Looking for an Employer of Record in Bulgaria? Here’s what you need to know

Hiring employees in Bulgaria is an attractive option for global companies seeking skilled talent, competitive labor costs, and access to the European market.

But while many global employers consider working with an Employer of Record, Bulgaria may not permit EOR services under its labor framework. That doesn’t mean engaging talent in Bulgaria is out of reach, though.

The model of  EOR in Bulgaria may not be applicable; So, companies can engage talent using a workforce management platform, like Payoneer Workforce Management, which helps businesses manage onboarding, payroll, with compliance support as per local employment requirements.

Keep reading to learn what engaging talent in Bulgaria involves and how Payoneer Workforce Management can help you manage Bulgaria payroll, onboarding, and more.

How to hire employees in Bulgaria

There are three main ways companies can engage and pay employees in Bulgaria. Each option comes with different levels of complexity, cost, and compliance responsibility.

1. Set up a local entity: Setting up a Bulgarian legal entity lets you hire directly under local labor law, with full control over employment relationships, payroll, and benefits. However, it requires significant time, legal expertise, and ongoing compliance. 

2. Hire independent contractors or freelancers: Hiring independent contractors or freelancers can be faster, but Bulgarian authorities closely monitor these arrangements. Misclassification can lead to penalties and fines, retroactive payments, and legal exposure.

3. Workforce management platform: Since an Employer of Record in Bulgaria model may not be permitted, companies can use a workforce management platform to streamline talent engagement. These platforms help manage onboarding, payroll, and benefits while respecting local legal frameworks.

Payoneer Workforce Management is a trusted option for businesses that want to engage and pay employees in Bulgaria without the burden of entity setup. We assist you in mitigating risks related to contractor misclassification and help you set up localized benefits as per local laws and requirements.

How to onboard employees in Bulgaria

Onboarding employees in Bulgaria involves several administrative and compliance steps. These include preparing compliant contracts, registering employees with relevant authorities, and arranging benefits and payroll.

When bringing a new employee on board, having a well‑defined onboarding workflow is crucial. A strong onboarding process typically includes the following core stages:

• Payroll and benefits setup: Register the new candidate in the appropriate payroll system and complete all mandatory benefit enrollments as per regional employment regulations.
• Technology provisioning and workspace readiness: Provide the employee with all required equipment, software, and system permissions ahead of their start date so they can begin working efficiently from day one.
• Structured first‑week orientation: Deliver a clear and engaging orientation during the initial week to introduce company policies, operational procedures, organizational values, and the responsibilities tied to the employee’s role.
• Introductions to teams and key stakeholders: Arrange introductions with the employee’s immediate team as well as relevant cross‑functional partners to support collaboration and help them integrate smoothly into the wider organization.

Payoneer Workforce Management enables companies to compliantly engage talent across borders through its technology platform, streamlining onboarding while maintaining compliance.

Pay employees in Bulgaria

Understanding how to pay employees in Bulgaria is essential for staying compliant with local payroll and tax requirements.

Payment is made in Bulgarian Lev (BGN), although from January 2026, the official currency in Bulgaria will be the euro. Salaries are typically paid on the last working day of the month, and the minimum monthly wage is BGN 1,077, while the minimum hourly wage is BGN 6.49.

Taxes and contributions

As part of the Bulgaria payroll process, employers are responsible for withholding and contributing applicable taxes and social charges. Bulgaria applies a flat individual income tax rate of 10% on all personal income earned in the country.

Public health insurance is mandatory and administered by the National Health Insurance Fund (NHIF), while social security contributions provide coverage for illness, maternity, work-related injuries, unemployment, pensions, and death benefits.

Managing Bulgaria payroll accurately is critical. Payoneer Workforce Management’s unified, all-in-one platform gives you a single dashboard to manage a global workforce.

Employment laws in Bulgaria

Bulgarian labor law provides strong protections for employees. Employers must comply with statutory working rules and employment standards.

A standard working week is 40 hours, and overtime hours are limited to:

• 3 hours daily across 2 consecutive days
• 6 overtime hours per week
• 30 overtime hours per month
• 150 overtime hours per year

Probation periods are not mandatory but are recommended and can last up to 6 months

You can get support to stay compliant with Bulgaria’s payroll and labor laws using Payoneer Workforce Management’s infrastructure.

Minimum wage in Bulgaria

The minimum wage in Bulgaria is set at a national level and applies to all employees. Minimum wage is BGN 1,077 per month and BGN 6.49 per hour.

Under Bulgarian labor law, employees are entitled to a mandatory Length of Service (LOS) increment, which increases gross salary by 0.6% of the base salary for each year of relevant experience. This applies to years worked in the same or a similar role with current or previous employers and must be reviewed and updated annually. Employers are legally required to increase gross pay as LOS accrues.

Employment contracts in Bulgaria

Employment agreements in Bulgaria must be provided in writing and clearly outline the key terms of the working relationship. 

Required details include:

• The employee’s work location
• The role and nature of the duties performed
• The date the agreement is signed and the employee’s official start date
• Whether the contract is fixed-term or indefinite
• Annual paid leave entitlements, including any additional leave
• Notice periods for ending the employment must be equal for both parties
• Gross monthly salary, any fixed supplements such as length of service pay, and how often wages are paid
• Standard working hours per day or week

Any changes to these terms may have to be communicated to the employee, typically in writing, within a month. 

Onboard talent quickly and securely with localized contracts and payroll using Payoneer Workforce Management.

Leave policy in Bulgaria

In Bulgaria, employers must offer leave, including vacation time, public holidays, sick leave, and more.

Vacation leave and public holidays

Employees are entitled to 20 working days of paid vacation leave after 4 months of service. Unused leave may be carried into the following calendar year, but must be taken by the end of June. Bulgaria also observes 12 public holidays each year.

Sick leave

Employees may take up to 180 days of sick leave. In cases of extended illness, sick leave may be prolonged following assessment by a Special Medical Commission (ТЕЛК).

Parental leave

Maternity leave in Bulgaria is 410 working days per child, with 45 days to be taken before birth. Fathers are entitled to 15 days of paternity leave after the child is born.

After maternity leave, childcare leave can be taken until the child turns 2 if they are not in childcare, and parents may also take up to 6 months of unpaid leave to care for a child under 8.

Other leave

Employees are also entitled to compassionate leave and wedding leave, both lasting 2 days each.

Work permit in Bulgaria

Work permit requirements depend on the employee’s nationality. EU citizens typically face fewer restrictions, while UK and non-EU nationals must follow specific immigration procedures.

Employers should consult official government guidance to confirm requirements. More information can be found on the Bulgarian Ministry of Innovation and Growth website.

Background check in Bulgaria

Employers in Bulgaria may conduct background checks before engaging talent. These can typically include:

• Address verification
• Criminal record checks
• Employment history verification
• Education verification
• Review of publicly available social media profiles

Employee consent may be required, and employers must disclose what checks will be performed. 

It is best to consult local legal guidelines before running any background checks in Bulgaria.

Employment termination in Bulgaria

Termination in Bulgaria must follow strict legal rules. Employers can end employment for valid reasons, but terminating without lawful grounds may be considered unfair dismissal and can lead to legal consequences. Termination is a complex process and should be handled carefully.

Termination scenarios include:

• Employee resignation
• Mutual agreement between the employer and the employee
• Termination during the probationary period
• Termination by the employer due to misconduct, performance issues, or unauthorised absence

Notice periods

During probation, notice periods are 30 days unless the contract states otherwise. After probation, indefinite contracts require 30 days’ notice and definite contracts require 3 months’ notice.

Severance pay

Employees are owed severance pay in the following circumstances:

• Closure or staff reduction requires 1 month of severance.
• Termination due to health issues after at least 5 years of employment requires 2 months’ severance.
• Retirement requires 2 months’ severance for under 10 years, or 6 months for 10 or more years.
• Termination by mutual agreement requires at least 4 months’ severance.

Company registration in Bulgaria

Registering a company in Bulgaria may make sense for businesses planning a long-term presence. Registration allows direct hiring and operational control but comes with administrative responsibilities.

Details on registration procedures can be found on the Bulgarian government website.

For companies seeking flexibility, a workforce management platform can be a quicker way to engage talent. 

Payoneer Workforce Management enables compliant onboarding and engagement of talent in 160+ countries without having to set up a legal entity.

PEO in Bulgaria

A PEO is designed to help you with HR and admin tasks for employees you already employ through your local entity.

While some countries allow the use of EORs, in Bulgaria, companies should use compliant workforce management solutions. These platforms help manage HR and compliance processes for companies without a local entity. This is invaluable for international companies seeking global talent.

Explore Payoneer Workforce Management services in Bulgaria

Working with a partner like Payoneer Workforce Management helps support global operations and access local talent.

Our unified platform offers assistance with:

• Onboarding and offboarding
• Payroll and taxes
• Local compliance
• Timesheets and more

Book a demo to find out more.

FAQs

1) Are EORs legal in Bulgaria?

EORs in Bulgaria may not be permitted. However, companies can use a workforce management platform to engage and manage talent compliantly.

Payoneer Workforce Management enables compliant onboarding and engagement of talent in 160+ countries without having to set up a legal entity. Stay compliant with local labor laws using Payoneer Workforce Management’s infrastructure. We assist in mitigating compliance and contractor misclassification risks.

2) How much does it cost to hire Bulgarian talent?

Employer costs are approximately 21.62% an annual salary of USD 60,000. Costs vary based on salary level and local factors. You can get a detailed employment cost breakdown for your needs using our cost calculator tool.

3) Why hire Bulgarian talent through a workforce management platform?

A workforce management platform, like Payoneer Workforce Management, allows businesses to engage and pay employees across the globe in 70+ currencies. Get in touch to learn more.