Payroll and social security contribution management (HR and Payroll) is a mandatory requirement for any company with at least one employee. Errors in payroll can result in fines from the Labor Inspectorate and the National Social Security Institute (NOI), employee dissatisfaction, and serious legal consequences. In this guide, you will find everything you need to know about compliant HR and payroll services in Bulgaria.
What does HR services include?
Our comprehensive HR services include:
Payroll and Calculations
- Calculation of Gross and Net Wages
- Calculation of Social Security Contributions for the Employer and the Employee
- Calculation of income tax (Personal Income Tax Act — 10% flat tax)
- Processing of additional compensation: bonuses, overtime, night shifts, business trips
- Deductions: alimony, garnishments, tax liabilities
Insurance documentation
- Submitting Data to the National Social Security Institute (Form D1 — Social Security Declaration)
- Registration and Deregistration of Employment Contracts with the National Revenue Agency (Form D7)
- Certificates: Form 1 (for the National Social Security Institute), Form 6 (annual social security declaration)
- Sick leave — processing, calculating benefits
- Leave — paid annual leave, maternity/paternity leave, unpaid leave
Employment Contracts and Documentation
- Drafting of employment contracts (fixed-term and indefinite-term)
- Supplementary agreements — changes to job title, salary, and working conditions
- Orders — regarding the use of leave, disciplinary measures, and termination of employment
- Employment records and work books
- Job Description
Representation before institutions
- NOI (National Social Security Institute) — for audits, inquiries, and benefits
- Labor Inspectorate — during inspections to ensure compliance with labor laws
- National Revenue Agency — Social Security Declarations and Audits
Social Security Contributions in Bulgaria for 2026
Rates under an employment contract
Social security contributions are split between the employer and the employee:
| Type of insurance | Employer | Employee | Total |
|---|---|---|---|
| Social Security (Pension) | 9,22% | 6,78% | 16,00% |
| Supplementary Pension Plan (SPP) | 2,8% | 2,2% | 5,0% |
| Health insurance premiums | 4,8% | 3,2% | 8,0% |
| General Illness and Maternity | 2,1% | — | 2,1% |
| Work-related accident and occupational disease | 0.4%–1.1% | — | ~0,5% |
| Total (approximate) | ~19,32% | ~13,78% | ~31,60% |
The exact rates for workplace accidents are determined by industry. The figures above are estimates for 2026—please consult ConsultPlus for accurate calculations for your business.
Minimum Social Security Income by Economic Activity (2026)
The minimum social security threshold depends on the employer’s economic activity and the employee’s position. Failure to comply with the minimum social security thresholds is a common reason for fines imposed by the National Revenue Agency.
The minimum wage for 2026 is EUR 620.20 per month (≈ 1,213 BGN).
The maximum taxable income is EUR 2,111.64 per month (≈ BGN 3,750 — no social security contributions are due on amounts above this threshold).
Step by Step: Hiring Your First Employee
Step 1: Sign an employment contract
The employment contract must be concluded in writing before the employee starts work. Required elements:
- Parties to the contract (employer and employee)
- Position (Job Description)
- Place of work
- Term (open-ended or fixed-term)
- Working hours (full-time—8 hours, or part-time)
- Base salary
- Paid annual leave
Step 2: Notify the National Revenue Agency (Form D7)
Before starting work (or, in urgent cases, on the first day of employment), you must submit Form D7 to the National Revenue Agency (NRA). The deadline is three days before starting work, or on the same day in exceptional cases. Failure to submit the form will result in a fine of EUR 750.
Step 3: Obtain an employment record book
When an employee is hired for the first time, an employment record book is opened for them. For subsequent employers, entries are made in the existing record book.
Step 4: Calculate and pay the salary
- Calculate the net pay after deductions (social security contributions and income tax)
- Pay salaries by the agreed deadline (usually by the 25th of the following month)
- Keep the payroll records (for audit by the National Revenue Agency)
Step 5: File Form D1 (monthly)
Form D1 must be submitted to the National Social Security Institute (NSSI) every month, containing information on each employee’s social security coverage. Deadline: by the 25th of the following month. Late submission results in penalties.
The Most Common Mistakes in Payroll
- Failure to file Form D7 prior to entry — Fine of up to EUR 750 per violation
- Failure to meet the minimum social security contribution thresholds — Contributions below the established minimum will result in the difference being collected by enforcement, plus interest
- Incorrect Calculation of Sick Leave Pay — Errors in Benefits Are Reviewed by the National Social Security Institute
- Unrecorded changes in working conditions — Any change in salary, position, or working hours requires a signed supplementary agreement
- Late payment of wages — A violation of the Labor Code, punishable by fines imposed by the Labor Inspectorate
- Incomplete employment records — During an inspection by the Labor Inspectorate, the absence of required documentation results in immediate penalties
Payroll outsourcing versus an in-house payroll department
Why should you hire payroll services?
| Criterion | In-house HR department | Outsourcing through ConsultPlus |
|---|---|---|
| Expense | Salary for a Payroll Specialist (EUR 500–1,000/month) | EUR 8–15 per employee per month |
| Legal expertise | It depends on the qualification | A specialized team with up-to-date experience |
| Representative Office | Not guaranteed | On |
| Flexibility | Difficult with a small staff | Scalable as the business grows |
| Risk of errors | Higher | Lower (specialized team) |
For companies with up to 20–30 employees, outsourcing payroll is almost always a more cost-effective solution.
Frequently Asked Questions
What is the minimum wage in Bulgaria for 2026?
The minimum wage for 2026 is EUR 620.20 gross per month (≈ 1,213 BGN). The maximum insured income is EUR 2,111.64 per month(≈ 3,750 BGN).
What social security contributions does the employer pay?
The employer pays approximately 19.32% of the gross salary: Social Security (9.22%), Pension Insurance (2.8%), health insurance (4.8%), general illness and maternity insurance (2.1%), and workers’ compensation (~0.4%). The exact rates depend on the economic activity code.
When must Form D7 be submitted when hiring an employee?
Form D7 must be submitted no later than 3 days before the employee’s start date. In urgent cases, it must be submitted on the day the employee starts. Failure to submit the form may result in a fine of up to EUR 750.
Is it mandatory to register the manager of a limited liability company (LLC) for social security?
Yes. The manager of an LLC who is hired without an employment contract must register as a self-employed person. Health and pension contributions are due on the selected insured income (not less than the minimum for self-insured persons— EUR 620.20 for 2026).
How ConsultPlus supports your HR and Payroll Department
ConsultPlus offers comprehensive HR and payroll services for companies in Plovdiv, Sofia, and throughout Bulgaria:
- Payroll processing — monthly, with guaranteed deadlines
- Social security documentation — Forms D1, D7, and all required declarations
- Employment records — contracts, orders, performance reviews
- Representation before the National Social Security Institute (NOI) and the Labor Inspectorate — during inspections and inquiries
- Labor Law Consultations — Hiring, Changes, and Termination
- 100% digital exchange — no paper, no in-person visits
Contact us for a free consultation and quote: +359 897 953365 (Plovdiv) | +359 897 953363 (Sofia) | office@consultplus.bg
