled to 15 calendar days of paid paternity leave, beginning the day the child is discharged from the hospital. Paternity leave is paid at 90% of the father’s regular salary. An additional two months of paid leave, provided by social security, are available to fathers who have not previously taken paid paternity leave or leave transferred by the child's mother. This leave can be used any time before the child turns eight.
• Parental leave: Once a child turns two years old, up to six months of unpaid parental leave becomes available for use by either parent until the child reaches eight years of age. Each parent may also take up to five months of the other parent’s parental leave, provided that the other parent consents. Parental leave may be used all at once or in installments of at least five working days per leave period.
• Marriage leave: Employees are entitled to two days of paid leave when they get married.
• Bereavement leave: Employees are entitled to two days of paid leave to attend the funeral of a family member.
• Public holidays: Bulgaria observes 12 public holidays. These include:
• New Year’s Day
• Liberation Day
• Good Friday
• Easter Monday
• Labour Day
• St. George’s Day
• Culture & Literacy Day
• Unification Day
• Independence Day
• Christmas Eve
• Christmas Day
• Second Day of Christmas

Work permits in Bulgaria

You’ll need to ensure your candidate can legally work in Bulgaria before they start their new job. Hiring talented workers for your new Bulgarian business is relatively straightforward, but the moment you want to bring in a software tester from Mumbai or a UX designer from São Paulo, you step into the world of Bulgarian migration law.

Since Bulgaria is in the EU, citizens of any EU/EEA country (plus Switzerland) are free to live and work there; everyone else needs some form of work authorization. Below is a primer for employers in Bulgaria to help you learn the ins and outs of employing foreign workers in the country so you can avoid violating the law.

Who needs a work visa in Bulgaria?

In Bulgaria, foreign nationals without permanent residency must apply for a work visa or permit. Here’s what to know as an employer:

• EU/EEA/Swiss Nationals: No visa or permit is required; they simply register their residence with the Migration Directorate within three months of arriving in Bulgaria if they plan to stay long-term.
• Non-EU nationals: Anyone from outside the EU generally needs either:
• A Single Permit and Visa Type D: This is the default route for most employees. The Single Permit is a general work visa, and the Visa Type D gives the worker permission to enter the country.
• An EU Blue Card: This is a fast-tracked immigration route for highly qualified staff earning at least 1.5 times Bulgaria’s average salary.

How long does it take to get a work visa in Bulgaria?

Processing officially takes up to two months for a Single Permit and 30 days for a Blue Card once all paperwork is filed; however, delays are common when the Labour Bureau and the Migration Directorate become backlogged.

Before an application for a Single Permit can be approved, the employer is required to perform a labour market test to show:

• They actively searched for a suitable local candidate to fill the open job role within the past 15 days.
• No Bulgarian/EEA/Swiss nationals or workers residing in Bulgaria long-term were suitable for the job.
• They aren’t able to train any existing personnel for the role.

There are some limited exemptions that allow employers to bypass the labour market test, such as when they hire under an international agreement to which Bulgaria belongs, or when they hire an international guest in a specific profession, such as academics or athletes.

To obtain a Single Permit, the required documents include:

• A copy of the employee’s national ID, such as their passport
• A crime certificate from their country of origin showing a clean criminal record
• Evidence of funds to support themselves in Bulgaria
• Proof of accommodation
• Proof of health insurance
• Proof of education and qualifications for the job

Types of work visas in Bulgaria

Bulgaria offers several types of work visas and permits, including: 

• Single Permit: The typical work visa available for non-EU hires, valid for up to three years, and renewable.
• EU Blue Card: Available for hires with higher salary thresholds in fields like IT, engineering, and finance. Valid for up to four years and renewable, offering mobility within the EU after 18 months.
• ICT Permit: This permit is available for intra-corporate transferees, valid for up to three years.

Termination and redundancy in Bulgaria

When making your first hire in Bulgaria, termination policies might be far from your mind. But if you don’t know the basics about offboarding employees in Bulgaria, you could be setting yourself up for trouble when it’s time to part ways with an employee down the road.

Does at-will employment exist in Bulgaria?

At-will employment is a legal doctrine in which either the employer or the employee can terminate the employment relationship at any time, for any reason (or no reason), and without prior notice, as long as the reason is not illegal (such as discrimination). In Bulgaria, the concept of “at-will” employment, familiar to US employers, does not exist. Whether you’re scaling a fintech team in Plovdiv or downsizing a factory near Varna, dismissals must track the Code to the letter.

The Labour Code lists an exhaustive catalogue of lawful grounds for dismissal (for example, redundancy, lack of qualification, and disciplinary breaches). Any termination without one of these grounds risks reinstatement orders and compensation of up to six months’ salary.

Notice periods in Bulgaria

A notice period is the amount of time an employee or employer is required to give before ending an employment relationship. During this period, the employee continues to work while preparing for their departure, and the employer has time to find a replacement or manage the transition.

In Bulgaria, both employers and employees are required to give a statutory minimum of 30 days’ notice, except during an employee’s probation period. This can be increased (and often is in employment agreements or collective agreements), but it cannot be shortened to less than the minimum.

Severance pay in Bulgaria

Severance pay is compensation provided to an employee when they are laid off, terminated, or leave a company under certain conditions. In Bulgaria, severance pay may be required, but that hinges on the reason for the employee’s departure.

Employees are not entitled to any severance pay when terminated for serious misconduct.

How to terminate employees compliantly in Bulgaria

Ending an employment contract in Bulgaria requires a valid reason, proper notice, and, in most cases, severance pay. Mishandling any step can result in legal trouble. Here’s what to know:

1. Identify lawful grounds. The Labour Code defines these, like redundancy (Article 328) or poor performance (Article 330).
2. Consult the works council or union, if applicable. If you’re doing mass layoffs and have a works council or union, they’ll need to be informed at least 45 days in advance under Bulgarian labor law.
3. Serve written notice. This should state the grounds for termination and its effective date, and must be filed with the National Revenue Agency within seven days.
4. Pay out any owed benefits, such as accrued salary, unused holiday, and mandatory severance, on the employee’s last working day.
5. Issue documents, including an employment record book and an employment certificate needed for unemployment benefits.

Any missteps in this process, such as failing to consult with the union or underestimating severance, can result in reinstatement and fines for each affected employee. If you employ a global workforce, keeping track of termination requirements gets complicated. Without any assistance, employers need to master conflicting just-cause considerations, probationary and notice periods, and severance pay laws that vary both within and among countries. An alternative is to hire through an EOR, which can monitor termination requirements for you, ensuring you compliantly onboard and offboard employees every time.

FAQs about hiring in Bulgaria

Can I hire employees in Bulgaria without my own legal entity?

A global employer of record (EOR) can become the legal employer of your Bulgarian workforce, registering the employment contract with the National Revenue Agency (NRA), calculating payroll taxes, and staying on top of the Labour Code’s reporting duties, while you remain in charge of the employee’s day-to-day work. Using an EOR can be a cost-effective way to dip a toe into hiring in Bulgaria without the months-long process—and cost—of incorporating a local entity. Keep in mind, however, that per-employee EOR fees can start to outweigh the benefits once you scale past a small team.

An EOR like Rippling can help you quickly tap into Bulgaria's talent pool, grow your global workforce, and reduce both compliance risks and administrative workload.

How do I onboard employees in Bulgaria?

A comprehensive onboarding process allows you to build a foundation for a strong working relationship with your international team members. And onboarding begins well in advance of a new hire’s first day, so plan to get started on the administrative tasks like paperwork and background checks early on. Onboarding in Bulgaria starts with a written employment contract that follows the Labour Code’s Article 66 template (job title, place of work, wage, hours, notice period, etc.). The contract must be signed before the employee’s first working day and reported electronically to the NRA within three calendar days. The new hire may begin to work only after the NRA confirmation number is issued.

What is the difference between an independent contractor and an employee in Bulgaria?

Employees work under an employment contract governed by the Labour Code, integrate into the company’s organization, follow internal rules, and receive statutory benefits like paid leave, overtime protection, and employer contributions to the National Social Security Institute. Contractors sign a civil contract under the Obligations and Contracts Act or a service agreement under the Commerce Act. They set their own hours, provide their own tools, and carry the economic risk of the job. If you misclassify an employee as a contractor, it could put your business at risk of penalties, back taxes, and legal trouble, so it’s important to correctly classify your workforce, regardless of where you hire.

How much does it cost to hire an employee in Bulgaria?

Besides gross salary, you’ll need to budget for employment costs like mandatory social security contributions that range from 18.92-19.62% of each employee’s gross earnings. Employers are also responsible for calculating and withholding employees’ contributions and taxes on their behalf.

What are the requirements for work permits in Bulgaria?

Citizens of the EU/EEA and Switzerland can work in Bulgaria without a permit, but they must register with the Migration Directorate if they stay for more than 90 days. Non-EU nationals need:

1. Single Permit for Work and Residence, which is issued by the Employment Agency and the Migration Directorate. The employer must first advertise the role locally for 15 days to ensure that no local candidates are suited for the role.
2. Documents for immigration, including a valid passport, a labour contract draft, proof of qualifications, and a clean criminal record certificate from their home country.
3. A government fee of BGN 600. Processing time can take up to several months, so plan for that as well.

Special routes exist for highly-qualified “EU Blue Card” talent and ICT intra-company transferees. These have their own requirements and timelines.

What is always required when an employer terminates an employee in Bulgaria?

Bulgaria, like most of the EU, does not recognize at-will employment. To end a permanent contract, you must:

• Rely on a lawful ground listed in Articles 328–330 of the Labour Code (e.g., redundancy, poor performance, or misconduct).
• Give 30 days’ written notice unless the contract provides for a longer period. Shorter notice is allowed only by mutual consent or for gross misconduct.
• Pay out any unused annual leave and, where applicable, statutory severance—one month’s salary for redundancy or dismissal due to ill health.

Failure to follow the procedure can result in reinstatement orders or compensation up to the employee’s actual damages.

How does a US company pay a foreign employee in Bulgaria?

There are generally three ways a US company can pay a foreign employee in Bulgaria:

1. Form a local entity and open a local bank account to run payroll according to Bulgarian law (including all relevant withholdings).
2. Partner with an EOR that specializes in global employment and manages salary, insurance, and taxes on your behalf.
3. Use a global payroll service that can integrate payroll for multiple countries.

Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.