Global PEO and Payroll in Bulgaria

Expanding into Bulgaria offers strategic advantages, but the real challenge is managing payroll and employment compliance to local standards. For international employers, setting up a Bulgarian entity can mean months of administrative complexity, high fixed costs, and exposure to legal risks if statutory obligations are missed or misunderstood.

For most global businesses, a licensed Employer of Record (EOR) is the only practical route to paying local and expatriate staff in Bulgaria without establishing a company. While many search for “PEO Bulgaria,” only an EOR model is recognised by Bulgarian authorities for legal employment, payroll administration, and full statutory compliance. This distinction matters, EOR means local employment contracts, payroll, tax, and benefits, all handled under a single accountable provider.

With Acumen’s Global EOR and Payroll solution, employers can hire and compensate their Bulgarian or international workforce legally, efficiently, and with confidence, freeing you to focus on growth, not paperwork or regulatory hurdles.

EOR, PEO and Payroll Compliance in Bulgaria

EOR and PEO describe service models rather than specific legal categories under Bulgarian employment law.

For an international company that wants to employ someone in Bulgaria without establishing its own local entity, an Employer of Record (EOR) can provide the local employment arrangement. The EOR becomes the employee’s legal employer and manages the Bulgarian employment contract, payroll, tax withholding, social security and statutory employment administration, while the client manages the employee’s role and day-to-day work.

The exact structure matters. Bulgarian law regulates employment relationships and also imposes specific rules on businesses supplying workers to another undertaking under its direction and control. Depending on how the arrangement works in practice, additional registration or employment-law requirements may therefore apply.

Shadow payroll serves a different purpose and is not an alternative to establishing the correct employment arrangement.

Shadow payroll may be used for some cross-border assignments where an employee remains employed abroad but Bulgarian payroll reporting, tax withholding or social-security obligations also arise. Whether it is appropriate depends on the employee’s assignment, tax residence, social-security position and the underlying employment relationship.

For someone being hired to work in Bulgaria on an ongoing basis, the company first needs a compliant employment structure. Payroll then follows that structure rather than replacing it.

Key features of EOR solutions in Bulgaria:

• Employment contracts: All employees must have a written Bulgarian employment contract, executed by the EOR. Contract terms must meet Labour Code requirements—covering job title, salary, hours, leave, and notice periods.
• Payroll administration: EOR processes monthly payroll in local currency (BGN), calculates all statutory taxes and contributions, and ensures employees are paid in full compliance with national law.
• Tax and social contributions: Both employer and employee social security, health, and pension contributions are calculated and remitted by the EOR. Employment income is subject to a flat 10% personal income tax, withheld and paid at source.
• Reporting and documentation: The Employer of Record (EOR) files all mandatory employment and tax reports, including monthly declarations to the National Revenue Agency and annual income statements for employees.

Using an EOR is the only way for non-resident companies to employ and payroll staff in Bulgaria without opening their own legal entity. “PEO” and “co-employment” are not relevant under Bulgarian legislation; all local compliance liability sits with the Employer of Record (EOR).

Payroll Cycle, Core Components, and Statutory Benefits in Bulgaria. 2026

Payroll cycle

• Bulgaria uses the euro for salary payments and payroll reporting.
• Salary payment dates and frequency are determined by the employment terms and the employer’s payroll rules.
• Employers must maintain payroll records and provide employees with information on paid remuneration and deductions as required.

Core payroll components

• Base salary: Must be specified in the employment contract and meet or exceed the national minimum wage of €620.20 per month, or any higher minimum that applies under a Collective Bargaining Agreement.
• Personal income tax: Employment income is generally subject to a flat 10% personal income tax, withheld by the employer.
• Social security and health insurance:
  • Employer: 18.92%–19.62%
  • Employee: 13.78%
  • Combined: 32.70%–33.40%
  • The employer rate varies according to the applicable contribution for workplace accidents and occupational diseases.
• Contribution ceiling: The maximum monthly insurable income is €2,300 from 1 August 2026.
• Employer contributions: Paid in addition to gross salary and covering statutory pension, sickness and maternity, unemployment, health insurance, workplace accident and other applicable social-security funds.
• Additional pay and allowances: Bonuses, allowances, overtime and other additional remuneration may form part of taxable and insurable income, depending on the type of payment.
• Overtime: Statutory minimum overtime premiums are:
  • 50% for overtime on normal working days;
  • 75% on rest days;
  • 100% on official public holidays.

Statutory benefits and leave

• Annual paid leave: Minimum 20 working days per year. Employees entering employment for the first time may use annual leave after acquiring at least four months of employment service. Longer or additional leave applies to certain categories of employees.
• Public holidays: Bulgaria has statutory public holidays, including the four-day Orthodox Easter period. Work performed on an official public holiday must be paid at no less than double the normal rate.
• Sick leave:
  • First 2 working days: 70% of average daily gross remuneration, paid by the employer.
  • Thereafter: 80% paid by the National Social Security Institute, subject to eligibility requirements.
  • For workplace accidents or occupational diseases, the NSSI benefit is generally 90%.
  • Extended periods of temporary incapacity are subject to medical assessment and statutory limits.
• Maternity leave: Up to 410 calendar days, including 45 days before the expected birth. Eligible employees generally receive 90% of average insured earnings, subject to statutory rules and limits.
• Childcare leave: After maternity leave, eligible employees may take additional leave to care for a child until age two, with a statutory monthly NSSI benefit.
• Paternity leave: Fathers are entitled to 15 calendar days following the child’s discharge from hospital, with an NSSI benefit generally calculated at 90% of the relevant insured earnings.
• Additional parental leave: Fathers may qualify for up to two months of additional leave until the child reaches eight years of age, subject to statutory conditions.
• Unpaid parental leave: Each parent may take up to six months of unpaid childcare leave until the child reaches eight, with part of the entitlement transferable between parents.

Payroll compliance requirements

• Employers must submit the required monthly payroll, tax and social-security declarations to the National Revenue Agency, including Declarations 1 and 6, together with the applicable annual employment-income reporting.
• Payroll registers, employment contracts and certain employment records must generally be retained for 50 years.
• Bulgaria’s Employment Register and Unified Electronic Employment Record have replaced the former paper employment record for new employment data.
• Employers generally have three days to report the conclusion or amendment of an employment relationship and seven days to report termination.
• Late or incorrect payroll, tax, social-security or Employment Register filings can result in statutory penalties and additional correction procedures.