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Bulgaria's minimum wage

Bulgaria's payroll

Social security benefits in Bulgaria

Other employee benefits in Bulgaria

Compliant, seamless payroll and benefits in Bulgaria and beyond

Payroll in Bulgaria

Managing payroll in Bulgaria requires a nuanced understanding of local regulations, tax obligations, and employee benefits. Employers must comply with national labour laws and ensure that payroll processes are accurate and timely.

Whether handling payroll internally or outsourcing the function, businesses must stay updated on requirements related to wages, social security, and tax contributions.

Several factors influence payroll calculations in Bulgaria, including:

Tax obligations: Employers must withhold income tax from employees’ wages and submit it to the tax authorities. The tax system in Bulgaria follows a flat rate for personal income tax.
Social security and pension contributions: Businesses must contribute to the pension in Bulgaria, ensuring employees are covered under the national retirement system.
Overtime and bonuses: Additional payments such as overtime wages, performance-based bonuses, and holiday allowances can affect payroll calculations.
Leave and benefits: Employers must account for paid leave, sick leave, and other statutory or supplementary employee benefits in Bulgaria.

Outsourcing payroll in Bulgaria

To simplify compliance and reduce administrative burdens, many companies opt for payroll services in Bulgaria. Third-party providers handle payroll processing, tax filing, and benefits administration, ensuring that all aspects align with local regulations. Outsourcing payroll allows businesses to focus on their core operations while mitigating the risk of compliance errors and financial penalties.

Partnering with a reputable global payroll provider like CXC ensures that all tax and social security obligations are met, salaries are processed accurately, and companies remain compliant with Bulgaria’s payroll laws.

Bulgaria's minimum wage

As of 1 January 2026, Bulgaria’s national minimum wage is BGN 1,213 per month, and the minimum hourly wage is BGN 7.31 (for a normal working time of 8 hours/day and a 5-day work week). This rate is mandatory, meaning no employee in Bulgaria should be paid below this threshold. Employers who fail to comply with Bulgarian labour legislation may face administrative sanctions (including pecuniary penalties/fines under the Labour Code, commonly cited in the range of BGN 1,500 to BGN 15,000, with higher ranges for repeat violations, depending on the specific breach).

Given a standard 40-hour workweek, the hourly minimum can be applied directly using the statutory BGN 7.31 figure, while monthly pay structures typically follow the statutory monthly minimum. Wage structures can still vary due to collective agreements and sector-specific rules, but they cannot undercut the statutory floor. Employers should also consider the minimum wage after taxes, as social security contributions and personal income tax affect employees’ take-home pay, meaning the net minimum will vary based on applicable deductions.

Minimum wage updates in Bulgaria follow a legally defined setting mechanism. In particular, the Labour Code mechanism introduced in recent years ties the minimum wage for the following year to a formula (set by 1 September of the current year) based on 50% of the average gross wage over a defined 12-month reference period.

For reference, before the January 2026 increase, the national minimum wage was BGN 1,077 per month (effective 1 January 2025).

By staying informed about the monthly minimum wage in Bulgaria and its legal framework, employers can maintain fair compensation practices and reduce compliance risk.

Bulgaria's payroll

Managing payroll in Bulgaria requires a solid understanding of local regulations to ensure compliance with tax laws and employee benefits. Employers must adhere to specific payroll cycles, tax obligations, and compensation structures to maintain smooth operations and avoid penalties.

Payroll cycle in Bulgaria

The standard payroll cycle in Bulgaria operates on a monthly basis, with salaries typically paid on the last working day of the month. Employers must ensure timely payments to comply with labour regulations and maintain employee satisfaction. In some cases, collective agreements or employment contracts may specify alternative payment schedules.

Payroll taxes in Bulgaria

Employers are required to deduct and contribute payroll taxes in Bulgaria, which covers social security, health insurance, and income tax. Contributions are split between employees and employers, with employers generally contributing around 18.92% and employees contributing 13.78% of gross salaries.

Income tax in Bulgaria is levied at a flat rate of 10% on employees’ taxable income. Employers are responsible for withholding this amount from employees’ wages and remitting it to the National Revenue Agency (NRA). Social security and health insurance contributions are also mandatory, covering pensions, unemployment benefits, sickness benefits, and healthcare services.

Certain tax exemptions and deductions may apply depending on an employee’s specific situation, such as tax relief for dependents or other eligible expenses. Employers must ensure accurate tax calculations and timely submissions to avoid penalties, which can include financial fines and legal repercussions for non-compliance.

13th-month salary in Bulgaria

Unlike some European countries, Bulgaria does not have a legal requirement for a 13th-month salary. However, some employers may offer performance-based bonuses, end-of-year incentives, or profit-sharing schemes to reward employees and boost motivation. These additional payments are subject to the same tax and social security contributions as regular salaries.

Employers in Bulgaria must comply with mandatory social security and health insurance obligations to ensure employees receive essential benefits. These contributions provide financial security for employees in cases of illness, retirement, and unemployment.

Understanding how these benefits work is crucial for businesses operating in Bulgaria to maintain compliance and support their workforce effectively.

What is national insurance in Bulgaria?

National insurance in Bulgaria includes both social security and health insurance contributions. Employers are responsible for deducting and paying these contributions on behalf of their employees as per the Social Security Code (SSC). Contributions are calculated based on an employee’s gross salary, within the minimum and maximum thresholds defined by law.

The total national insurance contribution rate ranges between 32.7% and 33.4%, split between the employer and employee. Employers contribute 18.92% to 19.62%, while employees cover 13.78%. These contributions fund pensions, sickness benefits, maternity leave, unemployment support, and healthcare services, ensuring employees receive essential protection during their careers and retirement.

Social security contributions in Bulgaria

Bulgaria mandates social security contributions for all employed individuals. These contributions cover several key benefits, including:

Pension insurance: This provides retirement income.
Unemployment insurance: This supports workers who lose their jobs.
Sickness and maternity benefits: This ensures income protection during medical leave.

Employers are required to contribute between 14.12% and 14.82% toward social security, while employees contribute 10.58%. These funds are collected by the National Revenue Agency (NRA), ensuring employees are covered under Bulgaria’s statutory benefit system.

For international employers, compliance with Bulgarian social security contributions is crucial when hiring local employees or EU/EEA nationals subject to Bulgarian social security regulations. Failing to meet these obligations can lead to fines and legal penalties.

Employee health insurance in Bulgaria

Health insurance in Bulgaria is compulsory, and both employers and employees contribute to the system. The total health insurance contribution is 8% of an employee’s gross salary, divided as follows:

4.8% paid by the employer.
3.2% paid by the employee.

These contributions grant employees access to Bulgaria’s public healthcare system, which provides medical care, hospital treatment, and preventive health services. While public healthcare covers essential services, some employers offer additional private health insurance to attract and retain top talent.

Employers should regularly monitor legislative updates regarding Bulgarian social security tax rates and benefit contributions to avoid compliance risks.

Other employee benefits in Bulgaria

Beyond statutory benefits, many employers in Bulgaria offer additional perks to attract and retain talent. These employee benefits in Bulgaria range from supplementary pensions and health insurance to flexible working arrangements and relocation assistance. Understanding these benefits can help businesses enhance their compensation packages and improve employee satisfaction.

Supplementary pension plan in Bulgaria

Some large employers collaborate with licensed insurance companies to offer private retirement plans. These plans allow employees to accumulate additional pension savings beyond the state pension system, providing greater financial stability in retirement.

Supplementary health and life insurance in Bulgaria

Many businesses offer extended health insurance plans that grant employees access to private medical facilities, specialist examinations, and faster medical services. Additionally, life insurance coverage is sometimes included to provide financial protection for employees’ families in the event of unforeseen circumstances.

Monetary bonuses in Bulgaria

Financial incentives play a significant role in employee motivation. Some common monetary benefits include cash bonuses, referral bonuses, and annual or holiday bonuses.

Transport allowance in Bulgaria

To ease commuting costs, some companies provide workplace transport, reimburse public transportation expenses, or offer fuel allowances for employees who drive.

Telephone and internet allowance in Bulgaria

Employers may cover mobile phone bills, provide company-paid internet for remote workers, or offer work devices like laptops and tablets.

Additional paid leave in Bulgaria

While the legal minimum is 20 days per year, many companies offer extra leave based on years of service, seniority, or company policies.

Flexibility in working hours in Bulgaria

Many IT and outsourcing firms embrace remote or hybrid work models, giving employees the freedom to manage their schedules while maintaining productivity.

Additional parental leave in Bulgaria

Beyond the legally required parental leave, some companies provide extended paid leave, flexible return-to-work options, or additional support for new parents.

Paid study leave in Bulgaria

Companies that value employee growth may grant paid time off for professional courses, certifications, or skill development programs.

Sport and wellness allowances in Bulgaria

Multisport cards, gym memberships, and wellness stipends are popular rewards that promote a healthy lifestyle among employees.

Relocation in Bulgaria

To attract talent from different regions, some companies assist with relocation costs, provide temporary housing, or offer support in finding accommodation for new hires.

Compliant, seamless payroll and benefits in Bulgaria and beyond

Getting payroll and benefits right is not just a legal issue. Every country also has its own customs, norms, and expectations about employee compensation. And if your operations are not in line with your workers’ expectations, they may not stick around for long.

Thankfully, we know what we are doing. When you work with CXC to engage workers in Bulgaria, we’ll handle everything from tax withholding to employee bonuses on your behalf.
Want to find out more?

FAQ's

How do companies run payroll in Bulgaria?

Companies usually run payroll in Bulgaria on a monthly cycle, calculating gross pay, employee deductions, employer contributions and the employee’s net salary before making the required payments and filings. Bulgaria payroll also needs to reflect contractual pay, overtime, bonuses, paid leave, sick leave and any taxable benefits that affect monthly remuneration.

Since Bulgaria adopted the euro on 1 January 2026, payroll calculations, payments and statutory reporting are administered in euros. Employment and historical payroll data converted from Bulgarian lev must use the fixed conversion rate of EUR 1 to BGN 1.95583 and comply with the applicable rounding rules. The employer withholds personal income tax and the employee shares social and health insurance, while also accounting for its own statutory contributions. Payroll records must match employment data reported to the Bulgarian authorities, and salary payments need to follow the timing set by the employment contract or internal pay arrangements.

For standard employees subject to Bulgarian social security, payroll generally deducts employee contributions of 13.78% of insurable remuneration. The 10% personal income tax is then calculated on the taxable employment income after deducting the employee’s mandatory contributions and any applicable tax relief.

Employers normally submit the required monthly social-security declarations and remit withheld tax and contributions by the statutory deadline, generally the 25th day of the following month. Payroll should also support any applicable annual employer tax reconciliation and employee-income reporting.

Accurate payroll in Bulgaria depends on more than producing a payslip. The underlying employment, tax and social-insurance records need to remain consistent each month.

A reliable payroll process connects pay calculations, statutory deductions and reporting so that employees receive the correct amount and employer records remain aligned.

How do you set up payroll in Bulgaria?

Setting up payroll in Bulgaria starts with establishing the employer’s legal basis for employing staff and completing the registrations needed for tax and social-insurance reporting. Payroll data then needs to capture each employee’s contract terms, working time, remuneration, bank details, tax information and applicable insurance status.

The payroll process must distinguish the basic salary in Bulgaria from overtime, bonuses, allowances, benefits and other payments that may receive different treatment. Employers also need a method for recording leave, sickness, new starters, contract changes and terminations before each monthly cut-off.

Whether payroll is handled internally or by an external provider, the system needs to produce compliant calculations, payment instructions, payslips and statutory reports while maintaining an auditable record of changes.

Payroll data must also remain consistent with the employee’s written employment agreement and Unified Electronic Employment Record. Reportable employment changes generally must be entered in the NRA Employment Register within three days, while termination is generally recorded within seven days. Good set-up work makes later processing much easier: payroll in Bulgaria is most dependable when employee data, employment documentation and reporting responsibilities are connected from the start.

Do you need a legal entity to run payroll in Bulgaria?

No. A foreign company can run payroll in Bulgaria without setting up a Bulgarian legal entity, provided it has a compliant way to employ and pay workers locally.

One option is to register with the relevant Bulgarian authorities as a foreign employer and take responsibility for local payroll, tax and social security obligations.

Another option is an Employer of Record (EOR). The EOR becomes the legal employer in Bulgaria and manages payroll, tax withholding, social security contributions, payslips and required filings on the company’s behalf.

Companies that already have a Bulgarian entity can also employ workers and operate payroll through that entity.

In summary, a Bulgarian entity is not mandatory for every hire. Businesses can use their own entity, an eligible foreign-employer arrangement or an EOR to manage payroll in Bulgaria.

What payroll taxes must employers pay in Bulgaria

Bulgarian employers pay mandatory social security and health insurance contributions on top of an employee’s gross salary. For most employees, the employer contribution is generally around 18.92% to 19.62% of insurable earnings.

This includes 14.12% to 14.82% for social insurance, covering areas such as pensions, sickness and maternity, and unemployment, plus 4.8% for health insurance The social-insurance percentage already includes the employer-funded occupational accident and disease contribution of approximately 0.4% to 1.1%, which varies according to the employer’s economic activity. It should not be added a second time to the 18.92%–19.62% total.Employees pay their own share of social security and health insurance through payroll.

Employers calculate and withhold these amounts from salary, along with Bulgaria’s 10% personal income tax, and remit them to the relevant authorities. The standard employee contribution is generally 13.78% of insurable remuneration, comprising 10.58% in social-security contributions and 3.2% in health-insurance contributions. The exact allocation can vary with the employee’s birth year, insurance category and applicable pension arrangements.

Social security contributions are calculated within Bulgaria’s applicable minimum and maximum insurable-income limits. In summary, employer payroll costs include gross salary plus approximately 18.92% to 19.62% in mandatory employer contributions, while employee contributions and income tax are deducted from the employee’s pay.

What employee benefits must employers provide in Bulgaria?

Employees in Bulgaria are entitled to statutory benefits including paid annual leave, public holidays, sick leave, maternity and parental leave, and social security and health insurance coverage.

The main employee benefits in Bulgaria include:

Annual leave: At least 20 working days per year for a standard five-day working week.

Public holidays: Paid time off on Bulgaria’s official public holidays, subject to the applicable working arrangements.

Sick leave: Eligible employees receive paid sick leave, with payment shared between the employer and Bulgaria’s social security system under the applicable rules.

Maternity and parental benefits: Eligible employees have statutory leave and social security benefits for pregnancy, childbirth and childcare.

Social security: Mandatory coverage includes pensions, unemployment, sickness, maternity and workplace accidents.

Health insurance: Employers and employees make mandatory health insurance contributions through payroll.

Employers may also offer additional benefits such as meal vouchers, private health insurance, bonuses or extra annual leave.

When does it make sense to outsource payroll in Bulgaria?

Outsourcing payroll can make sense when a company has Bulgarian employees but lacks local payroll expertise, or when its internal team is managing several countries with different tax, social-insurance and reporting rules. It can also reduce administrative pressure as headcount; variable pay or benefit arrangements become more complex.

External support is particularly relevant where Bulgaria payroll involves frequent joiners and leavers, cross-border employees, bonuses, multiple benefit types or tight reporting deadlines. The provider can supply local processing expertise while the employer retains responsibility for accurate employee data and timely approval of payroll inputs.

The financial case depends on headcount, internal capability and service scope. Even for a small workforce, outsourcing can be valuable where maintaining local expertise and payroll continuity internally would require disproportionate time or resources. The strongest case for outsourced payroll in Bulgaria arises when specialist compliance knowledge and dependable monthly administration outweigh the value of building and maintaining the same capability internally.

What does payroll administration cost in Bulgaria?

Payroll administration in Bulgaria typically costs around €10 to €30 per employee per month for basic payroll processing, while managed payroll services can cost around €30 to €80 or more per employee per month.

The price varies based on employee numbers and what the provider handles. Basic services may cover salary calculations, payslips, tax and social security deductions, while a managed service may also include statutory filings, benefits administration, employee queries, onboarding and final payroll.

Some providers also charge a minimum monthly fee, particularly for companies with only a few employees. These fees are separate from the employee’s salary and mandatory employer social security and health insurance contributions. In summary, businesses can expect basic payroll in Bulgaria to start at around €10 to €30 per employee per month, with higher fees for fully managed payroll and additional HR support.

What is the minimum wage in Bulgaria?

Thenational minimum monthly wage in Bulgaria is 620.20 EUR gross for a full working month. The minimum hourly rate is 3.74 EUR for normal working time of eight hours per day and a five-day working week. The official decree also records the fixed-conversion equivalents of BGN 1,213 and BGN 7.31. These rates have applied since 1 January 2026. Bulgaria adopted the euro on the same date, so current employment contracts and payroll should use the euro amounts rather than treating the BGN equivalents as the operative currency.

The minimum wage in Bulgaria applies as the national wage floor, although higher rates can arise from employment contracts, collective agreements or sector-specific arrangements. It also affects payroll calculations and can interact with minimum insurable-income rules.

The monthly figure relates to a full working month, so part-time pay requires calculation against the employee’s working time and applicable hourly requirements rather than simply using the full monthly amount.

The basic salary in Bulgaria cannot lawfully fall below the applicable statutory floor for the employee’s working arrangement, making the current minimum rate a core payroll control. The minimum wage should not be confused with minimum insurable income. Different insurance thresholds can apply according to the employee’s economic activity, occupation and statutory category. Payroll must satisfy both the wage floor and the applicable contribution-base rules.

Because the minimum wage can be changed by government decree, the EUR 620.20 monthly and EUR 3.74 hourly figures should be rechecked before use in any payroll period beginning in 2027.

What should companies look for in a payroll provider in Bulgaria?

Companies should look for a payroll provider in Bulgaria with strong local expertise, accurate payroll processing and experience managing Bulgarian tax and social security requirements.

The provider should handle monthly salary calculations, payslips, income tax, social security and health insurance contributions, as well as the required payroll filings and deadlines. It should also be able to manage bonuses, benefits, leave, salary changes and final pay correctly.

For international companies, experience managing payroll across multiple countries is also useful. This gives HR and finance teams more consistent reporting while keeping payroll in Bulgaria compliant with local requirements.

Cross-border capability is particularly valuable where employees have A1 certificates, work temporarily in another country, receive equity or foreign benefits, or require coordination between Bulgarian payroll and a global compensation system. Service quality is important too. Employers should know who handles payroll questions, how corrections are managed and what support is available when employee information changes.

How can CXC help companies manage payroll compliance in Bulgaria?

CXC manages payroll compliance in Bulgaria through our Employer of Record service, taking responsibility for local payroll, tax, social security contributions, statutory benefits and required filings as the legal employer.

CXC calculates employee salaries, withholds Bulgaria’s 10% personal income tax, manages employer and employee social security and health insurance contributions, issues payslips and completes the required payroll reporting. We also manage payroll changes related to bonuses, leave, salary adjustments and final pay.

With more than 30 years of workforce management experience, CXC supports companies that need to hire and pay employees in Bulgaria and 100+ countries without building their own local employment and payroll operation.

Our EOR service also connects payroll with employment contracts, benefits, onboarding, HR administration and offboarding.

Speak to our team about managing payroll and employees in Bulgaria through CXC’s Employer of Record service.

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