Employee Benefits in Bulgaria

Who Is Entitled to Employee Benefits In Bulgaria

In Bulgaria, most statutory employee benefits apply to individuals working under an employment contract governed by the Bulgarian Labour Code. This generally includes full-time and part-time employees, whether hired on an indefinite or fixed-term basis, as long as they are registered with the National Revenue Agency for social security and health insurance purposes.

Eligibility for specific benefits can depend on factors such as length of service, contribution history to the social security system, the number of hours worked, and whether minimum qualifying periods are met. Certain benefits, such as most social security coverage and paid annual leave, apply from the start of employment, although some leave entitlements require at least 8 months of service. Contractors and freelancers working under civil contracts or as self-employed are not automatically covered by the Labour Code benefits; they are usually responsible for arranging their own social and health insurance and are not entitled to statutory paid leave unless agreed contractually.

Overview of Employee Benefits In Bulgaria

Employee benefits in Bulgaria are relatively comprehensive compared to many global markets, with strong protections for paid leave, maternity and parental rights, and social security. Benefits play a central role in workplace culture, where employees often view legal entitlements as non-negotiable and evaluate employers based on supplemental offerings such as private health insurance, meal vouchers, and flexible working arrangements.

Mandatory Employee Benefits In Bulgaria

Mandatory benefits are legally required and form the core of any employee benefits package in Bulgaria. Here's a comprehensive list of mandatory benefits in Bulgaria:

Social Security and Pension Insurance Contributions

Your company must register employees for social security and pay contributions jointly with them according to the Bulgarian Social Security Code. These contributions fund pensions, general sickness and maternity, work injury and occupational disease, and unemployment. The combined contribution rate varies depending on factors such as the type of work and whether the job falls into a category with higher risk, but employers typically cover a larger share than employees.

Contributions are calculated as a percentage of the employee’s gross salary, up to a maximum contributory income cap set annually. You must file monthly declarations with the National Revenue Agency and pay contributions by statutory deadlines. Proper payroll records, employment contracts, and personal identification are needed to demonstrate compliance. These benefits underpin long-term income security for employees in old age, during sickness, or after job loss.

Public Health Insurance Contributions

Employers are also required to contribute to Bulgaria’s compulsory public health insurance system, which provides access to healthcare services under the National Health Insurance Fund. Both employer and employee contributions are calculated as a percentage of gross salary up to a statutory ceiling, with rates defined by law and the annual state budget.

You must register employees for health insurance, report contributions monthly, and keep accurate payroll documentation. Continuous coverage is essential, as gaps can limit access to publicly funded healthcare. This benefit is a cornerstone of employee well-being because it ensures access to primary care, specialist consultations, and hospital treatment within the public system.

Paid Annual Leave

Under the Labour Code, full-time employees are entitled to at least 20 working days of paid annual leave per year, with potential for more based on collective agreements, job specifics, or length of service. Employees typically must complete at least 8 months of work experience before they can fully exercise their annual leave right, though employers can allow earlier use at their discretion.

Annual leave is paid at the employee’s average daily remuneration for the preceding period defined by law, and you must maintain detailed leave records and written requests or approvals. Employees accrue leave during periods such as maternity leave or temporary incapacity to work. Proper administration of leave is crucial for employee rest, morale, and productivity, and failure to grant or pay leave correctly can trigger sanctions and back-pay obligations.

Public Holidays and Holiday Pay

Bulgaria has several official public holidays each year during which employees are generally entitled to rest with pay. When employees must work on a public holiday, you are required to provide increased remuneration, typically at least double the regular pay rate, or grant compensatory rest, in line with the Labour Code and any applicable collective agreements.

You should maintain schedules demonstrating why work on a public holiday was necessary and payroll records showing the enhanced pay. Correct handling of public holidays is important not only for compliance but also for preserving work–life balance and employee satisfaction.

Maternity Leave and Benefits

Female employees are entitled to 410 calendar days of maternity leave for each child, of which 45 days are taken before the expected birth date, subject to medical certification. During most of this period, the National Social Security Institute pays a maternity benefit, provided the employee has the required history of social security contributions for general sickness and maternity, which is generally 12 months of insured service.

You must process the necessary documentation, including medical certificates and applications for benefits, and ensure that the employment relationship is maintained during leave. The job protection and income replacement provided by maternity leave are central to supporting employees through pregnancy and early child-rearing and are highly valued in the Bulgarian labour market.

Parental and Childcare Leave

After the maternity leave period, one of the parents (most often the mother but, under certain conditions, the father or another relative) is entitled to parental leave until the child reaches a specified age, typically 2 years, with a benefit paid by social security at a fixed monthly amount set by law. Additional types of leave exist for raising a child up to a certain age, for adoption, and for dealing with special family circumstances.

Eligibility for these leaves depends on the parent’s social security contribution history and the age of the child. Your company must keep the position or a comparable one available and cooperate with the submission of documentation to social security. These leaves are important for supporting family life, and failure to respect them can lead to serious legal and reputational consequences.

Paid Sick Leave

Employees are entitled to paid sick leave when they are temporarily unable to work due to illness or accident, as certified by a medical practitioner. Under current rules, the employer pays 70 percent of the employee’s average daily remuneration for the first 3 working days of each sickness period. From the fourth day onward, the National Social Security Institute pays a sickness benefit, provided the employee has the minimum required insurance contribution period for sickness and maternity.

To administer this benefit, you must collect and keep original medical certificates and ensure they are correctly reported. Sick leave protects employees’ income during health issues and prevents them from working while ill, which is crucial both for productivity and for maintaining a healthy workplace.

Working Time, Rest Periods, and Overtime Compensation

The Labour Code sets mandatory rules on maximum working hours, daily and weekly rest, and overtime. Standard full-time work is typically 8 hours per day and 40 hours per week. Employees must have at least 12 hours of uninterrupted daily rest and at least 48 hours of weekly rest, usually over two consecutive days. Overtime is restricted and must be justified, recorded, and compensated with higher pay or additional rest, as defined by law.

Your company must maintain detailed timekeeping and records of overtime, night work, and shift patterns. Non-compliance can trigger fines and orders from the labour inspectorate. Adhering to these rules protects employees from overwork and reduces fatigue-related risks.

Occupational Health and Safety and Preventive Medical Care

Employers in Bulgaria are required to ensure safe and healthy working conditions under the Health and Safety at Work Act and related regulations. This includes risk assessments, workplace safety measures, training, provision of personal protective equipment, and, where required, regular preventive medical examinations at the employer’s expense.

You must document risk assessments, safety instructions, training attendance, and medical exam results (in compliance with data protection rules). A strong occupational health framework reduces workplace accidents and illnesses and enhances employees’ sense of security and trust in your company.

Unemployment Insurance Contributions

Unemployment insurance is part of the social security system and is funded by mandatory contributions from employers and employees. These contributions entitle eligible employees who lose their jobs to receive unemployment benefits administered by the National Social Security Institute, subject to contribution history and other legal conditions.

As an employer, you must pay and report unemployment insurance contributions as part of overall social security payments. While the benefit is paid after employment ends, correct contributions during employment are crucial for employees’ financial security in case of job loss.

Supplemental Employee Benefits In Bulgaria

Supplemental benefits are not required by law, but can help you stand out as an employer and attract top talent. They include:

Private Health and Dental Insurance

Private health and dental insurance policies give employees faster access to specialists, private hospitals, and additional services that may not be fully covered by the public system. Employers in Bulgaria often offer group policies that cover outpatient care, dental treatment, check-ups, and sometimes family members.

Companies provide these benefits to reduce absenteeism, support employee well-being, and differentiate their offer in a competitive market, particularly for skilled professionals. Typically, the employer pays the premium in full or in part, and may negotiate preferential terms with insurers for the whole team. This benefit is especially attractive in larger cities where demand for high-quality private healthcare is strong.

Meal Vouchers and Food Allowances

Meal vouchers are a very popular non-mandatory benefit in Bulgaria. Your company can provide vouchers accepted in supermarkets and restaurants, often taking advantage of tax-favoured treatment up to a certain monthly limit per employee if specific legal conditions are met.

Employers use meal vouchers to support employees’ daily living costs and increase net take-home value without proportionally increasing gross salaries. Implementation usually involves partnering with a voucher provider and distributing physical or electronic vouchers each month. This benefit is widely recognised and highly valued by local employees.

Additional Paid Leave

Beyond the statutory minimum, many employers grant extra days of paid annual leave or special leave around important events such as weddings, exams, or moving. This can be formalised in internal policies or individual employment contracts and may increase with length of service or seniority.

Offering additional paid leave signals respect for work–life balance and helps prevent burnout. It is relatively easy to implement but requires clear policies and tracking to ensure consistent treatment and accurate payroll calculations.

Bonus and Performance-Based Pay

Variable pay, including annual bonuses, performance-based bonuses, and profit-sharing schemes, is common in Bulgaria for motivating and retaining employees. These bonuses are typically tied to company performance, individual goals, or team outcomes, and are documented in employment contracts or bonus policies.

Employers offer such schemes to align employees’ interests with business results and to remain competitive in sectors like IT, finance, and business services. Bonuses are usually paid through payroll and taxed as regular employment income, so planning and clear criteria are important to avoid disputes and manage expectations.

Flexible and Remote Work Arrangements

Flexible working hours, hybrid work, and fully remote roles have become a key differentiator in Bulgaria, particularly for knowledge-based jobs. While aspects of flexible work are regulated, many of the specific arrangements your company offers, such as home office days or core hours, go beyond legal requirements.

Employers implement these benefits through internal policies that define eligibility, communication expectations, and provision of equipment or allowances for home office costs. Flexibility improves work–life balance, broadens your hiring pool geographically, and can support higher engagement and productivity.

Life and Accident Insurance

Group life and accident insurance provides financial protection to employees and their families in case of death or permanent disability. Employers often negotiate group policies with insurers that cover all staff or particular categories of employees.

Companies offer these benefits to show long-term commitment to employees’ security, especially in roles with higher travel or operational risk. Premiums are usually employer-funded and may have specific tax treatment depending on how the plan is structured.

Pension Top-Ups and Voluntary Pension Funds

Beyond mandatory pension insurance, some employers contribute to voluntary pension funds or offer matched contributions to employees’ individual pension savings. These schemes help employees increase their retirement income and are particularly valued by mid-career and senior staff.

Implementation involves setting clear rules on eligibility, vesting, and contribution levels, and partnering with licensed pension companies. This long-term benefit can significantly improve retention and is a strong signal of stability and corporate responsibility.

Education, Training, and Professional Development

Many Bulgarian employers invest in employee development through paid training, language courses, conferences, certifications, and tuition reimbursement. While some job-specific training is legally required, most structured career development programs are voluntary benefits.

Companies use these programs to upskill their workforce, support career progression, and position themselves as employers of choice. Typical implementation includes annual training budgets, internal academies, or individual learning accounts tied to development plans.

Wellness Programs and Sports Cards

Well-being initiatives such as subsidised gym memberships, sports cards accepted at multiple facilities, mental health support, and wellness events are increasingly common in Bulgaria. These benefits address physical and mental health beyond basic medical care.

Employers implement them through partnerships with sports card providers or wellness platforms, or by organising internal activities. They can improve morale, reduce stress, and contribute to a healthier, more resilient workforce.

Tax Implications of Employee Benefits in Bulgaria

How Benefits Are Taxed for Employers and Employees

In Bulgaria, most cash and in-kind benefits provided in connection with employment are treated as taxable income for employees and are subject to the flat personal income tax and to social security contributions, unless a specific exemption applies. This includes bonuses, many allowances, and some forms of fringe benefits when provided regularly.

For employers, the cost of employee benefits is generally deductible for corporate income tax purposes if it is business-related, properly documented, and not explicitly limited by tax law. Certain social expenses in kind may be subject to a separate final tax at the employer level, rather than being taxed as personal income, depending on how they are structured and whether they meet statutory conditions.

Tax-Advantaged or Preferentially Treated Benefits

Some benefits, such as meal vouchers up to a statutory monthly cap and certain social expenses in kind that are accessible to all employees, can receive preferential tax treatment when specific requirements are met. In these cases, the employer may pay a separate final tax on the expense instead of treating it as taxable income for employees, which can make the benefit more net-efficient for staff.

To leverage such advantages, your company must design benefits in line with Bulgarian tax rules, ensure equal or broad accessibility, and avoid linking them solely to performance of specific individuals where that would change their tax character. It is common for employers to seek specialised tax advice when structuring larger benefit programs.

Documentation and Reporting Requirements

Proper documentation is essential for tax compliance. You must keep employment contracts, internal policies on benefits, invoices from providers, records of vouchers and in-kind benefits, and detailed payroll reports reflecting the taxable base, social security contributions, and any final taxes paid on social expenses.

Employers must report taxable benefits and social security contributions in periodic payroll declarations to the National Revenue Agency and include them in annual information returns where required. Failure to document and report correctly can lead to additional tax assessments, penalties, and interest, so establishing clear internal processes and regular reviews is important.

Managing Tax Risk Around Cross-Border and Remote Employees

When you employ people who work from Bulgaria for a foreign entity or when you have cross-border assignments, tax and social security rules can be more complex. Double tax treaties, EU social security coordination regulations, and rules on permanent establishment may affect where contributions and taxes are due.

In such cases, you should carefully assess the employee’s tax residency, place of work, and applicable international agreements. Coordinating between local and international advisors helps ensure that benefits are correctly taxed and reported in Bulgaria and abroad, reducing compliance risks for both your company and the employee.

Legal Considerations for Employee Benefits in Bulgaria

Employee benefits in Bulgaria are primarily governed by the Labour Code, the Social Security Code, the Health Insurance Act, and the Health and Safety at Work Act, along with numerous implementing regulations and ordinances. These laws set out minimum standards for working time, paid leave, social insurance contributions, occupational safety, and non-discrimination, and they apply to most employment relationships in the country.

Non-compliance with benefit-related obligations can result in administrative fines, mandatory corrective orders, and, in some cases, liability for unpaid contributions, interest, and penalties. The General Labour Inspectorate Executive Agency regularly conducts inspections, often triggered by risk assessments, random selection, or employee complaints. The National Revenue Agency and the National Social Security Institute also review payroll and contributions and can issue assessments for underpaid social security or tax.

Your company should implement internal policies that reflect current legislation, maintain thorough documentation for all benefits, and schedule periodic internal or external audits of payroll, contributions, and leave administration. Keeping employment contracts and handbooks aligned with legislative changes and case law, and training HR and payroll staff, helps reduce the risk of disputes and enforcement action.

How Benefits Impact Employee Cost

Mandatory social security and health insurance contributions in Bulgaria significantly increase the total cost of employment above gross salary. Depending on the type of work and contribution rates in force, the employer’s share of social and health contributions can add roughly 18–20 percent or more to gross pay, while employees also contribute a substantial share. When you layer in paid leave, sick pay for the first days of illness, and administration costs, the total payroll cost is meaningfully higher than base salaries alone.

To manage costs, many employers design balanced compensation packages that mix fixed pay, benefits, and performance-based components, while making use of any available tax efficiencies for certain benefits. Thoughtful investment in benefits tends to deliver strong returns in retention, employee satisfaction, and productivity, particularly when you focus on offerings that employees value most, such as health coverage, flexibility, and meaningful development opportunities.

How Can Playroll Help with Benefits Management in Bulgaria?

Managing employee benefits across multiple countries can be complex, but it doesn’t have to be. Playroll simplifies the process by handling administrative tasks, ensuring compliance with local regulations, and providing access to tailored benefits packages in 180+ regions.

With everything managed through a single platform, companies can focus on supporting their teams  – wherever they are.

• Pick and choose from localized benefits packages to attract and retain global talent.
• Built-in compliance to stay ahead of evolving regulations.
• Manage leave, expenses, and more, through one intuitive dashboard.