The individual income tax is a flat rate of 10%.

Note: apart from this income tax, employees will have to contribute 13.78% to Social Security.

The employer cost is generally estimated between 9-19% of the employee's salary.

• Pension Fund - 13.72%
• Health Insurance - 4.80%
• Occupational Accident and Disease Fund - 0.40%
• Labor Safety Company Insurance - BGN 25,00

Pregnant employees, who have worked for 12 consecutive months are entitled to 410 days of paid leave. The employee must take 45 days before the child's birth and 45 days after the birth. The remaining days can be taken at the employee’s discretion until the child is two years old.

The employee will receive different compensation during this period depending on when the leave was taken. The National Insurance Institute is responsible for payment and will directly pay the employee.

Employees, who have worked for 12 months, are entitled to 15 days of paid paternity leave. The employee will receive 90% of their salary during this period paid directly by the National Insurance Institute.

The employee can extend leave an additional 6 months which is unpaid.

In Bulgaria, no law covers parental leave. However, employees may be entitled to maternity leave and paternity leave. Employees can extend leaves by:

• Transferring maternity leave, including cash benefits, to the partner after six months of leave.
• Requesting Raising Child Benefits that the National Insurance Institute will cover.

Terminations in Bulgaria can be complex. There is no at-will termination and it is not possible to terminate a contract without cause.

Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer based on:
  • Probation period
  • Disciplinary dismissal
  • Business closure
  • Reduction of work.
• By the expiration of the contract

Untaken holidays must be paid out upon termination as well as any unpaid commission or bonuses.

In Bulgaria, employees are entitled to severance pay. Severance pay varies according to the grounds on which the agreement is terminated:

• The employer closes the entity or reduces the staff: one-month severance must be paid.
• The employer terminates the employment relationship due to health issues, or risk to the health of the employee if they work for at least five years: two months of severance must be paid.
• The employee reached the age of retirement:
  • Length of employment is less than 10 years: three months of severance
  • Length of employment is 10 or more years: six months of severance
• The contract is terminated against payment of compensation by mutual agreement on the initiative of the employer: at least four months of severance must be paid.
• The employer terminates the contract without providing the proper notice: three months of severance pay.

Both full-time and part-time employees are entitled to 20 days of paid time off (PTO) a year. PTO accrues monthly 1.67 days per month.

If a part-time employee works less than four hours per day, the PTO will be calculated proportionally to the time worked.

Bulgaria celebrates 13 public holidays per year. These include:

1. New Year's Day
2. Bulgaria Liberation Day
3. Good Friday
4. Labour Day
5. Orthodox Easter
6. Orthodox Easter Monday
7. Đurđevdan
8. Day of Slavonic Alphabet, Bulgarian Enlightenment, and Culture
9. Unification Day
10. Independence Day
11. Eastern Orthodox Christmas Eve
12. Orthodox Christmas Day
13. 2nd Day of Christmas

Contracts must be in Bulgarian and can be bilingual. They must be in writing and signed by both parties. A contract must include:

• Name
• Start date
• Length of the employment
• Job description based on the national code of the National Jobs Classificatory Database
• Termination conditions
• Years of service