January 6, 2024
12 minutes read
BULGARIA AT A GLANCE
The employment legislation is closely linked to the labor laws of the European Union but still has some specifics. We have summarized the answers to the most common questions you may have. The information below is meant merely as a guideline, for informational purposes only, and should not be considered professional or legal advice.
CURRENCY
LEV (ЛВ., BGN)
TAXES & SOCIAL CHARGES
Employer: 18.92 %
PUBLIC HOLIDAYS
15
OFFICIAL LANGUAGE
BULGARIAN
WORK HOURS
40/WEEK
13TH / 14TH SALARY
N/A
EASE OF DOING BUSINESS
EASY
PAYROLL FREQUENCY
MONTHLY
VAT (VALUED ADDED TAX)
20%
EMPLOYMENT CONTRACT
Good to know: In Bulgaria, post-employment non-compete agreements are invalid and unenforceable.
WRITTEN FORM and REGISTRATION
An employment contract must be in writing in order to be valid. Any alteration to the employment contract must be made in writing; otherwise, an administrative penalty will be imposed.
TYPES OF CONTRACTS
An employment contract can be:
-
- Indefinite – A contract of employment is considered to be for an indefinite duration unless expressly agreed otherwise.
- Fixed term – Fixed-term contracts can be agreed upon for up to 3 years. Normally, the term cannot be less than one year, but it may be less than one year if the worker requests a shorter term in writing. In these cases, the contract may be renewed once, for not less than one year. It is also possible to have a fixed-term contract that is in effect until certain work is completed until an absent employee returns to work, or other conditions.
- Full-time or Part-time.
MANDATORY ELEMENTS
Employment contracts must identify
-
- Both parties
- Place of work (in office or remote)
- Job title and nature of the work
- Date of the contract’s conclusion
- Starting date for performance of the contract
- Duration of the employment contract (if applicable)
- Amount of basic and extended paid annual leave
- An equal period of notice to be observed by both parties upon termination
- Basic, length of service, and supplementary compensations
- Frequency of payment
- Nrmal working hours.
PROBATION PERIOD
The probation period is up to 6 months.
WORKING TIME
WORKING HOURS
The standard workweek in Bulgaria is eight hours per day, five days per week.
OVERTIME
Overtime is limited and only allowed in certain circumstances. It cannot exceed 3 hours per day (2 hours at night) over two consecutive days, 6 hours (4 at night) in a week, 30 hours (20 at night) in a month, and 150 hours in one year.
Overtime is paid at a rate of +50% for regular days; +75% for weekends; +100% for national holidays.
LUNCH BREAK
Lunch break is a minimum of 30 minutes but most commonly is 1 hour. It is not included in the 8 working hours.
SHORT BREAKS
They depend on the work specifics but most commonly are 2 breaks, 15 minutes each. The short breaks are included in the 8 working hours.
NIGHT SHIFTS
Night shifts in Bulgaria are the work performed between 10.00 p.m. and 6.00 a.m.
Each hour of the night shift is paid with an increase agreed upon between the employee and employer but not less than 0.15% of the minimum wage.
ON-CALL
For the time during which the employee is on-call and is located outside their working place, additional remuneration is paid for each hour or part thereof amount not less than BGN 0.10. Usually, a higher rate is agreed.
The actual work performed during the on-call (in case of need for such performance) shall be reported and paid as overtime work.
Time off
PAID TIME OFF (PTO)/VACATION
Each year an employee is entitled to receive basic paid annual leave of at least 20 days per year. Longer periods of annual leave can be agreed to in an individual employment contract.
Employees must use their annual paid leave (at once or in parts) within the relevant calendar year.
SICK LEAVE
The employer pays 70% of the gross salary for the first two days of illness. National Social Security Institute (NSSI) provides 80% of the gross salary up to maximum social security income from the fourth day of sickness until full recovery.
The employee needs to provide a sickness leave document from a medical practitioner within 2 days of issue and the employer must register this document to the NSSI. The deadline for this is the 10th date of the following month after the sick leave documents are presented by the employee
PREGNANCY AND MATERNITY LEAVE
Female employees receive 410 days of maternity leave in Bulgaria with 45 days to be taken before the birth. During that period they are paid 90% of the maximum social security income (capped at 3’7500.00 BGN). This income is paid by the government, not the employer.
A female employee who adopts a child two years old or younger is entitled to leave as well.Maternity leave can be extended up to the second year of the baby. The pay is reduced to BGN 780 again paid by the government.
PARTNER/PATERNITY LEAVE
The father or male partner of a child’s mother, whether biological or adoptive, receives 15 days of paternity leave and can use any of the mother’s unused maternity leave after the child is six months old.
The Partner/Paternity leave is paid at 90% of the gross salary up to the maximum social security income of BGN 3’750.00. It is paid by the NSSI.
MARRIAGE LEAVE
In the event of their marriage employees are entitled to paid leave for 2 days.
BEREAVEMENT LEAVE
Employees are entitled to 2 days of leave to attend the funeral of a family member.
BLOOD DONATION
Employees are entitled to 2 days of leave if donate blood: on the day of the donation and the next day.
PUBLIC (Bank) HOLIDAYS
Good to know: If the public/bank holiday falls on a weekend, the following working day becomes a paid holiday.
NEW YEAR’S DAY
1 JANUARY
LABOUR DAY
1 MAY
UNIFICATION DAY
6 SEPTEMBER
LIBERATION DAY
3 MARCH
ST GEORGE’S DAY
6 MAY
INDEPENDENCE DAY
22 SEPTEMBER
ORTHODOX EASTER
Friday – Monday
CULTURE AND LITERACY DAY
24 MAY
CHRISTMAS
24 – 26 DECEMBER
COMPENSATION
PAY CYCLE
Salaries are paid on a monthly basis. Payday is agreed between the employer and employee. Most commonly the paydays are between the fifth and tenth days of the month for the previous one. For example, salaries for April are to be paid between 5 and 10 May.
LENGTH OF SERVICE PAY
In Bulgaria, there is additional pay once an employee’s length of service and professional experience exceeds one year (with their current employer and in the same or in a similar position with a previous employer).
This additional pay amounts to at least 0.6% per year of service and professional experience.
When making a salary offer in Bulgaria, the most common practice is to include the length of service pay in the total (gross) amount.
For example, total (gross) amount = base salary + length of service pay.
MINIMUM WAGE
The general minimum wage in Bulgaria is BGN 933.
HEALTH INSURANCE
Bulgaria has national health care. Private health care and insurance are available.
TAXES & SOCIAL SECURITY CHARGES
CHARGES FOR EMPLOYEE (13.78%)
-
- 8.38% – State Social Insurance contributions (disability, disease, maternity, pension)
- 2.20% – Supplementary Mandatory Pension Insurance
- 3.20% – Healthcare contributions (mandatory medical insurance)
CHARGES FOR EMPLOYER (18.92%)
-
- 10.92% – State Social Insurance contributions (disability, disease, maternity, pension)
- 2.80% – Supplementary Mandatory Pension Insurance
- 4.80% – Healthcare contributions (mandatory medical insurance)
- 0.4 %- Accident at Work and Occupational Diseases Fund (0.4 – 1.1% but 0.4% is the most common)
CAP
The social security charges/contributions are based on the gross salary of the employee but are capped to a monthly maximum of BGN 3’750.
INCOME TAX - 10% FLAT RATE
Personal income tax is taken from the gross salary minus all social charges/contributions.
EMPLOYMENT TERMINATION
Good to know: Termination of employment is heavily regulated by the Labor Code and the law is in favour of the employee.
NOTICE PERIOD
It is agreed upon in the contract and can be up to 3 months. The notice period should be kept or paid out. For example, if an employee has a 2-months notice period but wants to leave in 1, they have to pay the second month to the employer. This is valid for the employer, too.
Employees on fixed-term contracts may be terminated with three months of notice, or the remaining time before the expiration of the contract, whichever is sooner.
RESIGNATION
The employee is entitled to terminate the contract at any time with prior written notice. The notice period is 30 days unless the parties have agreed on a longer period, but not longer than three months. A fixed-term employment contract may be terminated with 3 months’ written notice, but not more than the remainder of the term of the contract. The notice period begins to run on the day succeeding the receipt of the said notice. It should be either observed or bought out by the employee.
TERMINATION INITIATED BY THE EMPLOYER
Employers face significant complexity in managing any form of termination, as there are so many specific types of terminations specifically outlined in the Labor Code and other employment laws. Each type required heavy documentation. As the legislation is in favour of the employee, even a small miss in the required process or documentation will cancel the termination. Therefore, we strongly recommend seeking legal advice for terminations outside of the probation period.
PROTECTION FROM TERMINATION
The employment of the following could only be terminated with prior approval by the Labor Inspectorate (chances to obtain such is really low). However, the protection is not applicable during the probation period:
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- Â Mothers of children under the age of 3
- Pregnant women or women in the process of IVF
- Certain sick employees
- Employees using any kind of time off
- Employee in occupational rehabilitation
- Employees who are elected as an employees representative
MUTUAL AGREEMENT
The party who has been approached with the offer is obligated to take a stand on the said offer and to inform the other party within 7 days of receipt. If fails to do so, it is considered that the proposal is rejected. We strongly recommend this option for employment termination as it is with lower litigation risk.
MUTUAL AGREEMENT WITH SEVERANCE
An employer in Bulgaria may offer to terminate an employment contract in exchange for a severance payment. If the worker accepts the offer, the employer is obliged to pay severance in the amount no less than four times his last gross monthly salary.