Employee benefits in Bulgaria come under the Labour Code, supplemented by specific legislation such as the Protection against Discrimination Act, the Safe and Healthy Work Conditions Act, the Social Security Code, the Civil Procedures Code and the Personal Data Protection Act. Foreign companies hiring employees in Bulgaria must operate within this framework of legislation, which provides safeguards and guarantees for the workforce.

Foreign companies’ responsibilities reach beyond simply complying with tax, social security, and payroll regulations. Failure to comply with specific rules applying to benefits and entitlements runs the risk of fines and sanctions. Employers must have a firm grasp of what is guaranteed for their employees, which will affect the employer-employee relationship. This is where Bradford Jacobs points you in the right direction, drawing on over 20 years of experience as a Professional Employment Organisation (PEO) and Employer of Record (EOR).

What are the Compensation Laws in Bulgaria?

The Labour Code is the central legislation framework regulating the relationship in Bulgaria between employers and employees. Other acts and laws specifically deal with anti-discrimination in the workplace, healthy working conditions, the role of collective agreements and employee protection against employers becoming bankrupt. As a member of the European Union, there are also areas where EU Directives influence employment practices.

  • National Minimum Wage: The minimum wage for 2022 was set by the Council of Ministers at BGN 645 (€332, US$349) per month, the lowest minimum among the European Union’s 21 member nations out of 27 that apply a minimum wage.
  • Sick Leave and Benefit: Employees are entitled to up to 18 months of leave, with the first three days’ benefit paid by the employer at 70% of gross pay or social insurance contributions over the previous 18 months. The following days are covered by the National Social Security Institute (NSSI) for 80% or 90% of gross daily remuneration or average insurable income based on contributions.
  • Working Hours and Breaks: A 40-hour week based on five eight-hour days is the norm under the Labour Code. Employers can increase working hours in consultation with workers’ representatives to 10 hours a day for a maximum of 60 days a year and no more than 20 consecutive working days.
  • Overtime: Extra hours cannot exceed 150 hours annually, 30 hours in a calendar month, six hours a week, or more than three hours on two consecutive days and are allowed only for exceptional operational reasons. Minimum compensation is 50% above the basic salary on working days, 75% above basic pay on holidays, and 100% extra for working on public holidays.
  • Paid Vacations: Employees are entitled to 20 work days of paid vacation and qualify for leave once they have been with an employer for four months.
  • Maternity / Paternity / Parental Leave and Benefit: Pregnant employees have a total of 410 days of leave, with 45 days taken before the due date. Where the birth comes within that period, the balance is added to the post-natal period. Fathers receive 15 days of paternity leave, while parental leave of two years can be shared after the child is six months old.
  • Probation Period: Trial periods cannot exceed six months and, during that time, can be terminated without notice by whichever parties asked for the probationary period.
  • Termination and Severance: Terminations must be advised in writing and lodged with the National Revenue Administration within seven days. The National Labour Inspectorate must permit if a workers’ representative is issued with a termination notice. Depending on circumstances and length of service, severance payments can range from one month’s salary to six months. Collective redundancies require prior consultation with trade unions, workers’ committees and the Employment Agency. This applies in the following circumstances: 10 employees in companies employing between 20 and 99 staff; 10% of companies hiring between 100 and 300; 30 employees where the workforce exceeds 300.
  • Notice Periods: The employer gives the statutory minimum of 30 days up to a maximum of three months, as does the employee unless collective agreements or contracts allow for different terms.

Guarantees and Restrictions on Employee Benefits in Bulgaria

Guaranteed Benefits:

  • Maternity Leave and Benefit:  Leave is for 410 days, allowing for 45 days before the due date, with any balance transferred to the post-natal allowance if the birth is earlier than 45 days. The benefit is 90% of the average gross daily income covered by insurance over the previous 24 months and cannot be less than the national minimum wage.
  • Sick Leave and Benefit:  Benefit for the first three days is paid by the employer at 70% of gross salary or the gross social insurance coverage over the previous 18 months. Subsequent days are covered by the National Social Security Institute (NSSI) for 80% or 90% of gross daily remuneration or average insurable income assessed against contributions. Employees are allowed up to 18 months’ leave for illness.
  • Paid Vacations:  Minimum paid vacation allowance is 20 work days, with entitlement beginning after four months’ work for the employer.
  • Maternity Benefit: Applicants must have been insured for sickness and maternity benefits for at least 12 months before the leave is due to begin. The employer must be provided with medical certificates confirming the pregnancy. It is not necessary to have been working for the same employer.
  • Unemployment Benefit: Claimants must be registered as unemployed with the Employment Agency within seven days of stopping work; must not be entitled to old age or retirement pension; must not be undertaking any job that requires compulsory insurance. The benefit is generally 60% of the average insurable income over the previous two years.

Social Security in Bulgaria

Health insurance programs in Bulgaria are administered by the National Social Security Institute (NSSI). The state organisation oversees compulsory social security provisions for ill health, maternity, unemployment, occupational illness and injury, disability benefits and pensions for old age and survivors. The NSSI’s Supervisory Board comprises representatives from the state plus employer and employee organisations.

The National Health Insurance Fund covers benefits and mandatory health insurance for all Bulgarian citizens, plus foreigners who live in Bulgaria and do not have health insurance provided in another European Union member nation. Visits to a general practitioner are subject to a small user charge.

Employers and employees contribute to the social security and health insurance funds between 32.7% and 33.4%. Employers’ contribution is between 18.92%-19.62%, with 13.78% withheld and remitted from employees’ salaries.


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