Hiring Employees in Bulgaria: A Comprehensive Guide

Located in Southeast Europe, Bulgaria is a country rooted in tradition yet a modern outlook. The nation has had steady economic growth; in 2021, the GDP change stood at 7.6%. The country’s nominal GDP stands at $89.53 billion, while the GDP based on purchasing power stands at $195.4 billion. 

The country is a member of the European Union, World Trade Organization, and NATO. The EU membership saw a growth in foreign investment. The country has free trade agreements with several European countries providing businesses with more extensive market access.

Companies can establish their business in Bulgaria and exploit its talented workforce. Hiring a workforce in Bulgaria gives access to well-skilled staff with knowledge of international working culture and English as a business language. 

The government has taken the initiative to upskill the education sector. This has led to a significant section of the young population with higher education degrees and digital plus analytical skills. Roughly 80% of the working population has a higher education degree. 

Companies must comply with employment acts and labor codes to ensure easier recruitment and selection in Bulgaria. Look at this article to understand how to recruit employees in Bulgaria.

Things to Know Before Hiring in Bulgaria

Initiate the recruitment and selection in Bulgaria processes by gaining awareness of the norms specific to hiring in the country. Here are the major pointers related to the hiring process in Bulgaria-   

All hiring practices in Bulgaria must comply with the laws specified under

• Bulgarian Commercial Act
• Bulgarian  Labor Code
• Bulgaria also recognizes trade unions, of which The Confederation of Independent Trade Unions of Bulgaria is the largest.
• The country follows a hierarchical structure with a high value of trust and respect.

Employment-related must-knows

When you begin working on the hiring process in Bulgaria, it is essential to know the employment practices –

1 – Throughout the recruitment processes in Bulgaria, there is no place for discrimination. 

2 – English is used widely in the Bulgarian work culture. The official language is Bulgarian, with Russian being the most popular foreign language.

Employment contract

In Bulgaria, employment contracts cover employees who may be on a-

1 – Temporary basis

2 – Part-time basis

3 – Full-time basis

Bulgaria requires employees to have employment contracts. The contract terms must be drafted in Bulgarian with figures mentioned in Lev, the local currency. A copy of the exact needs to be sent to the National Revenue Agency.

The employment contract must mention the following-

1 – Job description

2 – Payment and benefits

3 – Leave and holidays

4 – Termination and severance 

5 – Work hours and overtime

6 – Social Security and bonus

Probation 

The stipulated probation period in Bulgaria is six months.

Termination and notice period

Employees can be terminated by giving a month’s notice.

Working hours and breaks

When hiring staff in Bulgaria, keep track of the time allowed in terms of work-

1 – It is statutory to work eight hours daily for employees and a maximum of 40 hours weekly. 

2 – Overtime hours or dates are decided by mutual agreements between employer and employee, with payment for the same varying from 50-100% of salary.

Payroll

Salaries are paid monthly to employees in Bulgaria.

Minimum wage

Bulgaria has a minimum wage of BGN 780 per month. 

Maternity & paternity leaves

1 – Women can avail of 410 days of maternity leave, of which 45 are taken before the child’s birth.

2 – Fathers can avail of fifteen days of paid leave after a child’s birth. 

Annual leave

An employee is entitled to 20 days of paid leave, having worked for at least eight months for a company.

Other leaves

Employees are entitled to 18 months of sick leave for severe illnesses.

Holidays for employees             

The list of public holidays comprises-

Social Security

The social security system in Bulgaria comprises employer contributions as under. National insurance-related contributions include the same for social security plus health insurance.

1- The total rate for social security contributions is 24.7- 25.4%. Out of this, 14.12-14.82% is paid by the employer, while the employee pays 10.58%.

2- The health insurance contribution is 8%, with 4.8% employer contribution and 3.2%  employee contribution.

3- The rate of national insurance contribution stands at 32.7- 33.4%, where 18.92-19.62% is employer paid, and 13.78% is employee paid.

Taxes

1 – The income tax rate in Bulgaria is 10% on a flat basis for all incomes.

2 – The rate for VAT is 20%, with 18% applicable to some tourist services.

The Cost of Hiring an Employee in Bulgaria

The recruitment fees in Bulgaria are based on the recruitment process in Bulgaria and the related domain of work. The primary costs for hiring in Bulgaria are-

• Job advertisements
• Onboarding, training, and paperwork
• Traveling costs for interviewers
• Legal and contract costs
• Costs for notarization and administrative management
• Taxes 
• Salary and benefits
• Background checks
• Insurance 

What Does a Company Need to Hire Employees in Bulgaria?

Before hiring in Bulgaria, companies must ensure that the following requirements are met:

• The minimum legal working age for an employee is 18 years
• Employers can hire people under 18. However, those are strictly regulated by the employment act.
• Foreign employees need to have a relevant visa to work in Bulgaria.
• Employers should also apply for relevant permits for smooth operation in the country.

The entire setup for hiring in Bulgaria is based on the employer’s business model. You need to keep the following in mind while hiring in Bulgaria-

• Choose a method for company incorporation
• Create a company seal
• Open a bank account in a Bulgarian Bank
• Employee documentation
• Register the company with social security and tax authorities

Various Options for Hiring Employees in Bulgaria    

Here are the options to handle the hiring process in Bulgaria-                                      

• Once you need to begin recruitment in Bulgaria, you can hire a global EOR service provider for Employer of Record (EOR). Multiplier offers SaaS-based hiring solutions without directly setting up any entity or subsidiary in Bulgaria.
• You could also have an in-house HR department for hiring employees in the country. 

The Steps to Hiring in Bulgaria

There are no written rules for recruiting in Bulgaria. The process varies as per the company and the industry. The basic steps for a hiring process in Bulgaria are

Step 1- Advertise openings at work

• The major job openings make it on pages of social media sites and hiring boards. 
• The opening must mention the role, required qualifications, and experience levels.

Step 2- Initial interaction

• There will be a first round of interaction via a phone or video call for basic shortlisting. The interaction helps the interviewer understand the candidate’s interests while the latter points out reasons why a profile might be of interest.

Step 3- Scheduling interviews

• Next, the applicants are invited for an interview round with the hiring board to judge their candidature better in terms of qualification and experience match.

Step 4- Selection of a candidate

• Candidates are intimidated by the final selection via phone or email. The next and final steps include an offer letter, contract development, and onboarding for training on the job.

Let Multiplier be Your EOR Platform in Bulgaria

Recruiting employees needs proper research, time commitments, and intense efforts. With several steps, including advertising jobs and then hiring a candidate, you can take help from a PEO-EOR platform of reputation, such as Multiplier. 

Our team of experts helps look into the recruitment process in Bulgaria by offering SaaS-based Employer of Record solutions to hire talent. We assist employers in understanding all relevant local laws for finalizing the hiring process in Bulgaria.