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Bulgaria Professional Employer Organization (Bulgaria PEO)

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Key Takeaways

  • A Bulgaria PEO can help foreign businesses navigate the country’s employment laws and compliance requirements.
  • By using a PEO, businesses can enter the Bulgarian market quickly and compliantly.
  • The Top 5 Bulgaria PEOs are Deel, Remote, Horizons, Bradford Jacobs and Remofirst .

Bulgaria is a country in Europe that offers a favorable business environment for companies looking to expand their operations. However, navigating the country’s employment laws and compliance requirements can be challenging for foreign businesses. That’s where a Professional Employer Organization (PEO) comes in.

A PEO is an entity that contracts with businesses to provide comprehensive human resource outsourcing services. In Bulgaria, a PEO can help foreign companies hire employees and run payroll without first establishing a branch office or subsidiary in the country. This allows businesses to enter the Bulgarian market quickly and compliantly.

By using a Bulgaria PEO, businesses can enjoy several benefits, including access to local expertise and knowledge of the employment laws and regulations. The PEO can also handle all HR-related tasks, including hiring and onboarding, payroll management, and compliance with tax and social security regulations. This allows businesses to focus on their core operations and growth strategies.

What is a PEO in Bulgaria?

A Professional Employer Organization (PEO) is a company that provides HR solutions to businesses, including payroll management, employee benefits, and compliance with local labor laws. PEOs in Bulgaria can help businesses navigate the complex labor market and ensure compliance with local regulations.

Partnering with a PEO in Bulgaria can be beneficial for businesses looking to expand their operations in the country. PEOs have expert knowledge of local labor laws and can provide solutions to ensure compliance. Additionally, PEOs can help businesses save time and money by handling administrative tasks such as payroll management and employee benefits.

When selecting a PEO in Bulgaria, it is important to choose a reliable partner with a proven track record. A reputable PEO will have experience working with businesses of all sizes and will be able to provide customized solutions to meet the specific needs of each client.

Overall, partnering with a PEO in Bulgaria can be an effective way for businesses to manage their HR needs and ensure compliance with local labor laws. By working with a trusted partner, businesses can focus on their core operations and achieve their growth objectives.

Top 5 Bulgaria PEOs

  1. Deel: With its leading international HR platform, Deel has streamlined the process of hiring and paying staff anywhere in the world. The strength of its platform for tech work makes it an attractive PEO company for companies seeking to hire in the Bulgarian labor marketplace.
  2. Remote: Remote’s comprehensive suite of employment services and its strong commitment to ensuring legal compliance makes it a reliable PEO partner for any company seeking to hire in Bulgaria. 
  3. Horizons: Horizons has years of experience in the Bulgarian market and offers an extensive range of professional services that go beyond the standard PEO offering. Alongside global PEO, they also offer recruitment and work visas solutions. 
  4. Bradford Jacobs: This PEO is known for its expertise in European market solutions, offering a range of services to help companies expand and hire in Bulgaria. 
  5. Remofirst: Remofirst offers strong localized support and affordable hiring solutions, making it a good choice for companies that need a cost-effective hiring solution in Bulgaria. 

Benefits of Using a PEO in Bulgaria

A Professional Employer Organization (PEO) can provide numerous benefits to businesses that are looking to expand their operations to Bulgaria. Here are some of the advantages of using a PEO in Bulgaria:

  • Hassle-free Expansion: A PEO can make the process of expanding to Bulgaria much easier by providing support with legal and regulatory compliance, payroll processing, and HR services. This can help businesses avoid costly mistakes and focus on their core operations.
  • Fast Onboarding: PEOs in Bulgaria can help businesses onboard new employees quickly and efficiently. With their expertise in local labor laws and regulations, they can draft labor contracts that comply with Bulgarian law and ensure that all mandatory benefits and contributions are administered correctly.
  • Cost-effective: PEOs in Bulgaria can provide staff leasing and other employer of record services at a lower cost than setting up a legal entity in Bulgaria. This can be especially beneficial for small and medium-sized businesses that are looking to expand their operations on a limited budget.
  • HR Services: PEOs in Bulgaria can provide a range of HR services, including recruitment, training, performance management, and employee relations. This can help businesses attract and retain top talent, improve employee engagement, and enhance overall productivity.
  • Employer of Record Services: PEOs in Bulgaria can act as an Employer of Record (EOR), which means that they can take on the legal and administrative responsibilities of employing staff in Bulgaria. This can help businesses avoid the complexities of local labor laws and regulations, and ensure that they are compliant with all relevant regulations.

Using a PEO in Bulgaria can provide businesses with a range of benefits, including hassle-free expansion, fast onboarding, cost-effectiveness, HR services, and employer of record services.

Bulgaria’s Employment Laws and Compliance

Bulgaria’s employment laws are governed by the country’s labor code. The labor code outlines the rights and obligations of both employers and employees. It also covers various aspects of employment, such as working hours, wages, and leave entitlements. Employers in Bulgaria are required to comply with the local labor laws, which are designed to protect the rights of employees.

One of the main characteristics of the employment relationship in Bulgaria is that the employer is the economically stronger party, with the employees being in a state of dependence on the employer. Bulgarian labor law governs only the provision of employees’ labor to an employer.

Employers in Bulgaria are required to comply with the country’s employment laws and regulations. Compliance with these laws is important to avoid penalties and legal disputes. Employers must ensure that they comply with the relevant legal entity requirements, such as registering with the Bulgarian Commercial Register and obtaining the necessary permits.

Employers in Bulgaria must also comply with various aspects of employment law, such as providing employees with a written employment contract, complying with minimum wage requirements, and ensuring that working hours and conditions comply with the labor code. Employers must also comply with various compliance requirements, such as providing employees with mandatory benefits and contributions.

In summary, employers in Bulgaria must comply with the country’s employment laws and regulations and ensure that they provide employees with the necessary rights and benefits. Compliance with these laws is essential to avoid penalties and legal disputes.

Hiring and Onboarding Process in Bulgaria

Hiring and onboarding employees in Bulgaria can be a complex and time-consuming process. Employers must follow local labor laws and regulations while also ensuring that they are hiring the right talent for their organization.

One option for hiring in Bulgaria is to use a Professional Employer Organization (PEO) such as Skuad. A PEO can provide HR support and manage the hiring and onboarding process for employers. This can include sourcing candidates, conducting interviews, and handling administrative tasks such as drafting employment contracts and registering employees with local authorities.

Alternatively, employers can choose to outsource their hiring to a recruitment agency or handle the process in-house. If choosing to handle the process in-house, employers should be aware of the following steps:

  • Sourcing Candidates: Employers can advertise job openings on job boards, social media, or through referrals. It is important to ensure that job postings comply with local labor laws and regulations.
  • Screening Candidates: Once candidates have applied, employers should review their resumes and conduct initial phone or video interviews to assess their qualifications and fit for the role.
  • In-Person Interviews: After the initial screening, employers should invite qualified candidates for in-person interviews. During the interview process, employers should ask questions that are relevant to the job requirements and assess the candidate’s skills, experience, and cultural fit.
  • Offer and Onboarding: Once a candidate has been selected, employers should make a job offer that includes details such as salary, benefits, and start date. Employers should also provide new hires with an employment contract that outlines the terms and conditions of their employment. During the onboarding process, employers should provide new hires with the necessary training, resources, and support to ensure a smooth transition into their new role.

Employers should also be aware of the compliance issues involved in hiring and onboarding employees in Bulgaria. This includes registering employees with local authorities, providing mandatory benefits such as healthcare and retirement plans, and ensuring that employment contracts comply with local labor laws and regulations.

Overall, the hiring and onboarding process in Bulgaria can be complex, but with the right HR support and attention to detail, employers can successfully recruit and onboard top talent for their organization.

Payroll Management in Bulgaria

When it comes to payroll management in Bulgaria, there are several things to keep in mind. First and foremost, employers are responsible for withholding and paying payroll taxes, managing compensation and benefits coverage, and providing HR compliance guidance. This can be a complex and time-consuming process, which is why many companies turn to global PEOs (Professional Employer Organizations) for assistance.

One important consideration for payroll management in Bulgaria is the various taxes that must be paid. Employers are responsible for paying social contributions, which include pension and health insurance, as well as accident insurance. The percentages for these contributions vary based on the employee’s gross salary. For example, pension insurance is 20% of gross salary, while health insurance is 8% of gross salary. Employers pay 60% of the percentages above, and employees cover the remaining 40%. The tax rate paid by the employee is 10%.

Another aspect of payroll management in Bulgaria is monthly payroll processing. This involves calculating and distributing employee salaries, as well as preparing payroll reports and other documentation. It’s important to ensure that all calculations are accurate and that employees are paid on time to avoid any legal issues.

To ensure compliance with local laws and regulations, companies may also need to file various payroll-related reports with government agencies. This can include reports on social contributions, taxes, and other related matters.

Overall, payroll management in Bulgaria can be a complex and challenging process, especially for companies that are new to the country. Working with a global PEO can help simplify the process and ensure compliance with local laws and regulations.

Employment Contracts in Bulgaria

In Bulgaria, an employment contract is a legally binding agreement between an employer and an employee. It sets out the terms and conditions of the employment relationship, including the rights and obligations of both parties. The employment contract can be concluded for an indefinite period or for a fixed term.

According to Bulgarian labor law, the written form is mandatory for the validity of the employment contract. The employment agreement must be in writing and must be registered with the local office of the National Revenue Agency.

Fixed-term contracts are generally for periods of not less than one year and not longer than three years. A fixed-term contract may be used in specific circumstances, such as when there is a temporary need for an employee, or when the employment is for a specific project or task.

An employment contract in Bulgaria should include the following information:

  • The name and address of the employer and the employee
  • The job title and a brief description of the duties to be performed
  • The date of commencement of employment
  • The duration of the contract (if it is a fixed-term contract)
  • The amount of remuneration and the method of payment
  • The working hours and the holiday entitlement
  • The notice period required to terminate the contract
  • The terms and conditions of any collective agreements that apply to the employment relationship

It is recommended that the employment contract be written in Bulgarian and use the Bulgarian lev currency. Additionally, the contract should include details such as compensation, parental leave allowance, vacation allowance, and any other relevant information.

In some cases, an independent service provider may be classified as an employee if the contract conceals an actual employment relationship. In such cases, the contract will be classified as an employment relationship with all the attendant legal consequences for the parties concerned.

In summary, an employment contract is an essential element of the employment relationship in Bulgaria. It is important for both employers and employees to understand their rights and obligations under the contract and to ensure that the contract complies with Bulgarian labor law.

Working Hours and Leave Policies

Bulgaria has specific regulations governing working hours, leave policies, and other employment-related matters. The standard working time in Bulgaria is 8 hours per day and 40 hours per week. It is possible to have an extended working time, but only under specific conditions. Extended working hours are usually used for operational and business reasons, and the employer must agree to the adoption of longer working hours with the employee organization.

Employees must receive weekly rest periods of at least 48 hours. Night work is defined as working between the hours of 10 p.m. and 6 a.m. The standard weekly working time when undertaking night work is up to 35 hours over five days. The standard working time at night is up to 7 hours in a 24-hour period.

Overtime is discouraged in Bulgaria. However, in exceptional cases, overtime is allowed in the case of extended activities. The maximum number of authorized overtime hours is up to 150 hours per year, up to 30 hours per calendar month for day work, or up to 20 hours for night work. Employers must pay overtime pay of at least 150% of the regular hourly rate for work on weekdays and 200% for work on weekends and public holidays.

All working relationships in Bulgaria are regulated by the Labor Code. The Labor Code specifies the rights and obligations of both employers and employees, the standard working week, the terms for termination, and more. The Labor Code also establishes the minimum annual leave entitlement for employees. Employees are entitled to a minimum of 20 days of paid annual leave per year.

Employees are also entitled to sick leave, maternity leave, paternity leave, and parental leave, as specified by the Labor Code. During sick leave, employees are entitled to receive their full salary for the first three days and then 80% of their salary for the remaining period of sick leave. Maternity leave is 410 days and is paid by the National Social Security Institute. Paternity leave is 15 days and is paid by the employer. Parental leave is available to both parents and can be taken until the child reaches the age of two.

In conclusion, employers in Bulgaria must adhere to specific regulations governing working hours, leave policies, and other employment-related matters. The Labor Code specifies the rights and obligations of both employers and employees, and employers must ensure that they comply with all relevant regulations.

Social Security and Health Insurance in Bulgaria

Bulgaria has a social security system that provides basic protection to its citizens and residents. The social security system is funded by social security contributions, which are mandatory for employees, employers, and self-employed individuals. The system covers various benefits, including pensions, disability, sickness, maternity, and unemployment benefits.

The social security contributions in Bulgaria are divided into two parts: social security contributions and health insurance contributions. The total contribution rate is between 32.7% and 33.4% of gross remuneration, depending on the insurable income. The employer pays between 18.92% and 19.62%, while the employee pays the rest.

The social security contributions are distributed among several funds. The mandatory state pension fund receives 8.22% of the contribution, while the additional mandatory pension insurance fund receives 2.8%. The general illness and maternity fund receive 2.1% of the contribution.

The National Health Insurance Fund (NHIF) manages the health insurance system in Bulgaria. The NHIF is responsible for providing basic health care services to Bulgarian citizens and residents. The NHIF is funded by health insurance contributions, which are mandatory for employees, employers, and self-employed individuals.

The health insurance contribution rate is 8% of gross remuneration, with the employer paying 5.1% and the employee paying 2.9%. The maximum monthly amount of the insurance income is BGN 3,000.

In conclusion, Bulgaria has a social security system that provides basic protection to its citizens and residents. The system is funded by mandatory social security and health insurance contributions. The social security contributions are distributed among several funds, while the National Health Insurance Fund manages the health insurance system.

Tax Regulations in Bulgaria

Bulgaria has a tax system that is based on the principles of equality, universality, and progressivity. The country’s tax laws are regulated by the Ministry of Finance, which is responsible for enforcing tax regulations and collecting taxes.

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Tax Residency

According to the Bulgarian tax law, individuals who have a permanent address in Bulgaria, reside in the country for more than 183 days in any 12-month period, or whose center of vital interests is in Bulgaria are considered residents and are subject to tax on their worldwide income. On the other hand, non-residents are taxed only on their Bulgarian-sourced income.

Income Taxes

The most important taxes in Bulgaria are collected on the state and local levels. These taxes include income tax, social security, corporate taxes, and value-added tax. The income tax rate for individuals in Bulgaria is a flat rate of 10% on their taxable income.

Tax Regulations

Bulgarian tax regulations require that resident and non-resident individuals file a tax return by the end of April of the following year. The tax return must include all income received during the previous year, including income from employment, self-employment, rental income, and capital gains.

Employers in Bulgaria are responsible for withholding and paying taxes on their employees’ income. The employer must also contribute to the social security system on behalf of their employees. The social security contributions are calculated based on the employee’s gross salary and are shared between the employer and the employee.

In conclusion, Bulgaria’s tax system is based on the principles of equality, universality, and progressivity. The country’s tax regulations require that residents and non-residents file a tax return and pay taxes on their income. Employers in Bulgaria are responsible for withholding and paying taxes on their employees’ income and contributing to the social security system.

Termination and Severance in Bulgaria

Termination of employment in Bulgaria can be initiated by either the employer or the employee. The employer can set a probationary period in the employment contract not to exceed six months. Employment contracts may be terminated with or without notice depending on the circumstances or by mutual consent.

According to Bulgarian labor law, there are several reasons for employee dismissal, such as poor performance, redundancy, or misconduct. Employers must follow the procedures set out in the Labor Code when dismissing employees. The reasons for dismissal must be clearly stated, and the employee must be given the opportunity to respond.

Severance pay is not a general provision in Bulgaria. However, workers are entitled to redundancy pay equal to one month’s salary in the case of individual or collective dismissal on economic grounds. The employer, on its initiative, may offer the employee termination of the employment contract in consideration of compensation.

In cases where the employee is dismissed without a valid reason or without following the proper procedures, they can seek legal action. The employee can file a complaint with the Labor Inspectorate or take the matter to court. If the court finds that the employee was unfairly dismissed, they may order the employer to reinstate the employee or pay compensation.

Overall, termination and severance in Bulgaria are governed by the Labor Code, and employers must follow the proper procedures when dismissing employees. Workers are entitled to redundancy pay in certain circumstances, and employees who are unfairly dismissed can seek legal action.

Work Permits and Visas in Bulgaria

When it comes to working in Bulgaria, foreign nationals need to obtain a work permit and a visa. The work permit allows them to work legally in the country, while the visa allows them to enter Bulgaria and stay for a certain period of time.

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Work Permits

Foreign nationals who want to work in Bulgaria must obtain a work permit. Work permits are issued by the Bulgarian Employment Agency (BEA) and are valid for up to one year. To obtain a work permit, the foreign national must have a job offer from a Bulgarian employer.

To apply for a work permit, the employer must submit an application to the BEA on behalf of the foreign national. The application must include:

The BEA will review the application and issue the work permit if all requirements are met. The process can take up to 30 days.

Visas

Foreign nationals who want to work in Bulgaria must also obtain a visa. There are several types of visas available, including:

  • Short-stay visa: Allows the foreign national to stay in Bulgaria for up to 90 days within a six-month period.
  • Long-stay visa: Allows the foreign national to stay in Bulgaria for more than 90 days.
  • D visa: Allows the foreign national to enter Bulgaria for the purpose of obtaining a long-stay visa or a work permit.

To obtain a visa, the foreign national must submit an application to the Bulgarian embassy or consulate in their home country. The application must include:

  • A valid passport
  • A completed visa application form
  • A recent passport-sized photograph
  • Proof of travel arrangements
  • Proof of accommodation arrangements
  • Proof of financial means to support themselves during their stay in Bulgaria

The visa application process can take up to 30 days.

Foreign nationals who are citizens of EU/EEA member states or Switzerland do not need a visa to enter Bulgaria and work. They only need to obtain a work permit.

Expanding Your Business with Bulgaria PEO

Expanding a business into a new country can be a daunting task, especially when it comes to navigating local employment laws and regulations. This is where a Professional Employer Organization (PEO) can be a valuable asset.

Partnering with a PEO in Bulgaria can simplify the process of expanding your business into the country. A PEO acts as a legal employer for your employees in Bulgaria, handling all aspects of payroll, benefits, and compliance with local employment laws. This allows you to focus on your core business activities while the PEO takes care of the administrative tasks.

Using a PEO in Bulgaria also eliminates the need to set up a legal entity in the country, which can be a time-consuming and expensive process. With a PEO, you can start doing business in Bulgaria within days, without having to worry about tax registrations and complicated paperwork.

It is important to note that while a PEO acts as the legal employer for your employees, you still retain full control over their day-to-day activities and responsibilities. The PEO simply handles the administrative tasks related to employment.

Overall, a Bulgaria PEO can be a valuable solution for companies looking to expand their business into the country. It provides a cost-effective and efficient way to hire in Bulgaria while ensuring compliance with local employment laws and regulations.

Bulgaria’s Economic and Labor Market Overview

Bulgaria, an upper-middle-income economy, has undergone significant transformation over the past three decades. It has moved from a highly centralized, planned economy to an open, market-based economy that is securely anchored in the European Union (EU) World Bank.

The Bulgarian labor market is characterized by a skilled workforce with a high percentage of tertiary-educated individuals, but also by low employment rates, particularly among women, young people, and Roma communities OECD. The country’s population is estimated to be around 6.9 million World Bank.

The Bulgarian lev is the country’s official currency. As of October 2023, 1 Bulgarian lev is equivalent to approximately 0.56 US dollars XE.

Bulgaria is a member of the European Union and the capital city is Sofia. The country has a diversified economy with a large manufacturing sector integrated in global value chains OECD. The COVID-19 pandemic has interrupted Bulgaria’s impressive economic progress, but the country has made strong income gains in the past two decades OECD.

Overall, Bulgaria’s economic and labor market overview is characterized by a skilled workforce, low employment rates, a diversified economy, and strong income gains over the past two decades.

Bulgaria Business Guides

Frequently Asked Questions

Bulgaria has strict labor laws that employers must follow when hiring employees. These laws cover areas such as minimum wage, working hours, and employee benefits. Some of the key labor laws in Bulgaria include:

    • The minimum wage is set by the government and is reviewed annually.
    • The standard working week is 40 hours, and overtime must be paid for any additional hours worked.
    • Employees are entitled to 20 days of paid annual leave per year, and additional leave may be granted for special circumstances such as marriage or childbirth.

A PEO, or Professional Employer Organization, is a company that provides HR and payroll services to businesses. In Bulgaria, a PEO can help foreign companies navigate the complex labor laws and regulations when hiring employees. The PEO becomes the employer of record for the employees, handling payroll, benefits, and other HR tasks. The client company retains control over the day-to-day activities of the employees.

Setting up a PEO in Bulgaria requires obtaining the necessary licenses and registrations from the Bulgarian government. The process can be time-consuming and complex, so many foreign companies choose to work with an existing PEO provider in Bulgaria.

Using a PEO in Bulgaria can provide several benefits for foreign companies, including:

    • Compliance with local labor laws and regulations
    • Access to local HR and payroll expertise
    • Reduced administrative burden for the client company
    • Greater flexibility in hiring and managing employees

When using a PEO in Bulgaria, the PEO is responsible for handling payroll taxes and other employment taxes. The client company may still be responsible for corporate taxes and other taxes related to their business operations in Bulgaria.

Employment regulations in Bulgaria cover a wide range of areas, including:

    • Minimum wage and working hours
    • Health and safety in the workplace
    • Discrimination and equal opportunity
    • Termination and severance pay

Foreign companies should be aware of these regulations when hiring employees in Bulgaria and may benefit from working with a PEO to ensure compliance.

cropped Travis Kliever 1
Article By
Travis is a global business development advisor. He has spent the last 14 years supporting business establishment and development in North America, Southeast Asia, and throughout the world. With multiple degrees from the University of Oregon, Travis currently splits his time between the US, and Bali, Indonesia. At RemotePad, Travis writes about remote work, hiring internationally and PEO/EOR business models.

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