Payroll & Workforce Management in Bulgaria

What running payroll in Bulgaria costs and requires

Bulgaria applies a flat 10% corporate income tax rate, unchanged since 2007 and the lowest headline rate in the European Union, alongside a 20% standard VAT rate and employer social security contributions of 18.92% to 19.62% of gross salary depending on activity-based work-injury risk. Dividends distributed from 2026 profit are subject to 5% withholding tax, though this rate held only because a proposed increase to 10% lapsed when early parliamentary elections forced the 2025 budget to be extended into 2026. An EOOD or OOD can be formed with nominal share capital of €1 (redenominated from BGN 2); an AD requires €25,000, of which at least 25% must be paid up at formation.

Bulgaria combines the EU's lowest flat corporate tax rate with a live, dated compliance tail from the 1 January 2026 euro changeover — every contract, payroll run and statutory book had to redenominate at a fixed rate, and dual lev/euro pricing remains mandatory until 8 August 2026.

What sits on top of gross salary

18.92%–19.62% of gross salary (14.12% pension/social + 4.8% health + 0.4–1.1% activity-based work-injury), capped at €2,300/month gross from 1 August 2026 — this is a direct cost the employer budgets on top of gross pay for every hire, not a deduction from it.

• Dual pricing mandate through 8 August 2026 — — every price for goods and services must display in both BGN and EUR, in matching font, size and colour, until the one-year transition period lapses
• Fixed, irrevocable conversion rate — — €1 = BGN 1.95583 applies to all contracts, payroll and statutory accounts; salary conversions must round in the employee's favour
• Dividend tax rate in flux — — the 5% withholding rate held for 2026 only because a proposed rise to 10% lapsed with early elections; groups should not assume the rate is settled long-term
• Size-tiered audit thresholds — — small enterprises face a statutory audit only if they exceed 2 of 3 thresholds (assets, revenue, headcount) for two consecutive years, while medium and large enterprises are always audited regardless

The statutory floor for Bulgaria

€620.20/month gross (BGN 1,213 equivalent; effective 1 January 2026). Underpaying the statutory floor exposes the employer to fines and back-pay claims, and should be checked against any role before an offer is made — thresholds are typically revised annually.

Standard cycle and documentation

Payroll in Bulgaria runs on a monthly cycle, in arrears. Payslips must itemize gross pay, statutory deductions, and net pay — incomplete or incorrect payslips are exactly what a labour or social security audit checks first, so the format is a compliance requirement, not a formality.

Employer obligations and deadlines

Annual corporate tax return filed between 1 March and 30 June of the following year; annual financial statements published in the Commercial Register by 30 June.

Employer registration runs through the Commercial Register and Register of Non-Profit Legal Entities, administered by the Registry Agency (Агенция по вписванията), typically taking 3–7 business days for Commercial Register approval; 2–4 weeks to full operational readiness including bank account and tax registration.

Frequently asked questions