Hiring in Bulgaria: Minimum Wage and Employment Guide

Bulgaria has rapidly emerged as one of Europe's most attractive destinations for businesses looking to expand into the EU. Whether you are a U.S.-based employer building a remote team or a company establishing a local subsidiary, hiring in Bulgaria offers access to a skilled, educated workforce, some of the continent's most competitive labor costs, and a flat 10% corporate and personal income tax rate. 

Since joining the Schengen Area in January 2025 and adopting the euro in January 2026, Bulgaria has further reinforced its position as a business-friendly gateway to Central and Eastern Europe. Employment law in Bulgaria is primarily governed by the labor code, alongside the Social Insurance Code and the Personal Income Tax Act, which together define employer obligations across everything from contracts and payroll to termination.

Key Facts About Employment in Bulgaria

Employment Contracts in Bulgaria

All employment relationships in Bulgaria must be formalized through a written contract before work begins. The employer is legally required to register the employment contract with the National Revenue Agency (NRA) no later than three days after it is signed, and employees may not commence work until that registration is confirmed in writing.

Common Contract Types

• Permanent (Indefinite) Contract: This is the default contract type and the most common form of employment in Bulgaria. It has no specified end date and offers employees the greatest level of legal protection.
• Fixed-Term Contract: A fixed-term contract may be concluded for a definite period of up to three years unless another law or Council of Ministers act provides otherwise. Fixed-term contracts may also be used until completion of specific work, for temporary replacement of an absent worker, for certain competitive positions, or for a defined term of office. Contracts concluded in violation of the statutory fixed-term rules are treated as indefinite.
• Part-Time Contract: Available for roles requiring fewer than the standard 40 hours per week. Employees working part-time retain proportional entitlements to leave and other statutory benefits.
• Seasonal/Temporary Contract: Permitted for work of a seasonal nature, particularly in agriculture and tourism.

Every employment contract must include the following elements:

• Full identification details of both the employer and the employee.
• Job title and detailed description of duties.
• Place of work.
• Start date and, for fixed-term contracts, the expected end date.
• Gross salary amount and payment schedule.
• Standard working hours and schedule.
• Probation period
• Notice period (minimum 30 days, up to a maximum of three months).
• Reference to applicable collective bargaining agreements, if any.

Payroll, Taxes, and Social Security in Bulgaria

Understanding payroll in Bulgaria requires familiarity with both income tax and social security obligations for employers and employees. Bulgaria operates a monthly payroll cycle, and all withholdings must be remitted to the National Revenue Agency (NRA) by the 25th of the following month.

Employer Contributions

Employee Contributions

Income Tax

Bulgaria applies a flat income tax rate of 10% on all employment income, calculated on the gross salary after mandatory social security deductions are subtracted. There are no progressive tax brackets, making payroll calculations straightforward for both employees and employers.

Compensation & Benefits in Bulgaria

The minimum wage rule in Bulgaria applies regardless of the employee's age, industry, or experience level. Employers in sectors with defined minimum social insurance thresholds must ensure contributions are calculated on the applicable floor, even when the agreed salary is at the statutory minimum. Competitive employers in Bulgaria's growing IT and services sector often supplement the statutory package with additional health insurance, performance bonuses, and flexible work options.

Working Hours and Overtime in Bulgaria

Overtime Rules

Overtime is generally restricted by the Labor Code and is only permitted for specific circumstances, such as completing work already in progress, emergency repairs, or disaster response. Employers and employees may also arrange flexible working time or annualized hours calculations, provided the average does not exceed 40 hours per week.

Leave and Statutory Time Off in Bulgaria

Unused annual leave may be carried forward for up to two years from the end of the year in which it was accrued.

Sick Leave

Employees must provide a medical certificate within 48 hours of the first day of sickness.

Parental Leave

To be eligible for maternity or paternity benefits, employees must have at least 12 months of social security contributions. Once the child reaches six months of age, the mother may transfer her remaining maternity leave entitlement to the father.

Bulgaria observes 13 official public holidays per year. If a public holiday falls on a weekend, the following Monday (or consecutive working days) becomes a non-working day in lieu. Employees required to work on a public holiday are entitled to at least double their standard remuneration.

Hiring and Onboarding Process in Bulgaria

The following steps outline the legally compliant process for hiring in Bulgaria:

• Draft and sign a written employment contract before the employee starts work. The contract must cover all mandatory elements described above.
• Register the employment contract with the NRA no later than three days after signing. The employee may not begin work until a registration confirmation number is issued.
• Set up payroll so the employee is included in monthly social security and health insurance reporting and contribution payments, including withholding obligations for income tax and both employer and employee social security contributions.
• Provide the employee with a copy of their registered contract, their job description, and the company's internal labor rules.
• Notify the General Labor Inspectorate within seven days of a foreign employee commencing work.

Onboarding Tips

• Conduct mandatory health and safety briefings at the time of onboarding.
• Ensure that meal vouchers and other non-taxable benefits are set up through an approved provider.
• Familiarize employees with Bulgaria's labor rules on overtime, leave, and sick pay at the start of employment.

Work Permits in Bulgaria: Foreign Nationals

• EU, EEA, and Swiss nationals may work freely in Bulgaria without a permit. Stays exceeding 90 days require registration with the Migration Directorate.
• Non-EU nationals require both a work permit (initiated by the employer through the National Employment Agency) and a long-stay Type D visa before commencing employment.
• The Single Residence and Work Permit is the standard route for non-EU employees; it is valid for up to one year and renewable. No more than 10% of a company's workforce may hold this permit.
• The EU Blue Card is available for highly skilled non-EU professionals with a relevant university degree. There is no workforce quota restriction for Blue Card holders.
• As of June 2025, applicants relying on a foreign university degree must have it formally recognized in Bulgaria before the permit is issued.

Termination & Notice Periods in Bulgaria

Employers must follow a prescribed legal process when ending an employment relationship in Bulgaria. Failure to comply exposes the employer to reinstatement claims and financial liability.

• Notice period (standard): A minimum of 30 days for indefinite contracts; longer periods of up to three months may be agreed in the contract. For fixed-term contracts, the notice period is three months, and it cannot exceed the contract's remaining duration.
• Valid grounds for employer-initiated dismissal include: closure or partial closure of the enterprise, reduction of the workforce, lack of required qualifications, poor work performance, and disciplinary breaches. The Labor Code provides an exhaustive list of permissible grounds, and any dismissal outside this list may be challenged as unlawful.
• Disciplinary dismissal (e.g., for serious misconduct) may occur without notice but must follow a formal procedure, including allowing the employee to present a written defense.
• Severance pay: One gross monthly salary is owed for dismissals related to business restructuring (closure, downsizing). Two months' gross salary is owed when termination results from the employee's disability where no suitable role is available, provided the employee has at least five years' service. Upon termination when an employee is eligible for a pension, severance is two months' gross salary (six months if the employee worked for at least ten of the last twenty years with the same employer).
• Mutual termination: When the employer initiates termination by mutual agreement, the statutory minimum compensation is four gross monthly salaries.
• NRA notification: The employer must notify the NRA within seven days of the termination taking effect.
• Unused paid annual leave must be compensated in full upon termination.

Useful Resources

• Ministry of Economy and Industry (Employment & Wages)
• Bulgarian National Employment Agency

Disclaimer: This article is provided for informational purposes only and should not be relied on as legal advice or used as a substitute for advice from qualified legal counsel.