Your guide to payroll in Bulgaria

Payroll in Bulgaria covers wage calculation, withholding of personal income tax, social security, and health insurance contributions. The payroll compliance in Bulgaria includes monthly reporting to the National Revenue Agency (NRA) and the National Social Security Institute (NSSI). 

Moreover, labor laws in Bulgaria provide guidelines on the pay schedule, minimum wage in Bulgaria, deductions, and taxes. The country’s recent membership in the Eurozone implies that the payroll is done in euros.

This guide covers how Bulgarian payroll works, how to handle deductions and contributions correctly, and how Payoneer Workforce Management can help you with compliant payroll across 160+ countries.

Bulgaria payroll: Wages and other payments

Apart from the basic salary, employees can get bonuses, overtime payment, allowances, and a supplement based on their tenure in Bulgaria.

Payroll cycle in Bulgaria

Bulgarian employees are paid monthly, typically on the last working day of each month per the contract. Mandatory terms include:

• Basic pay is paid in cash. Non-cash payments are permitted only when authorized by the Council of Ministers, collective agreement, or employment contract.
• Tax deduction and social security contribution withheld should be submitted to NRA and NSSI.
• Under the payslip requirements in Bulgaria, employers must issue a payslip itemizing gross pay, deductions, and net pay.
• The payroll records should be kept for the mandatory period of time and include personal details, position, salary, and tax code for each employee.

Minimum wage in Bulgaria

The statutory minimum wage applies across the country, regardless of industry, age, or qualification. The minimum monthly wage is BGN 1,077 (approximately €550.66), with a minimum hourly rate of BGN 6.49 (approximately €3.32). 

The Council of Ministers typically reviews the figure each year under the Labour Code.

Overtime pay

Overtime is regulated by the Labor Code and capped by statute. 

Annual overtime cannot exceed 150 hours, with sub-limits of 30 hours per month, 6 hours per week (daytime), and 3 hours per day across two consecutive days. 

Sick pay

Bulgarian employees are entitled to sick leave of up to 180 days, with extension possible where evaluated by a Special Medical Commission (ТЕЛК, TELK).

• The employer pays the first two days.
• From day three onwards, the NSSI pays.

A medical certificate must be submitted to support the leave.

Maternity pay

The law allows female workers in Bulgaria maternity leave for 410 working days per baby, which includes 45 days before childbirth. Maternity benefit is paid by the NSSI to the mother, who has been paying into social security for at least 12 months, as 90% of her average gross pay per day.

Paternity pay

Fathers are entitled to 15 days of paternity leave, starting from the discharge of the mother and child from the medical institution. The benefit is paid at 90% of the father’s average daily gross salary by the NSSI.

Severance pay

Severance is required in specific termination scenarios:

Payroll in Bulgaria: Contributions and deductions

Bulgarian employers withhold and remit several taxes and contributions monthly. Personal income tax and the employee’s share of social security come out of gross salary. Employer social and health contributions are paid on top.

Salary tax in Bulgaria

Income tax in Bulgaria is among the simplest in the EU: a flat personal income tax (PIT) of 10% on all employment income. The taxable base is gross salary minus mandatory employee social security contributions. 

Employers withhold PIT monthly and remit it to the NRA.

PIT structure:

Social security contributions in Bulgaria cover pension, illness and maternity, unemployment, workplace accidents, and health insurance. 

Both employee and employer taxes in Bulgaria are calculated within minimum and maximum insurable income thresholds set annually by the Public Social Insurance Budget. 

For employment costs in Bulgaria and estimates per hire, the employee cost calculator here offers a detailed breakdown.

Other employee benefits

Beyond wages and statutory leave, Bulgarian employees are entitled to the following mandatory benefits:

• Length of service supplement: Bulgarian labor legislation requires employers to pay an additional 0.6% of base salary for each completed year of professional experience in the same or a similar position. This is known as the length of service (LOS) supplement.
• Health insurance: Public health insurance is mandatory in Bulgaria, administered by the National Health Insurance Fund (NHIF). Employer contributions are part of the standard payroll social security framework. 
  
  Private health insurance is often offered as a supplementary benefit, covering inpatient, outpatient, dental, vision, mental health, and maternity care.
• Annual leave: Bulgarian employees receive a minimum of 20 working days of paid annual leave per year after four months of service. Unused leave carries over but must be used within six months of the year-end. 
• Public holidays: Bulgaria observes 12 public holidays each year, with public holiday work paid at double the regular rate.
• Bereavement leave: Employees are entitled to 2 working days of paid leave upon the death of an immediate family member, including a spouse, parent, child, or sibling. 
• Wedding/marriage leave: Employees are also entitled to 2 working days of paid leave upon their own marriage.
• Childcare leave: After exhausting the 410-day maternity leave, one parent is entitled to additional paid childcare leave until the child turns 2 (provided the child is not in a state childcare facility). Each employed parent is further entitled to 6 months of unpaid parental leave until the child reaches 8 years of age.

Bulgaria payroll compliance best practices

Running payroll management in Bulgaria requires attention to several recurring obligations:

1. Monitor changes to the Labor Code, Social Security Code, and Personal Income Tax Act, particularly after eurozone accession on January 1, 2026.
2. Submit Declaration Form No. 1 monthly to the NRA with salary and contribution data per employee.
3. Remit withheld income tax and social security contributions by the 25th of the following month.
4. Register each employment contract with the NRA Employment Register within three days of signing.
5. Update the length of service supplement annually.
6. Run regular payroll audits to keep processes current and accurate.

For a regional view of Bulgaria payroll processing, see our guide to payroll in Hungary.

Your options for payroll services in Bulgaria

There are three ways to engage and pay employees in Bulgaria:

1. Set up a local entity: Incorporating in Bulgaria, usually as a limited liability company (дружество с ограничена отговорност, OOD), gives direct control over hiring and payroll. It works well for a long-term presence but takes time and capital.
2. Hire independent contractors: Engaging contractors under civil contracts (граждански договори) works for project-based or specialist roles. The risk is misclassification. 
   
   If contractors are treated like employees, Bulgarian labor inspectors can re-characterize the arrangement, with back taxes and penalties to follow. 
   
   Moreover, you can run contractor engagements through an Agent of Record (AOR) or a contractor management system to mitigate misclassification risks. 
3. Work with Payoneer Workforce Management: Payoneer Workforce Management supports onboarding, contracts, payroll, contributions, benefits, and filings on one platform. 

Managing Bulgaria payroll across multiple employees and the new euro framework can be complex. A workforce management platform helps reduce admin load and cuts compliance risk.

For regional context, see our guide to payroll in Poland. For broader thinking, see our perspective on global market expansion and compliance.

Book a demo today to see how Payoneer Workforce Management can support.

Frequently asked questions (FAQs)