Employer of Record (EOR) in Bulgaria: Why Tech Reserve is your best choice

Why Bulgaria for tech talent?

Bulgaria is a hidden gem for businesses seeking skilled technical professionals. Here’s why:

• Exceptionally strong talent pool: Bulgaria’s workforce is highly educated, particularly in areas like artificial intelligence (AI), software development, and data science.
• English proficiency: Professionals in Bulgaria have excellent communication skills, ensuring seamless collaboration.
• Cost-effective labor: Compared to Western Europe or the US, salaries and operational costs are significantly lower.
• Strong work ethic: Bulgarian professionals are known for their reliability and dedication to quality.
• Strategic location: Bulgaria serves as a gateway to both Western and Eastern markets, making it an excellent base for regional operations.

The role of education in technical expertise

Bulgaria’s educational institutions are central to its reputation for technical excellence. Notable universities include:

• Sofia University: Renowned for IT and computer science programs.
• Technical University of Sofia: A leading institution for engineering and software development.
• Plovdiv University: A hub for innovation in software and AI.

These universities emphasise practical training and innovation, preparing graduates to excel in cutting-edge fields like AI and data science.

Employment terms in Bulgaria: Key information

Types of employment contracts

• Indefinite contracts: The most common type, offering job security and long-term stability.
• Fixed-term contracts: Limited to three years but offer flexibility for specific projects.
• Part-time contracts: Ideal for flexible working arrangements.

Working hours and overtime

• Standard workweek: 40 hours (8 hours per day).
• Overtime is capped at 150 hours annually and paid at premium rates:
  • 150% for weekdays.
  • 175% for weekends.
  • 200% for public holidays.

Minimum wage and probation

• Minimum wage: BGN 833 per month.
• Probation period: Up to 6 months.

Taxes and contributions

Employee contributions:

• Pension Fund (SSIF): 6.58%.
• Additional Pension Fund: 2.20%.
• Health Insurance: 3.20%.
• Sickness and Disability Insurance: 1.40%.
• Unemployment Fund: 0.40%.

Employer contributions:

• Pension Fund (SSIF): 8.22%.
• Additional Pension Fund: 2.80%.
• Health Insurance: 4.80%.
• Sickness and Disability Insurance: 2.10%.
• Unemployment Fund: 0.60%.
• Industrial Accident Fund: 0.50%.

Average employer taxes - 18.92% - 19.62% of gross salary

Benefits and leave

Annual leave

• At least 20 days of paid leave annually.
• Unused leave from the past two years is paid out upon termination.

Sick leave

• First 3 days: Paid by the employer at 70% of the basic income.
• Day 4 onward: Paid by social security at 80%-90% of the basic income.
• Employees must have at least 6 months of social security history to qualify.

Maternity and paternity leave

• Maternity Leave: 410 days, paid at 90% of the base income. An optional second year is available at reduced pay.
• Paternity Leave: 15 days, paid at 90%, covered by the National Social Security Fund.

Length of service pay

Employees receive an additional 0.6% of their salary for each year of service. This is often included in the total salary offer.

Termination and severance

Notice period

• During probation: No notice required.
• After probation: Minimum 1-month notice, with a maximum of 3 months.

Severance pay

• Redundancy termination: At least 1 month’s salary.
• Termination without cause: Typically 4 months’ salary, depending on circumstances.
• Severance can reach up to 7 months’ salary in specific cases.

Tax overview in Bulgaria

Employer Tax Contributions

Employers contribute 18.92%-19.62% to cover health insurance, social security, and other benefits.

Individual taxes

Employees pay:

• A flat 10% income tax rate, regardless of salary.
• 13.78% in social security contributions.

Payroll and bonuses

• Payroll cycle: Monthly, with payments typically made on the last working day.
• 13th salary: Not legally required but often offered as a company policy.

Why choose Tech Reserve?

Tech Reserve offers more than just EOR services; we provide peace of mind by handling every aspect of compliance, payroll, and local regulations. Our transparent pricing, seamless processes, and commitment to quality ensure you can focus on growing your business.

Ready to expand into Bulgaria?

Bulgaria’s combination of highly skilled talent, competitive costs, and favourable labor laws makes it an ideal destination for growing businesses. With Tech Reserve, you can access this talent pool while leaving the complexities of employment regulations to us.