Employer of record in Bulgaria: costs, rules and how to hire

Conclude a written employment contract before work begins, recording the employer and employee, the workplace, the job and duties, the start date, the duration, leave, equal notice periods, basic and permanent supplementary pay, the pay frequency and the hours. Then give the employee the signed contract and the required registered-employment record before admitting them to work, because possession of those documents is the condition rather than the paperwork being filed somewhere.

Put the employment terms in writing

Under the electronic employment-register rules effective from 1 June 2025, the employer must register contract conclusion or amendment within three days and termination within seven days. The worker must receive the required certified registration copy before starting work, so that three-day filing window is not permission to start without the documents.

Agency placements add a document and a deadline. Before an agency employee starts with the client, the agency must issue the required written assignment order and provide the employment documents, with the order identifying the client, the workplace, the job, the reporting contact, the start and the other required conditions, given at least one working day before the assignment begins.

Use documents the employee can understand and explain the employer, the client and the reporting relationship. Check the job description, the workplace, the hours, the pay dates, leave, equipment, confidentiality and ownership of work, and confirm how any intellectual-property rights pass through the employer to your business rather than relying on the commercial label.

Probation and fixed-term work

A trial period can be up to six months, but where the agreed employment term is shorter than one year it can be no longer than one month, which is the limit most often missed. State which party benefits from the clause, because if that is unstated it benefits both, and a benefiting party can end the contract without notice before the trial expires. Statutory leave and other qualifying absences do not count toward the trial, and it cannot be repeated for the same work with the same person at the enterprise.

A calendar fixed term is generally limited to three years unless legislation provides otherwise. Ordinary fixed-term use is restricted to temporary, seasonal or short-term work and specified cases, while exceptional use for ongoing work carries additional justification, duration and renewal limits, and other routes cover defined work or an absent employee's replacement. Agency contracts have their own narrower permitted grounds again.

Remote work and availability

Remote work is voluntary and its practical conditions must be agreed in the employment terms. Record the approved locations, the hours, the reporting, the equipment, internet, maintenance and data protection. The employer normally provides the required equipment and support at its expense, employee-owned equipment needs an agreement, and health, safety, working-time and privacy duties continue throughout.

Employees are not generally obliged to answer employer-initiated communications during daily or weekly rest, though the law allows agreed conditions in individual or collective terms for when contact is permitted. Plan availability and any on-call work inside the working-time and rest rules rather than around them.

Record the approved work locations and the process for requesting a change, and assess a move to another country before approving it, because working remotely from abroad can change payroll, employment and immigration obligations. Agree how working time, expenses, incidents and equipment return will be documented.

Contractor or PEO alternatives

A payroll processor can administer payments without becoming the employer, and a PEO label does not determine the Bulgarian employment arrangement either. For independent services, assess the actual control, integration and working relationship before using a contractor contract, and review any restrictive covenants for the role rather than assuming a foreign template is enforceable here.

Misclassification risk, and what our sources do and do not cover

The principle is the same here as everywhere on this site: an arrangement is judged on how it actually operates, and a civil contract for a person who works as an employee does not change what the relationship is. I want to be straight that I have not read the Bulgarian classification test from a government source in this pass, so I am not going to set out criteria or a penalty figure as though I had.

What our approved Bulgarian sources do cover is the adjacent obligation, and it is worth knowing because it is where a hirer's exposure usually shows up first. A written employment contract has to be concluded before work begins, recording the employer and employee, the workplace, the job and duties, the start date and duration, leave, equal notice periods, basic and permanent supplementary pay, the pay frequency and the hours, and the employee has to be given the signed contract and the registered-employment record before being admitted to work. Source: the approved Bulgarian written-contract guidance, Labour Code via mlsp.government.bg, checked 18 September 2026.

Read that as the practical test. If the person is doing a job with a workplace, duties, hours and notice, Bulgarian law expects a registered employment contract covering exactly those things, and an arrangement with none of it is the pattern an inspection will find. So decide the status before the start, and where the answer is employment, get the contract registered in the order set out above.

On the consequence I can now be specific, and it is not a fine, it is a decision that makes the employment exist. Where it is established that labour is provided in breach of the rule that an employment relationship arises whenever work is performed under an employer's conditions, the existence of the employment relationship is declared by an order issued by the control bodies of the labour inspectorate, the order fixes the date on which the relationship arose, and the existence of the relationship may be established by any means of evidence. The relations between the parties up to that order are then settled as under a valid employment contract where the worker acted in good faith on starting work, and the inspectorate directs the employer to offer the worker an employment contract from the date the order fixes. Source: Labour Code articles 1 (2) and 405a, consolidated text published by the Ministry of Labour and Social Policy on mlsp.government.bg, archived capture 13 September 2026.

Read the back-dating, because that is the expensive part rather than any penalty. The inspectorate picks the start date, the period before the order is treated as employment, and the contributions, leave and notice entitlements for that period follow from it. An arrangement that has run for two years is not a two-week problem to fix.

Two entries below are about documents reaching the employee before the first day, and two are about 2026 figures that changed mid-year. Both categories produce problems that are cheap to avoid and awkward to fix.

Check these points before signing

Ask the provider to answer each of these against the actual role, client and person.

• Agency restrictions: confirm the permitted temporary-work ground, client headcount limit and provider registration.
• Actual employer costs: the normal percentage applies to an insurance base with a ceiling, not every euro of a higher salary.
• August changes: use the €2,300 ceiling and the correct activity-code accident rate for current payroll.
• Experience pay: recognise qualifying service and show the supplement alongside basic salary.
• Starting documents: do not let someone start merely because the three-day registration deadline has not expired.
• Short fixed terms: a contract shorter than one year has a maximum one-month trial, not six months.
• Exits: notice, the lawful ground and any compensation must be assessed separately.

Then ask who approves salary changes, records hours, handles leave, supplies workplace-safety information and speaks to the employee, and keep that responsibility map consistent across the employment contract and the client agreement.

Pay frequency and payslips

The Labour Code's default is two payments each month, an advance and a final payment, unless another arrangement is agreed, so a monthly payroll cycle has to be recorded in the employment terms rather than assumed. Specify the pay date and method, and apply the mandatory bank-payment rules where the employer falls within their scope.

Give the employee a clear breakdown of basic pay, experience pay, other additions, employee contributions, income tax and net pay, and agree payroll cut-offs for variable pay, leave and expense information.

Two things make Bulgarian payroll unusual: the contribution base is capped, and income tax is a flat 10%. Together they mean the employer's cost curve flattens on a professional salary while the employee's take-home stays predictable.

Employer charges and employee deductions

For ordinary third-category employees, the combined employer social and health contribution is generally 18.92% to 19.62% of the applicable insurable earnings, including the employer-only accident rate, subject to the contribution ceiling and the minimum insurable-income rules. Higher-risk work categories and special insurance arrangements differ, and none of this is a percentage of uncapped salary or an all-in EOR fee.

For the same ordinary employee, the combined employee social and health contribution is generally 13.78% of the applicable insurable earnings, subject to the ceiling and individual rules, deducted from gross salary rather than added to the employer's budget.

The ceiling is the number to diarise, because it moved mid-year. The monthly maximum insurable income is €2,300 from 1 August to 31 December 2026, having been €2,111.64 from January through July. Minimum insurable bases depend on the employer's economic activity and occupational group, with special rules for partial periods and multiple jobs, and the ceiling limits the insurance base rather than the employee's contractual salary.

The employer alone funds the accident and occupational-disease contribution, ranging from 0.4% to 1.1% according to the enterprise's main economic activity, and seven activity-code rates changed from 1 August 2026, with code 82 for administrative office and business support moving from 0.4% to 0.5%. Use the actual classification of the employing business rather than the employee's office-job title.

The ordinary combined contributions cover the relevant pension, sickness and maternity, unemployment, accident and health-insurance components, and birth cohort and pension choices can change how the pension contributions are allocated. Ask payroll to confirm the actual category and component calculation rather than applying a generic percentage to every worker.

Income-tax withholding

Employment income is generally subject to 10% flat personal income tax on the monthly taxable base after the mandatory employee social and health contributions, withheld and remitted by the employer. Taxable benefits, reliefs, residency and cross-border circumstances can change the actual calculation.

Keep gross salary, employee withholding and employer costs separate in both the quote and the payroll records. Benefits and cross-border work need their own tax treatment, and a provider's service fee replaces no statutory payroll duty.

State pension conditions

For ordinary full-service retirement in 2026, women generally need age sixty-two years and six months plus thirty-six years and ten months of insurance, while men need sixty-four years and nine months plus thirty-nine years and ten months, with different rules for incomplete service and for early or special-category pensions. Pension entitlement is not an automatic end date for employment.

Explain statutory insurance and any optional pension top-up separately. A pension-age milestone can affect an exit assessment and the compensation, but it does not make an employment contract automatically expire.

From 1 January 2026 the national minimum is €620.20 for a full working month, or €3.74 an hour, on the normal eight-hour, five-day schedule, with the decree also stating the former lev equivalents of BGN 1,213 and BGN 7.31. Check the required supplements and any higher binding terms separately, because at least one of those supplements is mandatory rather than negotiable.

Set basic pay and recognise experience

The minimum seniority and professional-experience supplement is 0.6% of contractual basic salary for each recognised year, with entitlement starting after at least one recognised year. Qualifying previous work in the same, similar or equivalent occupation can count, the applicable collective agreement or employer rules determine recognition within the ordinance, and a higher agreed rate remains relevant.

Worked through, at the minimum 0.6% and five recognised years the experience supplement is 3% of basic salary. Establish the recognised years and any higher applicable rate before calculating gross pay, rather than treating it as something to settle after the offer.

Gross pay includes basic salary, the required supplements and any other pay agreed under the applicable rules, so check the contract, the collective agreement and the employer pay rules for bonuses and additional payments. Do not confuse the mandatory recognised-experience supplement with a discretionary bonus, and do not add a thirteenth salary without an applicable entitlement.

Use the salary statistic for the right purpose

The National Statistical Institute reports mean gross monthly wages and salaries of €1,444 for the second quarter of 2026, published on 12 August 2026 as preliminary data, covering employees under labour contracts. It is a national mean rather than a median, a net salary or a role-specific offer, and the information and communication sector mean was €3,079, which shows how wide the spread is.

A role-specific offer should reflect experience, skills, location, hours and the employer's benefit package, so do not relabel a historical dataset or a national average as the current market salary for a particular professional.

Hours, overtime and rest

The normal schedule is five days a week, up to eight hours a day and forty hours a week, with special schedules, reduced hours, shift averaging and lawful extensions carrying separate requirements. Record actual hours rather than treating a salaried or remote role as exempt from the working-time rules.

Overtime is allowed only in the Labour Code's exceptional cases, which is stricter than most employers expect. The ordinary annual limit is 150 hours, or up to 300 under an eligible sectoral collective agreement, with separate monthly, weekly and consecutive-day limits and statutory exceptions. Minimum supplements are 50% on working days, 75% on rest days and 100% on public holidays, while overtime under aggregated hours carries a 50% minimum supplement.

A meal break must normally be at least thirty minutes and is generally outside working time, with a separate rule for continuous operations. Minimum uninterrupted daily rest is twelve hours, a normal five-day week carries forty-eight hours of weekly rest, aggregated-hours arrangements normally require thirty-six hours, and limited shift-change exceptions can permit twenty-four.

Work on an official public holiday must be paid at least double whether or not it is overtime, and where the work also qualifies as overtime the separate overtime-payment requirements have to be assessed. A public holiday in the calendar is not automatically an extra paid working day off for every schedule.

The basic paid annual leave entitlement is at least twenty working days, and the qualifying rule is kinder than it first looks: someone entering employment for the first time can use it after acquiring four months of employment service, rather than four months with every new employer. Qualifying unused leave must still be compensated on an earlier exit, and larger contractual or collective entitlements and proportional calculations can apply.

Annual leave and holidays

Specified work with unavoidable health or safety risks, and work under a non-standard working-day arrangement, carries at least five additional working days of annual leave. Those are defined legal categories rather than an automatic supplement for anyone who sometimes works overtime, and other protected groups can have extended leave.

Agree and record annual leave under the Labour Code. Deferred and unused leave has statutory use and limitation rules, including special treatment where the reason for deferral continues, so check the employer's duties and the individual circumstances before deleting a balance. On termination, pay qualifying unused leave under the statutory compensation rules.

General holidays include 1 January, 3 March, 1 May, 6 May, 24 May, 6 September, 22 September, 24 to 26 December and Orthodox Easter Friday through Monday, while the 1 November closure is for educational establishments. A non-Easter holiday falling at a weekend normally creates a substitute non-working day under the statutory rule, so check the year's calendar and any exceptional government closure.

Build the employee's actual holiday calendar from their schedule, because the November education closure and the weekend-substitution rule mean a single count of holiday dates is not the number of extra paid working days for every hire.

Sickness: employer pay and state benefit

The employer's share of sick pay is two days, and it does not restart on a continuation certificate.

For a new qualifying sickness spell the employer generally pays the first two working days at 70% of average daily gross pay for the month, with the statutory agreed-pay minimum, a rule that replaced the former three-day version from 1 January 2024. The insurance qualification and the exceptions matter, and an uninterrupted continuation does not restart the two-day employer payment.

Eligible insured employees generally receive NSSI sickness benefit at 80% of the relevant average daily gross or insurable earnings over the preceding eighteen calendar months, capped at the corresponding average net earnings for ordinary sickness, while work-accident or occupational-disease benefit uses 90%. Ordinary sickness normally requires six months of relevant insurance, with exceptions including employees under eighteen, and medical certification is required.

Agree how the employee reports absence and submits the medical documents, and have the provider explain which days it funds as employer and which payments come from NSSI, including how a continued sickness spell is handled.

Maternity, birth and childcare leave

Bulgarian maternity leave is among the longest in Europe, and most of it is funded by insurance rather than by the employer.

Maternity leave is 410 calendar days per child, including forty-five days before the expected birth, and from the child's age of six months the mother can consent to transfer the remaining entitlement to the employed father or an eligible employed grandparent. The leave and the eligibility for the separate state benefit are distinct questions.

NSSI maternity benefit generally requires twelve months of insurance for sickness and maternity and current coverage when leave starts, with a daily amount of 90% of the relevant average earnings over the preceding twenty-four calendar months, subject to the average-net-earnings ceiling and the statutory minimum. It is an insurance benefit rather than a requirement for the employer to pay 90% of current salary throughout leave.

A father who is married to the mother or shares her household has fifteen calendar days of leave from the child's discharge from hospital, with the NSSI benefit generally requiring six months of sickness-and-maternity insurance and using 90% of the relevant twenty-four-month average, subject to the statutory net ceiling and minimum.

After maternity or adoption leave, an eligible employed mother can take further childcare leave until the child reaches two, provided the statutory placement and other conditions are met, and with her consent the employed father or an employed grandparent can take it instead. The state benefit carries separate insurance conditions and is not ordinary employer salary.

The enacted 2026 state social-insurance budget sets the monthly childcare benefit at €398.81 for eligible care to age two and for the qualifying father's childcare leave before age eight. That is the statutory amount, subject to the entitlement and payment rules, and it should not be replaced with a proposed or third-party figure.

A father or adoptive father can have up to two months of childcare leave before the child turns eight if he has not already used the specified transferred maternity, adoption or childcare leave, with prior use of less than two months reducing the remaining allowance. It can be split, generally needs ten working days' advance notice, and has separate state-benefit conditions.

Each eligible employed parent can also request six months of unpaid childcare leave before the child reaches eight, after the preceding statutory leave and subject to the placement conditions, with up to five months of one parent's entitlement transferable by consent. Defined single-parent cases allow twelve months, and notice and minimum-block rules apply.

Additional benefits

You can agree extra leave, supplementary medical cover, meals, training or pension top-ups on top of all of this. Ask the provider to state the entitlement, eligibility, cost and payroll treatment for each, and document the optional package separately from the statutory rights and the state insurance benefits so nobody later reads one as the other.