Hire employees in Bulgaria
What a foreign company needs to know before employing people in Bulgaria: whether you need a local entity, what an employee costs once the EUR 2,300 contribution cap applies, how euro payroll and the monthly NRA returns work since Bulgaria joined the eurozone, what a dismissal requires, and why the agency work rules shape how you structure a hire. Written for CHROs, CFOs, General Counsel and founders.
Quick answers
The questions leadership teams ask first.
Do I need a local entity in Bulgaria to hire?
No. There are three routes:
- Employer of Record. Dryft Global employs the person in Bulgaria through a compliant local employer, registers the contract with the National Revenue Agency (NRA) before day one, files the monthly Forms 1 and 6 and runs payroll in euro. You direct the work.
- Direct local entity. You form a single-member limited liability company (EOOD), register with the NRA and set up payroll: plan for 2 to 4 weeks before the first payroll.
- Independent contractor. Lawful only for genuinely independent work. The Labour Inspectorate can convert a dependent civil contract into indefinite employment, with fines of up to EUR 7,669 per violation.
When should I use an EOR instead of registering locally?
Use an EOR for your first engineers, shared services staff or sales people in Bulgaria, when you want to start in days and do not want to build NRA registration and the monthly Forms 1 and 6 yourself. Your own entity earns its keep for a sustained team or a sales office signing Bulgarian contracts.
What does an employee actually cost beyond salary?
Employer contributions are 18.92% to 19.62% of gross pay, but only up to the maximum insurable income of EUR 2,300 a month from 1 August 2026. On a EUR 3,000 salary that works out at about 14.5%. Meal vouchers and private medical are customary and take the all-in figure to about 19%.
How difficult is termination in Bulgaria?
Dismissal is allowed only on statutory grounds such as staff reduction, reduced workload or a serious disciplinary breach. Notice is usually 30 days, protected employees need prior Labour Inspectorate permission, redundancy compensation is up to 1 month's pay and unused leave is paid out. An unlawful dismissal can lead to reinstatement and up to 6 months' pay, so procedure matters. Mutual agreement is the common clean exit.
Can Dryft Global legally employ my team in Bulgaria?
Yes. Dryft Global employs your team in Bulgaria through a compliant local employer set up for the Bulgarian agency work rules. We issue Labour Code contracts, register them with the NRA before day one, file Forms 1 and 6 and pay contributions and tax by the 25th, administer leave and meal vouchers, and manage notice and dismissal.
Hiring routes compared
Speed, set-up burden and liability differ by route.
| Factor | Direct local entity | Dryft Global EOR | Independent contractor |
|---|---|---|---|
| Time to first payroll | 2 to 4 weeks | Days to 2 weeks | Days |
| Local entity required | Yes, EOOD or branch | No | No |
| NRA registration and returns | Your registrations | Handled by Dryft Global | Contractor's own |
| Agency work rules | Not applicable | Structured compliantly by Dryft | Not applicable |
| Statutory liability | Direct corporate exposure | Assumed by Dryft Global | High if the work is dependent |
| Best fit | Sustained team, local sales | First hires, engineering teams | Short independent projects |
What an employee costs in Bulgaria
Contributions stop at the maximum insurable income, so the employer's share falls as a percentage of pay for well paid roles. The model below is a Sofia software engineer on EUR 3,000 gross a month, using the EUR 2,300 cap in force from 1 August 2026.
| Component | Employer share | Notes |
|---|---|---|
| Pension and second pillar fund | 11.02% | On pay up to EUR 2,300 a month |
| Health insurance | 4.80% | Same capped base |
| Sickness, unemployment and work accident | 3.10% to 3.80% | Work accident rate 0.4% to 1.1% by activity |
| Statutory subtotal | ~14.5% | 18.92% of the EUR 2,300 cap, on a EUR 3,000 salary |
| Meal vouchers | ~3.4% | Non-taxable up to EUR 102.26 a month |
| Private medical insurance | ~1.3% | Typical market budget |
| Total employer on-cost | ~19% | Above gross salary |
For an employee on EUR 3,000 a month, budget roughly EUR 42,900 a year all-in before the EOR fee. At or below the cap the full 18.92% to 19.62% applies. The employee's own deductions are 13.78% of the capped base plus 10% income tax, leaving net pay of about EUR 2,415 a month. Ask us for a cost model with current rates applied.
Payroll and tax
Salaries are paid at least monthly, in euro since Bulgaria joined the eurozone on 1 January 2026; salaries agreed in leva convert at EUR 1 = BGN 1.95583, rounded up in the employee's favour. The employer files Form 1 (insurance data) and Form 6 (contributions and tax withheld) with the NRA and pays by the 25th of the following month. Every contract must be registered in the electronic employment record within 3 days and before work starts, and terminations within 7 days.
Income tax withholding
Employment income is taxed at a flat 10% after the employee's mandatory contributions. Parents can claim an annual child relief through the employer, from EUR 3,067.75 for one child. The employer files an annual income certificate with the NRA by the end of February.
Minimum wage 2026
The national gross minimum wage is EUR 620.20 a month (EUR 3.74 an hour) from 1 January 2026, up 12.6%. Parliament adopted a new minimum wage formula in September 2026, and a EUR 660 minimum for 2027 has been proposed. Contributions are also paid on at least the minimum insurable income for the activity and role, which ranges from EUR 620.20 to EUR 1,532.41 a month.
Leave and mandatory benefits
- Annual leave. At least 20 working days a year, excluding public holidays, with unused leave paid out on termination.
- Public holidays. 15 official holiday dates in 2026, including Orthodox Easter and a one-off day off on 2 January for the euro changeover; holidays falling on a weekend move to the next working day.
- Sick pay. The employer pays the first days of illness at 70% of the average daily wage, then the National Social Security Institute pays 80% of average insurable income.
- Maternity. 410 calendar days at 90% of average insurable income, paid by the NSSI, not the employer.
- Paternity. 15 calendar days at 90%, paid by the NSSI.
- Length-of-service bonus. At least 0.6% of base salary for each year of relevant professional experience.
- Working time. 40 hours a week. Overtime is capped at 150 hours a year, with premiums of at least 50%, 75% on rest days and 100% on public holidays.
- Common extras. Meal vouchers, private medical, sports cards and extra leave days.
Termination and notice periods
Probation can last up to 6 months for an indefinite contract, and the party in whose favour it was agreed can end the contract without notice. After that, notice works as follows.
| Item | Rule |
|---|---|
| Notice, indefinite contract | 30 days, extendable by agreement up to 3 months |
| Disciplinary dismissal | No notice |
| Redundancy compensation | Up to 1 month's pay (more under a collective agreement) |
| Unused annual leave | Paid out on every termination |
| Unlawful dismissal | Reinstatement and up to 6 months' pay |
- Statutory grounds only. There is no at-will dismissal in Bulgaria.
- Follow the procedure. Disciplinary dismissal needs a written request for explanations and a reasoned order within 2 months of discovering the breach.
- Protected employees. Dismissing mothers of children under 3, employees on statutory leave or with listed medical conditions, and employee representatives needs prior Labour Inspectorate permission.
- Collective dismissal. Thresholds start at 10 employees in 30 days, with consultation at least 45 days before and notice to the Employment Agency.
- Mutual agreement. Needs no statutory ground and is the common clean exit.
Can I use independent contractors?
Only for genuinely independent work. Personal work under your direction, with set hours, your equipment and a fixed monthly fee, points to employment. The Labour Inspectorate can declare that a civil contract is really employment, in which case it stands as an indefinite, full-time contract and the NRA recalculates tax and contributions, with fines of EUR 767 to EUR 7,669 per violation. Placing a worker under another company's direction is also regulated as temporary agency work, which needs Employment Agency registration and limits assignments, so the employing structure matters. Bulgarian law has no separate employer of record category, so this is a point to settle for each hire. For anyone who works like an employee, an EOR set up through a compliant local employer is the safe route.
The legal framework in brief
Bulgaria is a civil law system where the Labour Code sets most terms directly and collective agreements and contracts can only improve on it. The instruments you will hear most:
- Labour Code. Contracts, probation, working time, leave, discipline, notice, dismissal and temporary work agencies.
- Social Security Code and Health Insurance Act. Contributions and state benefits, with rates and caps fixed each year in the State Social Security Budget Act.
- Personal Income Taxes Act. The flat 10% income tax and employer withholding.
- Euro Introduction Act. Conversion of salaries and amounts from leva to euro from 1 January 2026.
- Data protection. GDPR and the Personal Data Protection Act, enforced by the CPDP, plus whistleblowing channels for employers with 50 or more staff.
- Immigration and right to work. EU nationals work freely. Others need a Single Permit, after a labour market test and within a 20% foreign staff cap, or an EU Blue Card at 1.5 times the average gross salary.
- Pay transparency. A bill transposing the EU directive was submitted to Parliament in September 2026 and is pending.
- Authorities. The Ministry of Labour and Social Policy, the NRA, the NSSI, the General Labour Inspectorate, the Employment Agency and the CPDP.
Where the talent is
About 6.4 million people, with unemployment of 3.2% in the first quarter of 2026. Pay in software and information services averages about EUR 3,079 a month against EUR 1,444 across the economy. Bulgaria ranked 18th in the world for English proficiency in 2025. Time is UTC+2 (UTC+3 in summer), and Bulgaria is in the EU, a full Schengen member since 2025, in the eurozone since 2026 and in NATO.
| Region | Talent and industry concentration |
|---|---|
| Sofia | Capital, headquarters, software, shared services and fintech |
| Plovdiv | IT, manufacturing and business services |
| Varna | IT, maritime and business services |
| Burgas | Logistics, industry and IT |
Bulgaria Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step.
- Step-by-step checklist, from route selection to first payroll
- Contract, probation and NRA registration before day one
- Gross to net and employer cost set-up under the 2026 caps
- Monthly Forms 1 and 6 calendar (25th) and annual NRA certificate
- Civil contract reclassification and agency work risk checklist
- Notice, protected employees and mutual agreement pack
- Every official Bulgarian authority with direct links
This guide is general information, not legal, tax or immigration advice. Bulgaria adopted the euro in January 2026 and revises the minimum wage, the maximum insurable income and the work accident rates each year, and the minimum wage formula and pay transparency rules are changing. Confirm current figures and the employment structure with a qualified adviser or with Dryft. Last reviewed November 2026.
Ready to hire in Bulgaria?
Tell us who you want to hire and where they sit. You will get a cost model and a compliant route within a day, from a person who has done this before.