Employer of Record in Bulgaria

An Employer of Record in Bulgaria acts as the legal employer for your workers, handling payroll, tax filings, and Labour Code compliance on your behalf.

The specific compliance requirements are demanding. An EOR in Bulgaria must register employees with the National Revenue Agency within three days of contract signing, manage social security contributions, and sponsor work permits for non-EU nationals under Bulgarian immigration rules.

• Hire in days through an EOR rather than waiting weeks or months to incorporate a local entity.
• Total employer contributions run between 18.92% and 19.62% of gross salary per month.
• The legal minimum notice period is 30 days; 90 days is the customary standard in practice.
• Bulgaria's minimum wage rises to 1,213 BGN per month effective 1 January 2026.

This page covers employment contracts, payroll contributions, statutory leave, termination rules, and how to choose the right hiring path for Bulgaria.

Gloroots provides Employer of Record services in Bulgaria. This guide is written to help HR, Finance, and Operations teams assess their options and find the right employment structure for their needs.

What Is an Employer of Record in Bulgaria?

An Employer of Record in Bulgaria is the registered legal employer under Bulgarian law, assuming all statutory obligations: Labour Code compliance, payroll tax filing, and social security registration with the National Revenue Agency and the National Social Security Institute. To understand how does EOR work in practice, the model separates legal employment from day-to-day management.

Foreign companies use an EOR when they want to hire in Bulgaria without a local entity, test the market, or convert existing contractors to compliant employees.

In practice, the client selects the candidate, and the EOR issues a compliant Bulgarian employment contract, registers the employee with the NRA and NSSI, runs monthly payroll, administers statutory benefits including sick leave and annual leave, and the client retains full control over the employee's daily work and output.

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Your Hiring Options in Bulgaria: EOR vs. Entity vs. PEO vs. Contractor

Companies hiring in Bulgaria can choose from four paths: an EOR, a wholly owned Bulgarian entity, a PEO arrangement, or an independent contractor engagement. Each path carries different setup timelines, compliance ownership, and cost structures. Gloroots EOR services cover the entity-free employment path.

An EOR and a direct contractor engagement are the fastest options. Registering a Bulgarian entity or working with a PEO requires more groundwork or an existing legal presence in the country.

A PEO operates on a co-employment model and requires the client to already hold a registered Bulgarian entity. An EOR does not. That distinction matters most when speed of market entry is a priority.

Bulgarian entity types include the EOOD (single-member LLC), OOD (multi-member LLC), and EAD or AD (joint-stock company). All require Commercial Register filing and committed capital before operations can begin.

How to Hire in Bulgaria Through an EOR: Step by Step

Hiring through an EOR in Bulgaria follows a defined sequence. Each step below covers a decision or action your team takes before the employee's first working day.

Step 1: Decide Between EOR and Entity

Assess your hiring volume and timeline before committing to a path. If you plan to hire one to five people in Bulgaria over the next six to twelve months, an EOR gives you compliant employment in days. Registering a Bulgarian entity through the Commercial Register takes weeks to months and requires committed capital, ongoing accounting, and a local registered address. Reserve entity incorporation for long-term, large-scale operations where the fixed overhead is justified by headcount.

Step 2: Select and Vet an EOR Provider

Confirm that the provider holds its own registered Bulgarian legal entity rather than relying on a local partner network. A partner-network model adds a layer of contractual risk and can slow NRA and NSSI registration. Verify the provider's Labour Code expertise, check that it can register employees with the National Revenue Agency within the mandatory three-day window, and confirm it has experience managing social security filings with the National Social Security Institute. Ask for references from clients who have hired in Bulgaria specifically.

Step 3: Draft a Compliant Employment Contract

The EOR issues a written employment contract that satisfies Bulgarian Labour Code requirements. The contract covers the employee's role, compensation in BGN, working hours (8 hours per day, 40 hours per week), notice period, leave entitlements, and termination terms.

Contracts may be drafted in English or Bulgarian. Both versions carry equal legal weight under Bulgarian law. The EOR retains a signed copy and files it as required before the employee's first working day.

Step 4: Register Statutory Requirements and Onboard

Within three days of contract signing, the EOR notifies the National Revenue Agency (NRA) as required by Bulgarian law. The EOR also registers the employee with the National Social Security Institute (NSSI) to activate statutory benefit coverage.

For non-EU nationals, the EOR applies for a work permit from the National Agency for Employment. This process typically takes three to four weeks and must be completed before the employee begins work.

Once registrations are confirmed, the EOR completes all onboarding documentation, including tax forms, benefit enrollment, and internal employment records.

Step 5: Run Compliant Monthly Payroll

The EOR processes payroll in BGN each month. It withholds the flat 10% personal income tax from each employee's gross salary and deducts the employee's social security and health insurance contributions (totalling 13.78% of gross salary).

The EOR also remits employer-side contributions, which range from 18.92% to 19.62% of gross salary depending on the applicable accident-at-work fund rate. All filings are submitted to the NRA on the statutory deadline each month.

Step 6: Manage Offboarding and Exit

The EOR issues a written termination notice to the employee. The statutory minimum notice period is 30 days, though 90 days is the customary standard in Bulgaria. The EOR applies whichever period the employment contract specifies.

Where severance applies, the EOR calculates the payment at a minimum of four months' gross salary and disburses it within seven days of the termination date. The EOR then processes the final payroll run, covering all outstanding salary, accrued leave, and any other entitlements.

Once final payments are settled, the EOR deregisters the employee with both the NRA and the NSSI, closing all statutory obligations on the employer's behalf.

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How to Choose the Right EOR in Bulgaria

Selecting an EOR provider in Bulgaria requires evaluating several operational and legal criteria before signing a contract. Use the criteria below to compare providers objectively. For a broader comparison across global providers, see the best employer of record guide.

Local Legal Knowledge and Own Entity

Verify that the provider operates through its own registered Bulgarian legal entity. A provider that relies on a local partner or reseller cannot act as the legal employer under the Bulgarian Labour Code.

Using an intermediary creates compliance risk: the employment relationship may not be legally valid, and liability for payroll taxes, social contributions, and termination obligations can fall back on your company. A provider with a direct Bulgarian entity removes that risk entirely.

Support Model and Response Time

Confirm whether the provider assigns a dedicated in-country HR and legal contact for Bulgaria, not a shared regional queue. Bulgarian employment queries often involve the National Revenue Agency (NRA) and the National Social Security Institute (NSSI), and your provider should handle those interactions directly.

Ask whether support is available in both Bulgarian and English. Providers that rely solely on English-language support create delays when local authorities require documentation in Bulgarian. Verify expected response times for routine queries versus urgent compliance issues before signing.

Pricing Transparency

EOR fees in Bulgaria typically range from $200 to $700 per employee per month. Some providers charge a flat monthly fee; others charge a percentage of gross salary. Both models exist, and neither is inherently better. What matters is knowing exactly what each model covers.

Request a full breakdown of what is included in the base fee and what is billed separately. Common add-ons include statutory filing fees, benefits administration, and offboarding support. Review Gloroots' pricing page to compare what is covered under each plan before committing to a provider.

Security and Data Compliance

Bulgaria is an EU member state, so GDPR applies to all employee data processing. Any EOR operating in Bulgaria must comply with GDPR requirements covering data collection, storage, access controls, and breach notification timelines.

Ask your provider where employee data is stored and whether data residency is within the EU. Confirm that the provider holds a valid Data Processing Agreement (DPA) and can demonstrate its GDPR compliance posture through documentation or audit reports. Providers that cannot produce these on request introduce regulatory risk to your employment operations.

Integration Capability

Check whether the provider's platform connects directly with your existing HRIS, expense management, and equity tools. Without native integrations, payroll data, expense approvals, and equity grants require manual reconciliation across systems.

Manual reconciliation increases error rates and slows monthly close cycles. Ask the provider for a list of supported integrations and whether API access is available for custom connections. Platforms that support centralized data flows reduce operational overhead as your Bulgarian headcount grows.

Workforce and Talent Pool in Bulgaria

Bulgaria has a workforce of approximately 3 million, with a median age around 44. Sofia University and the Technical University of Sofia produce a consistent pipeline of STEM and IT graduates each year.

Key talent hubs include Sofia, Plovdiv, Varna, and Burgas. IT/software, BPO, manufacturing, and financial services are the dominant industries.

Work culture in Bulgaria is traditionally hierarchical, though the tech sector has shifted toward more collaborative structures. English proficiency is high among professionals under 40, particularly in IT and BPO roles. Labor costs remain among the lowest in the EU, which makes Bulgaria a practical option for cost-conscious market entry. Companies hiring across Central and Eastern Europe may also want to review employer of record Poland for comparison.

Workforce snapshot

Employment Law Essentials in Bulgaria

Employment Contracts

Fixed-term contracts in Bulgaria may not exceed three years. The contract must state a clear duration and the conditions that apply.

Probation periods are capped at one month for fixed-term contracts shorter than one year. For indefinite contracts, the maximum probation period is six months.

Working Hours and Overtime

Night work runs from 10 p.m. to 6 a.m., with a maximum of seven hours per day and 35 hours per week. Additional pay is required for night shifts.

Employees are entitled to a 30-minute lunch break (Art. 151), 12 hours of daily rest (Art. 152), and 48 hours of weekly rest (Art. 153).

Minimum Wage

Bulgaria's minimum wage is 1,213 BGN per month (approximately EUR 620), effective 1 January 2026 under Council of Ministers Decree No. 243 of 13 November 2025. The minimum hourly rate is 7.31 BGN.

Social security contributions are capped at the maximum monthly insurable income of 4,600 BGN for 2026. Amounts above this threshold are not subject to social security deductions.

Leave and Statutory Benefits in Bulgaria

Bulgarian law sets minimum leave entitlements across several categories. The rules differ by employee type, and some groups receive extended protections under the Labour Code.

The table below summarises the main leave types, entitlements, pay rates, and key conditions.

Annual Leave

All employees in Bulgaria are entitled to a minimum of 20 working days of paid annual leave per year.

Protected categories receive more than this minimum. These include employees under 18, disabled employees, and employees working in special or hazardous conditions.

Sick Leave

Employees in Bulgaria can claim up to 18 months of paid sick leave. A medical certificate must be submitted within 48 hours of the onset of illness.

Maternity and Paternity Leave

For adoption, parents receive 365 days of leave from the date of adoption for a child up to five years old. The leave does not extend beyond the child's fifth birthday and is paid by the National Social Security Institution (NSSI).

Public Holidays

Bulgaria observes 14 public holidays per year. Work performed on a public holiday is compensated at 200% of the employee's standard salary.

Payroll, Tax and Statutory Contributions in Bulgaria

Payroll in Bulgaria runs monthly. The employer withholds income tax and remits all social security contributions directly to the National Revenue Agency (NRA).

The 2026 social security contribution ceiling is 4,600 BGN per month. Income above this cap is subject only to the flat 10% income tax and not to social security contributions. Any reference to the previous cap of 3,400 BGN is outdated and must not be used for current compliance calculations.

Employer contributions

Employee contributions

Corporate tax is a flat 10% on taxable profit. Withholding tax on Bulgarian-source income paid to non-residents is 10% for interest, royalties, and rent. Dividends and liquidation proceeds are taxed at 5%. VAT is 20% standard, with a reduced rate of 9% for hotel accommodations.

Work Visas and Permits in Bulgaria

Bulgaria issues three main visa types for non-EU nationals: Visa A for airport transit, Visa C for short stays, and Visa D for long-stay purposes including work, residence, and study.

The EOR or local employer sponsors the work permit and submits the application to the National Agency for Employment. Processing takes three to four weeks. A confirmed job offer is required before a work permit can be issued. Visa D also requires a mandatory personal interview and supporting documents including a valid passport, medical insurance, and travel tickets.

Misclassification Risk in Bulgaria

Classifying an employee as an independent contractor under Bulgarian civil or commercial law, rather than the Labour Code, exposes the company to significant legal and financial penalties.

Bulgarian authorities assess the following criteria when determining whether a worker is misclassified:

• The contractor performs work under the employer's direction and control.
• The contractor works fixed hours set by the company.
• The contractor uses company equipment and infrastructure.
• The contractor's work is integral to the company's core business operations.

Companies found to have misclassified workers face the following consequences:

• Back-payment of all social security and health insurance contributions for the full misclassification period.
• Back-payment of income tax that should have been withheld at source.
• Labour Code penalties and fines imposed by the General Labour Inspectorate.
• Potential criminal liability for systematic misclassification.

An EOR makes the EOR the legal employer under the Labour Code from day one, removing misclassification risk entirely.

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Hiring, Onboarding, Termination and Offboarding in Bulgaria

Onboarding

• Before day one: Gloroots prepares a Labour Code-compliant employment contract and collects required employee documentation. NRA notification is filed within the mandatory three-day window. Work permit applications for non-EU nationals are submitted to the National Agency for Employment.
• Day one: The employee receives a signed contract copy and statutory benefit enrollment confirmation. Payroll is configured with correct social security and health insurance contribution rates. The employee is registered with NSSI and the NRA.
• First week: Gloroots confirms payroll schedule and BGN payment details with the employee. Statutory leave entitlements, including 20 days annual leave, are communicated in writing. Any probation period terms are documented per Labour Code requirements.
• Beyond: Gloroots monitors regulatory changes, including contribution ceiling updates, and adjusts payroll configurations accordingly. Ongoing compliance with NRA filing deadlines is tracked centrally. Employees receive payslips and benefit statements each pay cycle.

Termination

Termination notices in Bulgaria must be submitted in writing to the relevant government authorities. The legal minimum notice period is 30 days, though 90 days is standard practice under most employment contracts.

Offboarding

• Settlement: Final payroll is processed and severance is calculated at a minimum of four months gross salary where applicable. All BGN payments are disbursed within seven days of the termination date, as required by Bulgarian Labour Code.
• Documents: Gloroots issues an employment certificate confirming the employee's tenure, role, and compensation history. Tax clearance documentation is prepared and provided to the departing employee for NRA compliance purposes.
• Exit: The employee is deregistered from both the NRA and NSSI within the statutory timeframe. Company equipment is returned and access credentials are revoked according to the offboarding checklist. All records are retained per Bulgarian data protection requirements.

What's New: Recent Regulatory Changes in Bulgaria

Council of Ministers Decree No. 243 of 13 November 2025 raised the statutory minimum wage to 1,213 BGN per month (EUR 620) and the minimum hourly rate to 7.31 BGN, effective 1 January 2026.

• The minimum wage increase from 933 BGN to 1,213 BGN per month requires payroll system updates to be completed before 1 January 2026 to remain compliant.
• The 2026 social security contribution ceiling rises to 4,600 BGN per month from 3,400 BGN, directly affecting payroll calculations for higher-earning employees.
• Bulgaria continues its EUR adoption process. Employers should monitor the BGN/EUR peg and any confirmed currency transition timeline from the Bulgarian National Bank.
• GDPR enforcement by the Commission for Personal Data Protection (CPDP) remains active. EOR providers must maintain current and compliant data processing agreements covering employee records.

Employers must update payroll configurations and contribution calculations before 1 January 2026 to avoid NRA penalties and ensure accurate filings.

Costs and Financial Planning for Hiring in Bulgaria

Total employment cost in Bulgaria extends beyond gross salary. Employer contributions add between 18.92% and 19.62% on top of salary, applied to earnings up to the 4,600 BGN monthly ceiling from 2026.

Additional costs include the employer of record cost, typically $200 to $700 per employee per month, plus one-time onboarding costs and work permit fees for non-EU nationals. Work permit processing takes three to four weeks through the National Agency for Employment. Severance liability of a minimum four months gross salary applies on qualifying terminations and must be factored into workforce planning budgets.

Common Challenges and How Gloroots Solves Them in Bulgaria

Hiring in Bulgaria presents practical compliance challenges beyond payroll. NRA deadlines, work permit timelines, and contribution ceiling changes all require active monitoring and timely action from the employing entity.

Why Gloroots Is a Strong EOR Partner in Bulgaria

Gloroots suits companies that need to hire in Bulgaria quickly without establishing a local entity, particularly EOR for startups, EOR for mid-market companies, and EOR for enterprises testing the Bulgarian market.

Country-specific strengths include a Bulgarian legal entity, automated NRA and NSSI registration, real-time payroll updates for regulatory changes such as minimum wage and contribution ceilings, and work permit management for non-EU nationals.

Gloroots manages the full Employment Lifecycle Management cycle: contract, payroll, benefits, and offboarding, all governed under the Bulgarian Labour Code.

The platform is well suited for companies converting Bulgarian contractors to employees, scaling distributed teams, or integrating Bulgarian workforces after an acquisition.

Buyers should evaluate whether Gloroots' pricing, entity structure, and integration capabilities match their specific Bulgaria hiring volume and timeline before committing.

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Conclusion

Bulgaria's flat 10% income tax, low labor costs, and EU membership make it one of the most cost-effective markets in Europe for remote hiring.

Companies evaluating Bulgaria should confirm their payroll configurations reflect the 1,213 BGN minimum wage and 4,600 BGN social security ceiling effective 1 January 2026 before making their first hire. An EOR accelerates that readiness. Companies considering other EU locations can also review the employer of record Germany guide for comparison.

Frequently Asked Questions About Employer of Record in Bulgaria

Is using an Employer of Record legal in Bulgaria?

Yes. Using an EOR is fully legal in Bulgaria. The EOR becomes the legal employer of record under the Bulgarian Labour Code, signing employment contracts and handling all statutory filings.

The client company retains day-to-day direction of the employee's work. This structure is recognized by Bulgarian labor and tax authorities, including the NRA and NSSI.

How much does an EOR in Bulgaria cost?

EOR fees in Bulgaria typically range from a flat monthly fee per employee to a percentage of gross salary. Providers vary, so comparing structures matters.

Employer statutory contributions add approximately 18.92% to 19.62% on top of gross salary. Reviewing employer of record cost breakdowns before signing helps avoid budget surprises.

How quickly can I hire an employee in Bulgaria through an EOR?

Most EOR providers can onboard an employee in Bulgaria within five to ten business days, assuming documentation is complete.

The NRA requires notification within three days of contract signing. An EOR handles that filing automatically, keeping the hire legally compliant from day one.

What is the difference between an EOR and a PEO in Bulgaria?

A PEO co-employs workers alongside your entity, which means you still need a registered Bulgarian legal entity to use one.

An EOR employs workers directly through its own Bulgarian entity. You do not need a local entity. This distinction matters for companies entering Bulgaria without an established presence.

Can an EOR in Bulgaria sponsor work visas for non-EU employees?

Yes. An EOR with a Bulgarian legal entity can sponsor work and residence permits for non-EU nationals under Bulgarian immigration law.

The process involves the employer submitting a labor market test and permit application. Timelines vary by nationality and permit type, so early planning is advisable.

Do employees hired through an EOR in Bulgaria receive full statutory benefits?

Yes. Employees receive all benefits required under the Bulgarian Labour Code, including a minimum of 20 days paid annual leave and paid sick leave from day one.

Maternity leave of 410 days, paternity leave of 15 days, and social security coverage through the NSSI are also included. The EOR administers and funds these benefits as the legal employer.

What happens if I misclassify a contractor as an employee in Bulgaria?

Misclassification exposes the company to back-payment of social security contributions, income tax, and potential fines from the NRA and labor inspectorate.

Bulgarian authorities assess the actual working relationship, not just the contract label. Converting contractors to employees through an EOR reduces that exposure and brings the arrangement into compliance.