How to Hire Employees in Bulgaria: A Practical Guide for Employers

Hiring your first employee in Bulgaria involves several legal steps, from drafting a compliant contract to registering with the tax authorities. This guide walks you through the essentials so you can build your team with confidence.

Employment Contracts

All employment relationships in Bulgaria must be based on a written contract signed by both parties. The Labour Code recognises two main types: indefinite contracts, which are the default, and fixed-term contracts, which are permitted for temporary or seasonal work. The contract must include key details such as job title, workplace, start date, remuneration, working hours, and paid annual leave entitlement.

Before signing, you must provide the employee with a notification containing the same essential information, and the employee must undergo a mandatory medical examination.

Registration with the National Revenue Agency

Within three days of signing the contract, you must register the employee with the National Revenue Agency (NRA) by submitting a standard form. Registration can be done online or in person. Late registration may result in fines.

You will also need to keep a record of employment contracts and submit monthly declarations to the NRA showing the social security income and contributions for each employee.

Social Security and Health Insurance

Both employers and employees contribute to Bulgaria’s social security system, which covers pensions, unemployment, health insurance, and workplace accidents. The contributions are calculated as a percentage of the employee’s gross salary, with the employer’s share being higher than the employee’s. As an employer, you are responsible for deducting the employee’s contribution from their salary and paying the total amount to the NRA by the 25th of the following month.

Additionally, you must register the employee with the National Health Insurance Fund (NHIF) for health coverage, which is typically done automatically through the NRA registration.

Probation Periods and Termination

Probation periods are common and can last up to six months for most positions. During this time, either party may terminate the contract without notice, unless agreed otherwise. After the probation period, termination requires a written notice period, which varies depending on the type of contract and the employee’s length of service.

Employers must also follow strict procedures for dismissals, including providing a valid reason and, in some cases, obtaining prior approval from the Labour Inspectorate.

Work Permits for Non-EU Citizens

If you plan to hire a non-EU citizen, you must first obtain a work permit from the Employment Agency. The process involves proving that the position cannot be filled by a Bulgarian or EU citizen and that the foreign worker meets the necessary qualifications. Once the permit is issued, the employee can apply for a residence visa and then a residence permit.

Key Takeaways

• Always use a written employment contract that complies with the Labour Code.
• Register new employees with the NRA within three days.
• Pay social security contributions monthly by the 25th.
• Be aware of probation and termination rules.
• Secure work permits before employing non-EU citizens.

By following these steps, you can ensure a smooth hiring process and stay compliant with Bulgarian labour law.