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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
The government sets Bulgaria’s minimum wage to protect workers and establish a baseline for salaries across industries.
As of January 1, 2025, the country’s national minimum wage is BGN 1,077.00 per month. This rate is mandatory, meaning no employee in Bulgaria should be paid below this threshold. Employers who fail to comply with Bulgaria’s minimum wage law may face legal penalties and fines imposed by the government.
In Bulgaria, the minimum wage per hour depends on the official workweek duration. Given a standard 40-hour workweek, the minimum hourly wage can be calculated by dividing the monthly rate accordingly. However, wage structures can vary depending on collective agreements and industry-specific regulations.
Employers in Bulgaria should also consider the minimum wage after taxes, as social security contributions and income taxes affect employees’ take-home pay. The country’s minimum wage net amount varies based on tax brackets and deductions, impacting overall earnings.
Minimum wage increase in Bulgaria is typically determined by the government based on economic factors, inflation rates, and labour market trends. Regular revisions ensure wages keep pace with living costs while balancing employer sustainability. For reference, before the January 2025 increase, the country’s minimum wage was set at BGN 933 per month.
When analysing the economic landscape, employers should also take into account Bulgaria’s unemployment rate, as it can influence wage expectations and labour market conditions. A competitive salary strategy helps attract and retain top talent while ensuring compliance with statutory requirements.
By staying informed about the monthly minimum wage in Bulgaria and its regulatory framework, employers can maintain fair compensation practices and avoid potential legal repercussions.
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.
Social security benefits in Bulgaria
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.
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