How to hire in Bulgaria through an EOR

Employment contracts in Bulgaria must be in writing. You'll need to give the employee a signed copy before their first day.

Contract types

Most companies go with indefinite-term contracts. They're the default, they're stable, and they save you from fixed-term renewal rules that can flip a contract to indefinite status anyway.

Fixed-term contracts work for short-term needs, but keep an eye on renewals. If the person keeps working past the end date, the contract automatically becomes indefinite.

What has to be in the contract

Bulgarian law is specific about what every employment contract needs to include. Missing something creates real risk of disputes or invalidity.

• Place of work.
• Position and exact duties.
• Start date and contract date.
• Term (indefinite or fixed).
• Paid leave amounts (basic, extended, additional).
• Equal notice period for both sides.
• Gross monthly pay, fixed bonuses, payment schedule.
• Work day or week length.

The law doesn't specify a language, but Bulgarian is standard for local hires. English is fine for expats if both parties agree. Any changes need to be made in writing within one month.

Probation periods can be up to 6 months and are allowed in any contract type. During probation, either side can end the contract with just 3 days' notice and no reason required. After that, full termination rules kick in.

Contractor vs. employee

Misclassification is a serious risk. Courts look at how the working relationship actually operates, not what you've written on the contract.

The legal test comes down to this: employees receive direction on how to work, follow fixed hours, use employer-provided tools, and carry no business risk. Contractors set their own methods, take on their own risk, use their own equipment, and deliver defined outputs. Civil contracts (used for specific tasks) don't require social insurance, fixed hours, or leave. Employment contracts trigger full legal protections and must be registered with the revenue agency within 3 days.

If you misclassify someone, the worker can claim reclassification as an employee. You'd owe back taxes, social and health contributions (employer share is roughly 18-20% of gross), paid leave, and notice pay. Fines can reach BGN 5,000 per violation, and you could also face damages claims for unfair dismissal. Tax audits on unreported payroll tend to be thorough.

Non-compete clauses are enforceable if the employee is compensated (25-100% of prior salary during the restriction period), the scope and duration are reasonable, and there's a legitimate business interest to protect. No compensation means the clause won't hold up.

On IP: anything an employee creates as part of their job duties belongs to you automatically. If you want broader rights than that, you'll need explicit contract terms. Contractors keep ownership of their work unless it's assigned to you in writing.

Bulgaria sets the minimum at 20 paid days off per year, but most competitive employers offer 25 or more. If you're hiring skilled workers, especially in tech or Sofia, you'll likely need to go beyond the legal minimum.

Employees become eligible for annual leave after four to eight months on the job. Leave accrues based on service length and can't be paid out in cash unless the employment ends. Unused days carry over for up to two years, but employers need to schedule them within the next calendar year or within six months after the original year ends. If you don't, employees can choose their own dates with 14 days' written notice.

Public holidays sit outside annual leave entirely. If someone works on a public holiday, they're entitled to extra pay or time off in lieu. Here are the standard public holidays in Bulgaria:

All leave types

Bulgarian law protects employees' jobs and pay during major life events. Here's how each leave type works:

Social security covers most family-related leave payments. You'll handle the claims to NSSI on your employee's behalf. Job protection means they return to the same role when they come back.

Mandatory benefits

You're required to withhold and pay social security contributions covering pension, health, and unemployment. The total rate is around 32-33% of gross salary. As the employer, you cover roughly two-thirds of that (18-20%), and the employee covers the rest (10-13%).

Breakdown for 2025:

Rates adjust each year, so check NSSI directly for 2026 figures. There's no legal requirement for meal vouchers or transport allowances, though some sectors have collective agreements that include them. Private health insurance isn't required by law either.

What people actually expect

Legal minimums won't get you far with skilled candidates, particularly in tech or Sofia. Most employees expect 25-30 days of annual leave. Private health insurance covering dental and specialists is also common, partly because public healthcare wait times can be long.

Remote work stipends typically run 100-300 BGN per month for home office costs. Meal vouchers around 300 BGN per month are widely offered and tax-free. Gym memberships or multi-sport cards have become a fairly standard part of the package too.

If you offer only the legal minimums, expect hiring to take longer. Strong candidates compare total packages, not just salary. Offering 25 days of leave, private health cover, and meal vouchers puts you in line with what the local market looks like. Your EOR can help you benchmark against what similar companies are offering.

Terminating an employee in Bulgaria requires a valid legal reason and careful process. Get it wrong and you're looking at court claims, back pay, and fines. Bulgarian law leans toward employees, so document everything as you go.

Employers can only terminate on specific grounds set out in the Labor Code: poor performance, disciplinary issues, company closure, staff reductions, or a drop in workload. Employees can resign at any time with notice and don't need to give a reason. Resigning without notice is only allowed in limited cases, like unpaid wages or retirement eligibility.

Unfair dismissal applies when you don't have a valid ground or skip required steps, like providing written notice that states the reason. Certain employees have extra protections: pregnant women, parents on parental leave, employees with serious illnesses, union reps, and works council members. To dismiss them, you'll need Labour Inspectorate approval and, in some cases, a medical opinion. Courts tend to side with employees when procedures aren't followed correctly.

Notice periods

For indefinite contracts, notice periods work both ways: the minimum is 30 days, and it can go up to 3 months if your contract specifies that. Fixed-term contracts use 3 months or the remaining term, whichever is shorter. Non-EU/EEA/Swiss nationals are always on fixed-term contracts, so the 3-month rule applies to them. If either side skips notice, they owe the other their full gross salary for that period.

Severance pay

Severance isn't always required in Bulgaria. For redundancies (closure, downsizing, or reduced workload), you owe a maximum of one month's gross salary. If you're proposing mutual termination, you need to offer at least four months' gross salary, and the employee has 7 days to accept in writing.

Employees who are retirement-eligible get two months' pay on any legal termination, or six months if they've worked at least 10 of the last 20 years with you. Calculate everything based on the employee's last gross monthly salary. If an employee resigns, there's no severance unless the contract says otherwise. Unused leave always gets paid out on exit.

Use the employee's last gross monthly salary before termination as your base. Prorate for partial months. For mutual agreement terminations, payment is due within 7 days.

Work permits and visas

You can hire foreign nationals through an EOR, but they'll need a work permit from the Employment Agency. EORs typically handle sponsorship as the legal employer of record. EU/EEA/Swiss citizens can work freely on either indefinite or fixed-term contracts. Non-EU nationals need permits, which are tied to fixed-term contracts.

The most common route for employees is a single permit that combines work and residence. Other categories include seasonal worker visas (up to 9 months), intra-company transfers, and researcher visas. You'll need a job offer, proof of qualifications, and a labor market test showing the Employment Agency that no suitable local candidates were available. Permit approval typically takes 1-2 months, plus additional time for a visa if the employee is applying from outside Bulgaria. Bulgaria doesn't have a digital nomad visa. Permits need to be renewed annually or in line with the contract term.

In practice, the EOR applies for the permit, the employee applies for a D-type visa at their local embassy if needed, and then registers their residence on arrival. Expect costs of around 500-1000 BGN. Incomplete documents are the most common cause of delays.

Compliance pitfalls and other risks

Bulgaria is strict on process, not just outcomes. Always provide written notice that cites the exact legal ground for termination. For redundancies or protected employees, you'll also need to notify the relevant authorities. Errors can result in back pay, damages, or reinstatement orders from the courts.

Data protection follows GDPR. You'll need employee consent for processing personal data, and if you're growing, you may need to appoint a Data Protection Officer. Fines for breaches can reach 4% of global annual turnover.

Trade unions and collective agreements are common in larger companies. They can't override the law, but they can set better terms on pay or notice periods. It's worth checking whether your hire is covered by one. EORs operating locally will usually know which agreements apply.

One upcoming admin change to note: by June 1, 2026, employers must return all paper employment books to employees, either on termination or before that date. Records are moving to a digital system. There haven't been major overhauls to termination rules in 2024-2026, but keep an eye on State Budget updates through March 2026 for potential social security changes. Some rules from 2025 have carried over due to political delays.