Bulgaria

Bulgaria PEO & Employer of Record

WeHG provides an International PEO and universal Employer of Record service in Bulgaria to companies willing to enter the Bulgarian market or hire local/expat employees in this area.

Traditional approach requires establishing a subsidiary in Bulgaria.  Contemporaneously, our solution allows you to start the operations in Bulgaria within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf.

Bulgaria fast facts

Population, million: 7
Land area: 110,993.6 km²
Capital: Sofia
Local currency: Lev (BGN)

GDP per capita:$ 67,917
GDP in currency:$ 9,826

Hiring, Negotiating and Doing Business in Bulgaria

Necessity of written employment contract

According to the Bulgarian labour law, the employment relationship between an employer and an employee begins with the concluding of an employment contract.

The employment contract is an agreement between two parties: the employee that offers his service with his working power(labour)and the employer that creates the working conditions and pays remuneration for the work performance.

The written form is obligatory for the validity of the contract.

Different forms of engagement: employment, contracting, work with private entrepreneur

Work permits are required to hire a foreign national and evidence must be presented as to why a local person cannot be hired for the position. By law, a decision whether to issue the permit must be reached within a month.

The Bulgarian Labour Code governs the worker-employer relationship in Bulgaria, regardless of worker or corporate nationality. Written employment contracts are required under the code, and it has clear rules governing employee termination, including protection from unlawful dismissal. Employees may sue employers if they feel they have been unlawfully dismissed. Remedies include reinstatement, back wages, and modification of employment records.

Bulgaria Employment Contract

Types of employment agreements

  • Employment contracts with a trial period. This contract is concluded to check the employee’s skills. From the perspective of the employee – such a contract could provide him with the opportunity to test if this work is suitable for him. The probation may not exceed a time period of 6 months. The contract must indicate in whose favour the probation is agreed. If the employment contract does not contain this agreement, it is assumed that the time period is in favour of both parties.
  • Employment contracts for internships. Regarding internships, the employer agrees to train the employee during the time of the contract.
  • Main employment contracts and Additional employment contracts. The main employment contract is regulated in Chapter V, paragraph I of the Labour Code. If an employee concluded two or more employment contracts, the one that was concluded first/the one that requires more working hours is assumed to be the main employment contract. Additional employment contracts are contracts that have been concluded in spite of the existence of a main employment contract. If not provided otherwise by law, the general rules regarding employment contracts apply. 

Bulgaria working hours

The normal duration of the weekly working hours at night for a five-day work week shall be 35 hours. The normal duration of the night working hours for a five-day work

week shall be 7 hours. Night work shall be work performed between 10.00 p.m. and 6.00 a.m., and for underage workers and employees not reached 16 years of age – from 8 p.m. to 6 a.m. The employer shall provide to the employees’ hot food, refreshments and other facilities for the effectiveness of the night work.

Overtime

In Bulgaria, the employee is not obligated to work overtime (unless otherwise agreed). Overtime must be performed outside the regular working time (e.g. before the beginning/after the end of the working day, during the lunch break).

The instruction to work overtime is made by the employer’s declaration of will. It may be issued in writing. If necessary for operational reasons, the instruction may be issued after the performance of the overtime work. Overtime work may be performed as well without the employer’s declaration of will if he is aware that the employee is doing overtime work and did not disagree with it. If the employer wants to oppose this practice, he must prevent the performance of overtime work by issuing a written instruction.

It is forbidden to compensate overtime with breaks. According to Article 150 in relation to Article 262 of the Labour Code, the performed overtime work is remunerated with respectively higher supplements agreed between the parties of the employment contract. The minimum supplements are as follows:

  • 50 % for work on work days;
  • 75 % for work on holidays;
  • 100 % for work o public holidays;
  • 50 % for work at working time calculated on a weekly or longer basis.

Vacation leave in Bulgaria

Employees in Bulgaria are entitled to a minimum of 20 business days off per year. The employees should use their annual leave entitlement during the year earned.

If annual leave remains unused, the employee must be compensated monetarily for any unused leave for up to two years from the date the annual leave entitlement arose.

Bulgaria Maternity Leave

Female employees shall be entitled to a leave for pregnancy and birth amounting to 410 days for each child, of which 45 days shall obligatorily be used before the childbirth.

Should the medical authorities err in predicting the date of childbirth and it occurs before the expiry of the 45 days from the beginning of the leave, the remainder of these 45 days shall be used after the childbirth.

Bulgarian Severance Laws

The employer can set a probationary period in the employment contract not to exceed 6 months.

Resignation or Termination Notice Period: Employment contracts may be terminated with or without notice depending on the circumstances or by mutual consent.

  • If the employee or employer terminates an indefinite employment contract with notice, at least a 30-day notice is required.
  • The notice period for a fixed contract is 3 months but not more than the remaining period of the contract.
  • No notice is required if the employment contract is due to expire (as in the case of a fixed contract).

Severance Pay. There is no statutory requirement regarding severance pay, however, employees are entitled to redundancy pay equal to 1 month’s salary in the case of individual or collective dismissal on economic grounds:

  • If employment is terminated as a result of illness and the employee has been in service for at least 5 years, 2 months’ severance pay applies.
  • If employment is terminated because the employee has acquired the right to pension, 2 months’ severance pay applies or 6 months’ if the employee has been in service for at least 10 years.

Bulgaria Tax

Personal Income Tax and Social Security contributions:

  • Social insurance – 12,9% of gross salary 
  • Personal Income Tax – 10 % of gross salary 

Employer’s obligations:

  • Pension Fund – 10.92% of gross salary 
  • Medical insurance – 4,8% of gross salary 
  • Additional mandatory insurance (DZPO) – 2,8% of gross salary 
  • Accidents fund – 0,5% of gross salary 

Health Insurance Benefits in Bulgaria

The employee shall be entitled to a leave in case of temporary disability resulting from a  general disease or an occupational disease, occupational injury, for sanatorium treatment or for urgent medical examinations or tests, quarantine, suspension from work prescribed by the medical authorities, for taking care of an ill or quarantined member of the family, for urgent need to accompany an ill member of the family to a medical check-up, test or treatment, and for taking care of a healthy child dismissed from a child-care facility because of quarantine imposed on that facility or on the child. These leave shall be permitted by the medical authorities. For the duration of the leave in case of temporary disability, the employee shall be paid a cash compensation within periods specified by a separate law.

Additional Benefits in Bulgaria

Food Vouchers are common in Bulgaria and are tax-exempt up to BGN 60 per month.

Private health insurance is sometimes provided by employers.

General market practice benefits/additional allowances

Generally, we recommend budgeting 45%  for benefits on top of the gross salary to calculate the total employee cost including benefits in Bulgaria.

Bulgaria Holidays

Bulgaria celebrates 11 public holidays for which employees are given the day off, including:

  • New Year’s Day
  • Liberation Day
  • Orthodox Good Friday
  • Labor Day
  • Orthodox Easter Monday
  • Culture & Literacy Day
  • Unification Day
  • Independence Day
  • Christmas Eve
  • Christmas Day
  • Second Day of Christmas

Public holidays that occur on the weekend are not carried over to the following Monday. When a public holiday takes place on a Tuesday, Wednesday or Thursday, the Monday, Tuesday or Friday is sometimes taken as an official holiday to make a long weekend; working Saturdays are imposed to make up for the extra day’s holiday.

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

 

FAQ Bulgaria

  • Working hours in Bulgaria

    The normal duration of the weekly working hours at night for a five-day work week shall be 35 hours. The normal duration of the night working hours for a five-day work

  • What are the main holidays in Bulgaria?

    • New Year’s Day
    • Liberation Day
    • Orthodox Good Friday
    • Labor Day
    • Orthodox Easter Monday
    • Culture & Literacy Day
    • Unification Day
    • Independence Day
    • Christmas Eve
    • Christmas Day
    • Second Day of Christmas
  • What are payroll taxes in Bulgaria?

    • Social insurance – 12,9% of gross salary 
    • Personal Income Tax – 10 % of gross salary 
  • Hannah Kohl
    Author:
    Hannah Kohl. Head of Customer Success. Has extensive experience in the HR and IT industries. Helped 100+ international clients to achieve their global goals.

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