Last updated in June 2025.
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Bulgaria, a Balkan country in Southeast Europe, is known for its rich history, cultural landmarks, and Black Sea coastline. As an EU member with a competitive tax system and a cost-effective labor market, it offers attractive conditions for businesses operating internationally.
Payroll in Bulgaria - 2025 Updates
In 2025, Bulgaria introduced several updates impacting payroll and taxation:
- Minimum Wage Increase: The monthly minimum wage increased to 1077 BGN.
- Social Security Thresholds: Maximum monthly insurance income increased to BGN 4130 BGN.
- Remote Work Provisions: New labor code amendments provide additional flexibility and compliance requirements for remote employees.
- Electronic Sick Notes: Full digitization of medical leave certificates, simplifying employer reporting obligations.
- Inflation-Adjusted Tax-Free Benefits: Tax-free meal vouchers now capped at BGN 200 per month.
Employers must stay informed of these changes to remain compliant and optimize payroll processes.
Bulgaria Payroll - Basic Facts
Bulgaria operates on a monthly payroll cycle, with salaries usually paid by the end of the month. Employees contribute to social security and personal income tax. Employers have additional obligations for contributions, filings, and reporting.
- Workweek: 40 hours (Monday to Friday)
- Vacation: Minimum 20 business days per year
- Sick Leave: Paid by the employer for the first 2 days, then by the National Social Security Institute (NSSI)
- Parental Leave: Up to 410 days per child, with compensation provided by the NSSI
Tax and Social Security Considerations
Personal Taxes
- Flat Income Tax Rate: 10% on all personal income
- Social Security Contributions (Employee): ~13.78% (includes pension, health, unemployment, etc.)
Corporate Taxes
- Corporate Income Tax: 10% (flat rate)
- Employer Social Security Contributions: ~18.92% (varies slightly depending on labor category)
- VAT:
- Standard rate: 20%
- Reduced rate: 9% (e.g., hotel accommodation)
Other Taxes
- Dividend Tax: 5% for individuals
- Capital Gains Tax: 10%
- Property Tax: Varies by municipality
- Environmental and Excise Taxes: Applied to alcohol, tobacco, fuels, and vehicles
Social Security Breakdown
For Employees:
- 6.58% pension
- 3.2% health
- 1.4% unemployment and other funds
For Employers:
- 8.22% pension
- 4.8% health
- 6% for other contributions, including accident insurance
Social contributions are capped at BGN 3,750 of monthly income in 2025.
Need help navigating Bulgaria’s payroll regulations and social contributions?
Compensation and Benefits
Minimum Wage
- BGN 933 per month in 2025
- Reviewed annually by government decree
Working Hours
- Standard: 8 hours per day, 5 days per week
- Overtime: Restricted; must be compensated or offset with time off
- Rest Periods: Minimum 12 hours between shifts and 48 hours weekly rest
Public Holidays in Bulgaria - 2025
- January 1 – New Year’s Day
- March 3 – Liberation Day
- April 18 – Good Friday
- April 21 – Easter Monday
- May 1 – Labour Day
- May 6 – Saint George’s Day
- May 24 – Culture and Literacy Day
- September 6 – Unification Day
- September 22 – Independence Day
- December 24–26 – Christmas Holidays
Leave
- Annual Leave: Minimum 20 business days per year
- Sick Leave: Paid by employer (first 3 days), then by NSSI (up to 80% of income)
- Parental Leave:
- Maternity Leave: 410 days paid at 90% of gross wage
- Paternity Leave: 15 days within 6 months of child’s birth
- Unpaid Leave: Allowed upon request and employer approval
- Other Leave: Includes leave for education, marriage, funeral, and military service
Foreign Workers in Bulgaria
- EU/EEA Citizens: Do not require work permits but must register locally
- Non-EU Citizens: Must secure work permits and residence permits
- Tax Residency: Individuals are considered tax residents if they spend more than 183 days in Bulgaria per year
- Non-Resident Tax: 10% flat rate on Bulgarian-sourced income
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