How to hire contractors in Bulgaria

Hiring contractors can help your business scale while keeping costs down, especially when hiring from a country with lower average wages. 

If you want to hire contractors in Bulgaria, where the minimum wage is around $640 a month, you’ll need to do so legally and efficiently. But it’s not easy for businesses to do this on their own. Thankfully, that’s why partners like Payoneer Workforce Management exist. 

We’re here to help you access talented workforces overseas, including Bulgaria. This guide covers everything you need to know about how to hire and pay contractors in Bulgaria, a country that offers some of the most competitive labor costs in Europe.

How to hire Bulgarian contractors 

To hire Bulgarian contractors, you’ll need to:

• Be clear on the legal classification of contractor vs. employee status 
• Learn the local labor laws (including public holidays, employee protections, and contract terms)
• Source your contractors on job boards and platforms.

Let’s take a look at each step in more detail.

1. Understand contractor vs. employee classification

In Bulgaria, contractors are classified by the Obligations and Contracts Act (OCA) as workers who:

• Can choose when and where they work (e.g., they do not have to work at a company’s premises)
• Can work independently and without close supervision (e.g., they do not have to report to a line manager)
• Uses personal tools and equipment to complete the tasks of the contract (e.g., they will provide their own computer)
• Has the freedom to work for multiple businesses at a time (assuming nothing in their contract says otherwise)
• Can determine their payment terms (e.g., they’ll send an invoice vs. receiving a paycheck)
• Can subcontract or involve others in the completion of contract tasks (i.e., they can pay other people to perform their duties, as long as the work gets done)
• Must be responsible for their own taxes and insurance (i.e., the company is not liable for these contributions).

Reading that list, it’s clear that hiring a Bulgarian contractor differs from hiring an employee. The greater level of freedom and autonomy extended to a contractor is typically offset by not receiving employment benefits like sick pay or health insurance.

Misclassifying a Bulgarian contractor as an employee, or the other way around, can lead to legal penalties and financial liability. 

That’s why it’s important to be very clear about a contractor’s classification in any contracts. Be sure to cover the contractor’s place of work and working hours, contract duration, payment terms, and tools/equipment, as per the list above.

2. Understand local labor laws

Understanding Bulgaria’s local labor laws is an important step when hiring Bulgarian contractors. While some of these laws and regulations don’t apply to contractors, getting to know them will help you better navigate the Bulgarian working landscape. 

Here’s a quick cheat sheet on Bulgaria’s labor laws:

• Minimum wage: 1077 Bulgarian Lev (BGN) per month. That’s around $640.
• Working hours: Bulgarian law mandates a 5-day working week, 8 working hours a day for up to 40 hours total
• Public holidays: Bulgaria has 11 public holidays a year, all of which are considered non-working days
• Annual leave: Employees are entitled to 20 days of basic annual leave, but you won’t need to worry about this when hiring Bulgarian contractors
• Legal rights and protection: These are outlined in the Obligations and Contract Act (OCA) and include considerations around discrimination and fair remuneration, as defined in the agreement between you and the contractor
• Termination: Termination will be pre-agreed in the hiring contract, but typically, Bulgarian labor law requires an official termination notice
• Contract terms: Contracts should include a description and scope of work, payment terms, and other key details. Learn more about what to include in a freelancer contract in Bulgaria.

3. Hire contractors in Bulgaria

Posting to online job boards is a great way to find and hire contractors in Bulgaria. The most popular include:

• Jobs.bg
• Zaplata.bg 
• Yox 
• Karieri
• Buljobs
• LinkedIn

While many workers speak English in Bulgaria, these job boards are primarily in Bulgarian. So, unless you have someone on the team who can confidently translate your job description and avoid miscommunication, it might be safer to stick to LinkedIn.

Given the legal difference between contractors and employees in Bulgaria, you’ll want to be clear in your job listing that this is a contract role. Some workers will be looking for contract work only, and vice versa. 

Your job listing should also clearly outline the scope of work and the estimated contract duration and commitment. Remember, contractors in Bulgaria are free to work for more than one company at a time, so if you need someone’s full-time dedication (say, for three to six months), be sure to say that upfront.

The self-employment rate in Bulgaria sits around 10%, which is lower than the global benchmark set by OECD. This means you might interview someone who is exploring the idea of contract work for the first time. Be prepared to answer questions regarding contractor status in Bulgaria and how a Bulgarian contractor can expect to get paid.

How to pay contractors in Bulgaria

Paying a contractor in Bulgaria involves:

• Determining how you’ll pay them (bank transfer, online transfer, cryptocurrency, or via a global payroll partner)
• Ensuring both parties are clear on the contractor’s tax liability
• Processing their payments

1. Determine how to pay

A contractor in Bulgaria can be paid via:

• Bank transfer: The largest banks in Bulgaria are DSK Bank, UniCredit Bulbank, and United Bulgarian Bank (UBB)
• Cryptocurrency: While not as common, some Bulgarian contractors may accept cryptocurrency payments
• Dedicated online platforms: Hiring and paying contractors can be a complicated process, but platforms like Payoneer WFM make managing contractor payments easy

If you’re looking to hire more than one contractor in Bulgaria, it makes sense to simplify your pay processes as much as possible. Learn more about how Payoneer can help you streamline international payments.

2. Ensure your Bulgarian contractors have the right tax information

Contractors must file and pay their own taxes. If your company is registered in the US, you must file the correct tax forms for Bulgarian contractors, and you may need to provide contractors with the correct tax information. 

In Bulgaria:

• Sole traders must make their own contributions to social security, pension, and health insurance, and have a flat 15% income tax
• Freelancers must pay social security, pension, and health insurance, and have flat 10% income tax (with the potential for a 25% discount on operational expenses)

3. Pay your Bulgarian contractors

Now it’s time to pay your contractors in Bulgaria. Workforce management platforms like Payoneer WFM help smooth out the process of paying a contract worker in Bulgaria. As a business leader, you can delegate all-important considerations like payment compliance and focus on finding the best contractors for the job at hand.

Why Payoneer WFM is the easiest way to pay and hire contractors in Bulgaria

Payoneer Workforce Management is a platform that helps companies employ independent contractors and full-time employees in 160+ countries, without the headaches of setting up a local legal entity. 

Our unified platform helps companies:

• Onboard new hires quickly and compliantly without a local entity
• Run global payroll securely with a single click and automate contractor invoice payments
• Stay updated and compliant with local employment laws 
• Manage taxes, benefits, work permits, timesheets, background checks, and more.

From hiring in days to multi-currency payroll, Payoneer WFM has everything a business needs to hire, pay, and manage a productive global team. 

Speak with one of our experts today about hiring and paying contractors in Bulgaria.

Bulgarian contractors FAQs

What is an independent contractor in Bulgaria?

An independent contractor is hired per project or for a set time period. An independent contractor is not an employee and has a different agreement in place with the hiring organization. Be careful not to misclassify your contractors in Bulgaria, which can lead to fines.

Does the minimum wage apply to Bulgarian contractors?

The minimum wage of BGN 1077 per month does not apply to contractors in Bulgaria. However, a contractor is typically paid more than an employee, in lieu of other benefits.

Can you manually pay contractors in Bulgaria?

You can pay contractors manually in Bulgaria, but you probably shouldn’t. Payment partners like Payoneer WFM exist to mitigate risks around compliance, security, poor contractor experience, and risk to employer reputation.