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Starting a Business in Bulgaria

Bulgaria Employment Laws: A Complete Guide for Employers

Bulgaria is an upper middle-income country with over 70% of Gross Domestic Product contributions from the private sector. The European nation targets foreign investments in strategic sectors like energy, automotive, and life sciences. The lower labor costs and government incentives make Bulgaria the most famous outsourcing destination in Southeastern Europe. 

However, the convenience of managing the workforce per the local laws remains the biggest challenge in compliant global expansion. Thankfully, our detailed overview of the labor code in Bulgaria will help global employers or international companies decide on their compliance strategy for expansion in the Balkan nation.

Here are the most relevant statutory employer obligations per the Bulgarian employment rules:

  • Minimum legal wage (approx. $429 as on January 1, 2023)
  • Standard working time is 40 hours per week
  • Minimum of 20 working days of annual paid leave
  • Deduct mandatory payroll contributions from employers at approximately 33.4% of employee salary
  • Provide a minimum notice period of 30 days before contract termination 

Continue reading this page to frame suitable policies on the duration of daily work, holiday entitlements and leave schemes, minimum wage, payroll obligations, dismissal rules, employee data privacy, and more. 

Applicability of the Act

Bulgarian labor law applies to all resident employees, including foreign nationals employed in Bulgaria. However, independent contractors, self-employed individuals, or freelancers do not enjoy statutory employment rights (like maximum working time, holiday entitlements, dismissal rules, etc.) under the labor code in Bulgaria. 

Further, all shareholders and registered managers of a Bulgarian legal entity are not covered under the Bulgarian employment rules but under civil and commercial law. 

Employment Contract

Bulgarian employment law stipulates employers conclude written contracts for setting up a valid employment relationship. Further, the employers must notify the National Revenue Agency (NRA) within three days of negotiating the contract.

Employers can draft employment contracts in any language (English or Bulgarian) but must include the following information:

  • Identity of both parties 
  • Place and conditions of the work
  • Employment position and job description
  • Duration of the employment
  • Working hours
  • Conditions of the work
  • Termination/dismissal clause
  • The notice period for employment termination
  • Leave entitlements, salary details, payment schedule, and other benefits

Key Provisions of the Act

Bulgarian labor law codifies the main aspects of the employee-employer relationship per the following: 

  • Legal bases for the establishment of the employment relationship
  • Supervisory measures for employer compliance with the employment legislation and administrative and financial liability
  • Special protections for specific categories of employees
  • Bulgarian employment law provisions issued by the Council of Ministers and other authorities.

The following sections deal with key provisions prescribed under the labor code in Bulgaria. 

Working hours 

The standard working hours per Bulgarian labor law are capped at 40 hours a week or eight hours a day over a five-day workweek. The latest amendment made to labor act rules in Bulgaria mandates employers to include time spent participating in a training program in working hours. Bulgaria’s working hours law allows employers to introduce the following alternative schedule:

  • Flexible working time arrangements
  • Open-ended working time arrangements
  • Part-time working arrangements
  • Shift work

Employers must provide a written refusal of flexible working request within 14 days of receiving it from a particular category of employee. However, the labor code in Bulgaria obliges employers to the following  working hours restrictions: 

  • Extended working time up to 48 hours a week but not more than 20 consecutive days. Additionally, it is restricted to overall 60 working days annually.
  • Employers must not exceed working hours, including overtime beyond 40 hours a week for employees below 18.
  • Employers may reduce daily working hours to six-seven hours for minors or employees in high health-risk positions. 
  • Employers must limit working time to seven hours per day and 35 hours per week for employees performing more than four hours of night work. 
  • Employers cannot ask pregnant employees or minors to take up night shift work. 
  • Overtime is generally set at 150 working hours annually and extendable to 300 annual working hours if collective bargaining agreements allow.

Overtime compensation

  • Overtime work is only allowed under certain specified conditions and must be suitably compensated at a premium rate. 
  • Such specified conditions can include work requiring more than the standard working time or intensive seasonal work.

Overtime work

Overtime pay (premium over standard hourly rate)

Normal business day


Employee’s day off


National holiday or on an entitled annual leave


Holiday entitlements

Bulgarian labor code establishes 14 public holidays in a year:

  • 1 January: New Year’s Day
  • 3 March: Liberation Day
  • 1 May: International Workers’ Day 
  • 6 May: Saint George’s Day
  • 24 May: Bulgarian Education and Culture and Slavonic Literature Day 
  • 6 September: Unification Day
  • 22 September: Independence Day
  • 24 December: Christmas Eve 
  • 25 & 26 December: Christmas Day
  • Four Easter Holidays: Good Friday, Holy Saturday, Easter Sunday, and Monday per the calendar year

Further, the labor act rules in Bulgaria mandate employers not to include public holidays in the calculation of annual paid leave. 

Leave schemes

Annual paid leave (vacation)

Bulgarian employment rules prescribe a minimum of 20 working days of annual paid leave. 
Employers may extend the annual leave benefits to employees who have worked for at least four months.
Employers may allow employees to use unused annual leaves for up to two years. The labor regulations in Bulgaria do not prescribe monetary compensation for unused annual leave during employment. 

Maternity leaves

Employers may provide statutory entitlements under maternity leave in Bulgaria for a minimum of 58.6 weeks off or 410 days. 
Employers may divide the statutory 135 out of 410 days of leave entitlements into the following periods:
1. Maternity leave of 45 days before the due date
2. 42 days immediately after childbirth
3. 48 days of additional rest period
Employers may seek a written application from the employee along with the birth certificate of the child for extending 275 days of remaining statutory maternity leave per Bulgarian labor law.
Employers must ensure employee contribution for a minimum of 12 months to cover 90% of full salary through the National Health Insurance Fund during maternity leave in Bulgaria.

Paternity leaves

Bulgarian labor code mandates 15 days of paid leave for male employees whose spouse has given birth to or adopted a child. 
The labor code in Bulgaria adds additional paternity leave benefits. Employers must also provide two months of leave to raise a child under eight. 

Other leaves

Employers may offer other unpaid leave (like marriage leave or bereavement leave, etc.) in addition to the statutory leave at their discretion. The labor act rules in Bulgaria prescribe up to 30 working days per year of unpaid leave. 

Sick leave

Bulgarian labor law stipulates up to 18 consecutive months of paid sick leave. 
Employers must cover 70% of employees’ salary for the first three days of sick leave. 
Employers may ensure employee contribution for at least six months to cover salary payments from day four of sick leave through the National Health Insurance Fund. 

Parental leave

Employers must extend up to six months of unpaid parental leave for raising a child until eight years of age.
Shared paternity leave in Bulgaria of up to five months is applicable for childcare.  
The labor code in Bulgaria also obliges employers to grant up to 12 months of unpaid parental leave to employed guardians.  

Sabbatical leave

Bulgarian employment rules mandate employers to extend study leaves for preparation or to take an exam, including doctoral studies.

Minimum wage

  • The labor code in Bulgaria mandates employers to pay salaries over and above the minimum wage standards. 
  • Effective January 1, 2023, the new minimum wage in Bulgaria is 398.8 Euros per month. 

Payroll tax & other obligations

Employers may calculate payroll tax in Bulgaria based on the following:

  • Gross Salary – Mandatory Social Security Contributions – Statutory Income Tax deduction = Net Salary
  • Employers must withhold personal income tax at a flat rate of 10% from the gross salary. 
  • The employment law in Bulgaria guides employers to split mandatory social security contributions between the employer and employee in the ratio of 60:40, respectively.

Mandatory contributions

Employer contributions from gross salary

Employee contributions from gross salary

Social Security



Health Insurance



Accident at Work & Occupational Illness Fund

0.40% – 1.10%


Employers must also remit the deducted social security contributions and income tax to the National Revenue Agency on each employees’ behalf.

Further, the employers must suitably compensate employees in the following cases:

  • Discrimination in hiring or unlawful non-admission 
  • Failure to provide notice for termination of the contract 
  • Unjust dismissal of an employee
  • Temporary suspension from work
  • For any other damages caused by the employer
  • Undertaking business trips
  • Rehabilitation reassignment 
  • Natural disasters


  • Employers may provide online payslips including details on base salary, hours of attendance, overtime pay, and various tax and social security deductions. 
  • Bulgarian labor act rules mandate employers to archive payroll reports for up to 50 years. 

Termination of the employment relationship

  • The employment law in Bulgaria for termination stipulates employers have a just reason for termination and provide a notice period before ending the contract. 
  • Bulgarian labor code established just reasons for termination, relating to
  • Business restructuring or economic reasons 
  • Skill competence of the employee 
  • Adapting to the job position’s dynamic requirements
  • Employee reaching retirement 
  • Bulgarian employment rules prescribe a minimum of 30 days of notice period for terminating an indefinite-term employment contract. 
  • Further, the employment law in Bulgaria allows the termination of a contract with immediate effect on the grounds of gross misconduct or failure to follow a disciplinary procedure. 
  • The labor code in Bulgaria allows employees to terminate the employment contract without a just reason. 
  • Employers must compensate accordingly upon the termination of the employment relationship: 
  • Make suitable payments for unused annual leave
  • Make severance payments varying between one-seven months’ gross salary
  • Bulgarian employment law for termination also allows for mutually ending the contract with or without the payment of compensation (at least four months’ wages) from the employer. 

Data protection and employee privacy

Bulgarian employment law stipulate employers seek written consent to collect, process and store employee personal data for various employment purposes (background checks, payroll tax obligations, recording attendance, etc.) 

Further, employers should implement diversity and inclusion programs (for hiring purposes) only after analyzing the complex interaction among the applicable anti-discrimination, data protection, and Bulgarian labor law requirements. 


  • Employers must ensure compliant hiring based on the Protection from Discrimination Act (PDA), otherwise could lead to an administrative fine or sanction.
  • Failure to notify the relevant regional office of the National Revenue Agency within seven days may invite a fine from BGN1,500 up to BGN15,000.
  • Failure to consult employees about major workplace changes or safety obligations may result in a fine from BGN1,500 up to BGN15,000.

Compliance Strategies for Employers

The following compliance strategies may work best for most employers, from startups to enterprises, to hire and manage employees per the Bulgarian labor act rules.

Developing an in-house HR team:

  • Employers may continue with a traditional approach of developing an in-house HR team that specializes in Bulgarian labor law to look after hiring and managing employees, payroll calculations, employee appraisals, employee training, etc.
  • A dedicated HR manager proves to be most useful in dealing with employees during organizational changes. 

Employment documents based on standard templates/third-party:

  • Bulgarian employment rules prescribe certain necessary information to be disclosed in all employment documents. 
  • Employers with a registered entity in Bulgaria but a small management team can follow the standard template to hire and manage employees. 
  • Employers may draft basic employment documents like offer letters, employment records, and termination notices to stay compliant with the labor code in Bulgaria. 
  • A better alternative would be to partner with a Professional Employer Organization (PEO) to hire and manage employees more efficiently. 

SaaS-based payroll providers

  • Contemporary global companies manage local talents from Bulgaria even without establishing a business entity through Employer Of Record (EOR) platforms. 
  • Such platforms may enter into employment contracts, calculate statutory deductions and pay salaries on each employer’s behalf per the labor code in Bulgaria.

How Can Multiplier Help?

Multiplier provides industry-best EOR solutions and PEO solutions for businesses to ensure a compliant global expansion in over 150+ countries.  Using Multiplier, entrepreneurs and global companies can automate the drafting of employment documents, generate employment contracts in English, Bulgarian, or any other language, and payroll management – calculate and deduct taxes, social contributions, and more, per the Bulgarian labor code.

Frequently Asked Questions

Major employment-related proposals for reform in Bulgaria include regulating whistleblowing protection and rules governing remote working.

The personal data protection and employee privacy laws in Bulgaria are strict. However, Bulgarian labor law allows employers to monitor, access, and review their employee’s electronic communications at the workplace upon written consent.

Employers need not worry about arranging work permits as foreign employees from the European Union do not require Certificate A1 to work in Bulgaria. Employers can employ Non-EU citizens with valid work permits from the National Employment Agency.

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