Payroll in Bulgaria

Mercans is your premier partner for top-quality payroll services in Bulgaria, offering both Managed and SaaS solutions. Our steadfast commitment to delivering exceptional payroll outsourcing in Bulgaria is unmatched. Drawing from extensive experience in the payroll sector, Mercans ensures precise and compliant payroll services, establishing us as the preferred option for businesses of all sizes. Count on Mercans for prompt and accurate payroll transactions, complemented by the convenience of multi-currency payments tailored to the Bulgarian market. As your dedicated local payroll provider in Bulgaria, we feature a team of in-country payroll specialists well-versed in local regulations, providing comprehensive assistance for a seamless payroll experience customized to your business requirements.

Payroll Services in Bulgaria

At Mercans, our unwavering commitment to local compliance in Bulgaria goes beyond a mere checklist. We proactively navigate the intricate regulatory landscape — including Bulgaria’s transition to Euro-denominated payroll — ensuring your business aligns seamlessly with the country’s norms. Here’s an insight into how Mercans expertly manages key activities, safeguarding both compliance and operational efficiency:

Comprehensive Services Include

Payroll Settlement

• Precise calculations encompassing income tax withholding, social and health insurance, and other deductions.
• Inclusion of the mandatory length-of-service bonus, overtime, and applicable allowances.
• Monthly file preparation for Declaration 1 and Declaration 6 filings with the National Revenue Agency (NRA).

Payment Processing

• Generation and delivery of payslips.
• Efficient management of statutory withholdings and net pay calculations.
• Streamlined Euro-denominated payments through a compliant local bank account.

Regulatory Compliance

• Registering each new employment contract with the NRA within 3 days, as Bulgarian law requires.
• Accurate monthly withholding and remittance of income tax, social insurance, and health insurance contributions.
• Preparation of the employer-side annual tax reconciliation for each employee.

Social Insurance Management

• Monthly Declaration 1 and Declaration 6 filings covering pension, health, and other social insurance contributions.
• Certificate issuance and secure payment records.
• Expert management of NRA filings and employer account administration.

Bulgaria’s Euro Adoption (2026)

Bulgaria adopted the Euro as its official currency on 1 January 2026, replacing the Bulgarian Lev at the fixed, irrevocable conversion rate of 1 EUR = 1.95583 BGN. Payroll, banking, and all statutory filings for periods from January 2026 onward are now conducted entirely in Euro; periods through 31 December 2025 remain denominated in Lev regardless of when they are later corrected or referenced. For employers, this significantly simplifies multi-country payroll consolidation for companies already paying elsewhere in the Eurozone.

Minimum Wages in Bulgaria

Bulgaria’s national minimum wage is EUR 620.20 per month, effective 1 January 2026 — the first minimum wage set in Euro following Bulgaria’s currency changeover.

Working Hours

The standard legal working week in Bulgaria is 40 hours, structured as 8 hours per day. The minimum daily rest period is 12 consecutive hours, and the minimum weekly rest period is 48 consecutive hours, normally including Sunday.

Payroll Cycle in Bulgaria

Salaries in Bulgaria are paid monthly, now in Euro, typically on the last working day of the month, via bank transfer. Since 1 January 2026, all Bulgarian bank accounts are Euro-denominated; a one-month dual-circulation window in January 2026 allowed remaining Lev cash to be converted, but ongoing payroll now runs exclusively in Euro.

Company Registration in Bulgaria

When establishing a business presence in Bulgaria to run local payroll, foreign companies typically choose from the following structures, registered through the Registry Agency’s Commercial Register:

Setting up and maintaining any of these structures — including the ongoing corporate compliance obligations that come with them — requires dedicated legal and administrative resources. Mercans’ Employer of Record and Global Payroll solutions allow companies to hire and pay employees in Bulgaria without first establishing any of these entities.

Employer Registration for Payroll in Bulgaria

A locally incorporated company or branch is linked to the National Revenue Agency (NRA) automatically through its Unified Identification Code (UIC) issued at Commercial Register incorporation, which also serves as its social insurance identifier — there is generally no separate application step for a locally registered employer. Foreign companies employing in Bulgaria without a local entity, however, must complete a distinct NRA registration, submitting apostilled corporate documents and a formal application for a service number.

Every individual employment contract must separately be registered with the NRA within 3 days of its conclusion — the employee may only start work once this registration is confirmed. Opening a corporate bank account requires notarized incorporation documents, proof of registered address, identification for managers and signatories, and a beneficial-ownership declaration.

Payroll Taxes in Bulgaria

Personal Income Tax in Bulgaria

Bulgaria applies a flat personal income tax rate of 10% on employment income — one of the lowest flat rates in the European Union.

Tax Reporting

Employers file two monthly declarations with the NRA: Declaration 1, covering individual data on each insured employee’s income and contributions, and Declaration 6, summarizing the employer’s total contributions and tax due. Both the filing of these declarations and the corresponding payment of withheld income tax, social insurance, and health insurance are due by the 25th of the month following the reporting period.

Social Security and Health Insurance in Bulgaria

Bulgaria’s social insurance system, administered by the National Social Security Institute (NSSI) and collected through the NRA, covers pension, general sickness and maternity, unemployment, and accident-at-work insurance, alongside health insurance administered by the National Health Insurance Fund (NHIF).

Combined employer and employee contributions total approximately 32.7% to 33.4% of gross salary, calculated between a minimum insurable income (tied to the minimum wage) and a periodically updated maximum insurable income threshold. Mercans confirms the current threshold for each engagement.

Annual Payroll Reconciliation in Bulgaria

Because Bulgaria applies a flat 10% tax rate, most employees with a single employer throughout the year never personally file an annual return — instead, the employer that was the employee’s primary employer as of 31 December must complete an annual reconciliation of the tax base and any tax due, generally by 31 January of the following year. An individual annual tax return is only required where an employee had multiple employers during the year, additional non-employment income, or otherwise falls outside the employer-reconciliation route, with a standard deadline of 30 April.

Termination Payroll in Bulgaria

On termination, outstanding remuneration, any severance owed, and compensation for unused annual leave are generally settled at the termination date. The employer must issue a termination order stating the legal grounds, complete and return the employee’s employment record book (trudova knizhka) — delayed return can itself trigger compensation owed to the employee — and, on request, issue an income service note and insurance service certificates within 14 days.

Severance for redundancy is generally 1 month’s gross salary, severance of up to 2 months’ gross salary may apply in certain cases of illness or incapacity, and employees with at least 10 years of service with the same employer within the last 20 years are entitled to 6 months’ gross salary in specified circumstances.

Bulgaria Compliance Requirements

Employee Benefits in Bulgaria

Mercans, in adherence to Bulgarian labour law, ensures that employees receive the right benefits by staying vigilant about statutory deductions and entitlements.

• Annual Leave: A minimum of 20 working days per year, which generally expires 2 years after the year it accrued if unused, and must be compensated on termination if not taken.
• Length-of-Service Bonus: A mandatory pay supplement of at least 0.6% of base salary per year of recognized professional experience.
• Sick Leave: The employer pays the first 3 days at 70% of average daily gross remuneration; from day 4, the National Social Security Institute pays 80% (or up to 90% for work-related injury or occupational disease).
• Maternity Leave: 410 days total, of which 45 days must be taken before the due date, paid at 90% of average income.
• Paternity Leave: 15 days of paid leave from the day of childbirth.

Benefits of Payroll Outsourcing in Bulgaria

For our payroll services, we have strategically implemented a robust tool designed to seamlessly operate across diverse countries, ensuring regional uniformity and meeting the specific requirements of our clients. This tool reflects our commitment to delivering:
Stringent Data Security Measures
Incorporating industry-leading security measures to safeguard sensitive data, including compliance with GDPR, SOC, ISO, and OWASP standards. ISO 27001 and ISAE3402 certifications ensure adherence to stringent information security protocols, guaranteeing the highest level of data protection.
Consistent and Sustainable Performance
Ensuring reliable performance that meets the dynamic demands of payroll services, providing clients with consistent and sustainable solutions through Bulgaria’s transition to the Euro.
Flexibility and Scalability
Offering flexibility and scalability to accommodate evolving client needs and adapt to changing business environments, ensuring seamless integration and expansion.
Collaborative Cloud Platform
Utilizing a cloud-based platform that facilitates collaborative work, promoting efficiency and accessibility across teams, enhancing collaboration and productivity.
Key Features of Electronic Payroll Support

• Full Traceability: Enabling a traceable process from generation to transmission and validation, ensuring transparency and accountability at every step.
• Efficiency in Human Resources: Enhancing the efficiency of the human resources area by streamlining the payroll settlement process, resulting in significant time savings and improved resource allocation.
• Certified Suppliers: Partnering with certified suppliers who uphold the highest standards of information security with ISO 27001 certification, ensuring secure data transmission processes and bolstering the integrity of our services.

Payroll Solutions in Bulgaria

Uncover the potential of seamless payroll processing in Bulgaria with Mercans’ Global Payroll Solutions. Our flexible models ensure local compliance, support multi-currency transactions, and offer connectivity to global Human Capital Management (HCM) and Enterprise Resource Planning (ERP) systems. Paying correctly has never been more straightforward.
Explore Our Flexible Models

• SaaS (Software as a Service): Tailored for enterprise businesses managing multi-country payroll with intricate complexities arising from diverse data points, locations, currencies, and languages. Our SaaS model streamlines operations for optimal efficiency.
• Managed Services: Designed for mid-sized and large enterprise businesses, our Managed Services model caters to those operating multi-country payroll. It provides on-demand HR expertise, ensuring security, reliability, and compliance across the board.
• HRMS (Human Resource Management System): Perfect for mid to large businesses in expansion mode, our HRMS model offers a comprehensive range of functionalities, including payroll and benefits. Businesses can select the specific features they need, ensuring a tailored and efficient solution.

Streamline Payroll with Mercans’ Technology and Integrations

Mercans leads the way in providing top-tier payroll solutions in Bulgaria, offering a diverse range of tailored options to meet our clients’ unique needs. Choose Mercans as your reliable ally, ensuring a smooth and effective payroll process in Bulgaria’s dynamic business environment.

• Cutting-Edge Technology: Explore the forefront of innovation with Mercans’ state-of-the-art technology, driving our global payroll solutions.
• Seamless Integrations: Effortlessly integrate your Human Capital Management (HCM) systems with Mercans’ solutions, enhancing connectivity and efficiency.
• Recognized Excellence: Partner with an esteemed organization known for its commitment to excellence in delivering outstanding payroll services.

Outsource to Payroll Company in Bulgaria

In the dynamic business landscape of Bulgaria, Mercans stands as a beacon of excellence, offering tailored solutions to meet the diverse needs of our clients. With a stable economy, low flat-rate tax system, and strategic position at the heart of the European Union, Bulgaria presents attractive opportunities for business expansion, particularly as it transitions to Euro-denominated payroll in 2026. Mercans is your trusted partner in navigating the complexities of the Bulgarian market. Our unwavering commitment to 100% local compliance, coupled with our extensive knowledge of Bulgarian labor laws, ensures that businesses establish a solid presence in Bulgaria with ease. By choosing Mercans, companies can leverage our expertise to streamline operations, adhere to statutory requirements, and lay the groundwork for sustained growth in this dynamic environment. With Mercans by your side, embark on a journey of success and prosperity in Bulgaria’s thriving business landscape.