Reference · 2026
What an employee actually costs a Bulgarian company in 2026
The full contribution split, the flat 10% income tax, the insurable income cap, worked gross-to-net examples for real roles, and the monthly filing calendar your payroll has to hit.
- Employer add-on
- ~19%
- Employee share
- ~13.8%
- Income tax
- 10% flat
Contribution rates, fund by fund
Rates for a standard third-category worker born after 1959. The accident-at-work rate depends on your registered economic activity.
| Fund | Employer | Employee |
|---|---|---|
| Pension (state, third category)Higher employer share for people born before 1960 who stay outside the universal fund. | 8.22% | 6.58% |
| Universal pension fundApplies to people born after 31 December 1959. | 2.80% | 2.20% |
| General sickness and maternityFunds paid sick leave and maternity benefit. | 2.10% | 1.40% |
| UnemploymentEntitlement follows a minimum contribution record. | 0.60% | 0.40% |
| Accident at workRate set by the employer's economic activity code. | 0.40-1.10% | 0% |
| Health insuranceGives access to the public health system. | 4.80% | 3.20% |
Worked examples
Indicative figures rounded to the nearest lev, using the standard rate set and the fixed euro conversion of 1.95583 lev. Your accountant's calculation is the one that matters for filings.
| Role | Gross | Total cost to company | Employee net |
|---|---|---|---|
| Junior support agent | BGN 1,600 (EUR 818) | BGN 1,912 (EUR 978) | BGN 1,272 (EUR 650) |
| Mid-level developer | BGN 5,000 (EUR 2,556) | BGN 5,975 (EUR 3,055) | BGN 3,974 (EUR 2,032) |
| Senior engineer above the cap | BGN 8,000 (EUR 4,090) | BGN 9,010 (EUR 4,607) | BGN 6,553 (EUR 3,350) |
| Owner-manager on the minimum base | BGN 1,077 (EUR 551) | BGN 1,287 (EUR 658) | BGN 856 (EUR 438) |
Rules that change the number
- Income tax is a flat 10% on employment income after the employee's own social contributions are deducted, with no progressive bands.
- Social security is calculated on gross pay up to the maximum monthly insurable income, so senior salaries stop accruing contributions above the cap while the 10% income tax continues.
- There is a statutory minimum insurable income per occupation and sector, so a low declared salary in a skilled role will still be assessed on the minimum for that role.
- An active manager of a Bulgarian company owes social security on a management contract even where no salary is drawn, which is why the owner-manager line exists in the table above.
- Employees are entitled to a minimum of 20 working days of paid annual leave, and the employer covers the first three days of sick leave at 70% of average pay.
- Bulgaria has no separate payroll tax on the employer beyond the contributions listed here, which is why total employer cost sits around 118-120% of gross.
The monthly payroll calendar
Before the first working day
Register the employment contract
The contract must be filed with the National Revenue Agency before the employee starts. Starting someone unregistered is one of the most heavily fined breaches in Bulgarian labour law.
Monthly, by the 25th
Declaration 1 and Declaration 6
Per-employee insurance data and the employer totals for the previous month, with contributions and withheld income tax paid by the same date.
Monthly payday
Payslips and payment
Salaries are paid at least once a month, with a documented payslip. Most companies pay between the 5th and the 15th for the prior month.
Quarterly
Withholding summary
The employer reports income tax withheld during the quarter alongside the standard payroll filings.
Annually, by 30 April
Annual tax reconciliation
The employer reconciles income tax for the year and issues employees the statement they need for any personal return.
Frequently asked questions
What is the total employer cost on top of gross salary in Bulgaria?
Employer social security and health contributions add roughly 18.5-19.6% to gross pay in 2026, depending on the accident-at-work rate for your activity. There is no additional employer payroll tax, so a BGN 5,000 gross salary costs the company about BGN 5,975.
How much income tax does an employee pay?
A flat 10% on employment income after the employee's own social security contributions are deducted. Combined employee contributions are about 13.78%, so net pay is typically around 79-80% of gross.
Is there a cap on social security contributions?
Yes. Contributions are only due up to the maximum monthly insurable income. Above that ceiling the employer and employee stop paying social security, while the 10% income tax still applies to the full amount.
Does a company director have to be on payroll?
A manager performing management activity is insured on a management contract with a statutory minimum base, even when no salary is drawn. Ignoring this is the single most common compliance gap in non-resident-owned EOODs.
Can I hire a contractor instead of an employee?
Yes, and many Bulgarian specialists invoice as registered self-employed persons. The relationship must be genuinely independent; if it looks like employment in substance, the National Revenue Agency can reclassify it and assess the missing contributions.
Can a foreign company hire in Bulgaria without a local entity?
It can register as an employer for social security purposes or use an employer-of-record, but both routes cost more per head than running a Bulgarian EOOD once you have two or three people.
Hiring in Bulgaria and want payroll handled?
We run contract registration, monthly declarations and payslips for non-resident owned companies, with a fixed per-employee fee agreed up front.
Related references
- Bookkeeping and accounting fees - what payroll adds to the monthly accounting bill.
- Bulgaria tax facts 2026 - the headline rates in one citable page.
- Bulgaria for IT outsourcing teams - staffing a development team through an EOOD.
- Tax calculator - model salary versus dividend on your own numbers.
- Business bank account - the account salaries are paid from.