Employer of Record Bulgaria: A Complete Guide for 2026

Introduction

Bulgaria has become one of Europe's leading markets for building a team, yet hiring there still requires navigating the labor code, social security filings, and a tax framework many foreign companies are unfamiliar with.

An Employer of Record in Bulgaria removes that burden. The EOR serves as the legal employer on your behalf, allowing you to hire, onboard, and pay staff without first establishing a local entity.

This is significant because incorporating a Bulgarian company takes months and commits your legal and finance teams well before anyone begins work. An EOR avoids that step and helps companies hire compliantly, without setting up any local entity.

This guide explains how employment works in Bulgaria, what it costs, and how an EOR enables you to hire there in weeks rather than months.

Bulgaria at a glance

• Population: 6.67 million
• Currency: Euro
• Capital: Sofia
• Languages spoken: Bulgarian
• GDP: USD 113.34 billion

Employment In Bulgaria

The workforce in Bulgaria is divided into three categories under the Bulgarian labor law and the Social Security Law. These employees are known as first, second, and third-category workers. The third category is the most popular, with favorable working conditions. The Council of Ministers of Bulgaria is primarily responsible for the segregation of work categories.

Here are some of the rights and entitlements of workers according to Bulgaria's employment laws in brief:

Leaves and holidays

Social security

Social security in Bulgaria offers financial protection from accidents at the workplace, illness, life risks, old age, unemployment, maternity, and employee death.

1. Each employee needs to be mandatorily insured.
2. The social security contribution calculations include:

• The total social security and health insurance rate is about 32.7% to 33.4% of gross salary, split between employer and employee.
• Of this, the employer pays roughly 18.92% to 19.62%, and the employee pays 13.78%.
• Health insurance = 8% of gross salary in total, split 4.8% employer and 3.2% employee.
• Pension = the state pension fund plus a 5% supplementary mandatory pension for those born after 1959, not a flat 5% alone.
• Occupational accident insurance is borne by the employer and costs between 0.4% and 1.1%, depending on economic activity.
• Contributions apply only up to a maximum monthly insurable income of BGN 4,600 (about EUR 2,352) for 2026. Income above this cap is subject only to the flat 10% income tax.

The details mentioned here are just a glimpse into the clauses of Bulgarian labor law. The first thing you need to do as a company looking to expand in Bulgaria is to get well-versed in the local labor and employment regulations. It is a challenging task and can take time, not to mention the in-house expertise required to do it.

With an Employer of Record in Bulgaria, such as Skuad, these processes become simpler. We help you expand in Bulgaria while managing the cost and compliance side of employment.

Contractors vs. full-time employees

Choosing between a contractor and a full-time employee in Bulgaria is really a compliance decision, since getting the classification wrong is reclassified as employment and carries penalties for both sides. Skuad helps you get it right either way.

As the legal employer, Skuad supports full-time hiring without a local entity, and it also supports compliant contractor agreements with built-in classification checks, all from one platform. See pricing to compare both models.

Hiring in Bulgaria

There are two traditional routes to hiring in Bulgaria. You can bring in a local recruitment agency to cover the HR side or source candidates directly from job portals like Jobs, JobsTiger, and Karieri.

Either way, sourcing is only the first step. Once you have a candidate, you still need to verify them and put them on a compliant Bulgarian contract, and without a local entity, that is where most hires stall.

Skuad acts as the legal employer in Bulgaria, so you can onboard without setting up an entity, and Skuad supports background checks as part of the same workflow.

Here is what Skuad helps with:

• Identity verification, employment history, criminal record, and education checks before contracts are signed
• Employment contract generation aligned with local labor laws across 160+ countries
• Statutory contribution workflows covering applicable social security, health, and pension obligations
• Payroll processing in 70+ currencies with accurate tax withholding and statutory deductions
• Statutory benefits and paid leave administration in line with local requirements

For a team without a Bulgarian entity, this turns a long sourcing-to-onboarding process into a single workflow.

Probation & termination

Here are some of the legal provisions of probation and termination in Bulgaria:

EOR solution

An employer of record is a company that already holds a legal entity in your target market and employs staff there on your behalf. Instead of registering your own Bulgarian company, you hire through the EOR, which becomes the legal employer while you direct the day-to-day work. Employer of record services cover the compliance side, from payroll and tax filings to the contract clauses that Bulgarian labor law requires.

The alternative, setting up your own entity, means committing registered capital, filing with the Commercial Register, and taking on ongoing tax and accounting obligations before you can legally pay a single person.

Skuad helps remove that dependency. Skuad acts as the legal employer in Bulgaria, so your company can hire, onboard, and pay employees without entity setup or in-house local payroll infrastructure.

Book a demo to see how Skuad gets your first Bulgarian hire onboarded in weeks, instead of months.

Types of visas In Bulgaria

Work authorization, long-stay visas, and residence permits are necessary for non-EU nationals who want to work, reside, and receive a salary in Bulgaria. Bulgaria follows the common visa policy of the European Union and issues three major types of visas: Visa A, Visa C, and Visa D. Visa A is for airport transit, Visa C is for short stays, and Visa D is for long stays, including work, residence, study, or family-related purposes.

The list of mandatory documents for getting a Bulgarian visa may include:

• The list of mandatory documents for getting a Bulgarian visa may include:
• A valid foreign travel document
• A passport valid for at least three months after the intended departure date from Bulgaria
• At least two blank passport pages
• A passport issued within the last 10 years
• A photocopy of the first page of the travel document
• A photocopy of previous Bulgarian, Schengen, UK, or US visas, if any
• A full-color passport photograph
• Medical insurance valid across EU member states
• Travel tickets, booking confirmation, or proof of financial means
• Additional documents, depending on the visa type and purpose of stay

The process of applying for a visa in Bulgaria is as follows:

• The process of applying for a visa in Bulgaria is as follows:
• The first step is to identify the correct visa type based on the purpose and duration of stay.
• Visa applications are submitted through Bulgarian diplomatic and consular representations.
• Applications are usually submitted no earlier than three months before the intended travel date.
• The visa application form must be completed in English or Bulgarian and signed by the applicant.
• A mandatory personal interview is required when applying for a Type D long-stay visa.
• After arriving in Bulgaria, foreign nationals who plan to reside in the country may need to complete the residence permit steps with the relevant authorities.

Complex visa formalities and work authorization requirements can slow down international hiring in Bulgaria.

Bringing a foreign hire into Bulgaria means coordinating work authorization, Type D visa documentation, consular procedures, and residence permit steps before the employee can legally work and reside in the country. Coordinating that sequence across consulates and immigration authorities adds real lead time to any international hire.

Skuad’s global immigration support helps with the work permit process on your behalf, including:

• Supporting work permit and visa applications for foreign employees joining your team
• Helping coordinate visa documentation with relevant consulates and immigration authorities
• Assisting with residence permit steps as required by local immigration law
• Helping track documentation requirements and deadlines across the full permit lifecycle
• Helping keep your team aligned with compliance requirements as permit rules change

Work permits

Employers who wish to hire a workforce for their unit in Bulgaria need to apply for a work permit in Bulgaria. The requirements for a work permit are:

Also, work permits are a must for foreign employees. It is not possible to get a Bulgarian work permit without a job offer.

Payroll & taxes in Bulgaria

Employee taxation

Incorporation

Companies looking to set up in Bulgaria usually choose between a single-owner limited liability company (EOOD), a multi-member limited liability company (OOD), or a joint-stock company (EAD or AD). Each form has its own capital, registration, and governance requirements, and all must be registered with the Commercial Register before they can trade or hire.

Setting up a subsidiary gives you full control, but it also commits your legal and finance teams to ongoing filings, accounting, and tax obligations from day one. That setup takes time, and for a company that just wants to hire a few people in Bulgaria, it is often more overhead than the situation calls for.

Skuad helps remove that dependency. Skuad acts as the legal employer in Bulgaria, so your company can hire, onboard, and pay employees without registering a local entity first.

For teams testing the market or scaling a few roles, this is the difference between hiring this month and waiting on incorporation before the first employee starts. Book a demo to see how Skuad gets your first Bulgarian hire onboarded.

Professional Employer Organization (PEO)

A Professional Employer Organization in Bulgaria is another way to get HR support when you expand, but it works differently from an EOR, and the difference matters for how quickly you can start.

A PEO operates as a co-employer. It shares employment responsibilities with you, such as payroll, benefits administration, and HR compliance, but it is not the legal employer of your staff. That means you still need to register your own legal entity in Bulgaria before you can use a PEO.

An EOR works the other way around. It is already the legal employer through its own registered entity in Bulgaria. The EOR signs the employment contracts, runs payroll, and carries the tax and statutory compliance on your behalf, so you can hire and pay employees without setting up a Bulgarian company at all.

Hire in Bulgaria without setting up an entity

Skuad helps simplify the operational side of hiring in Bulgaria, including employment contracts, payroll in 70+ currencies, statutory benefits, social security contributions, work permits, residence permit support, and compliance tracking, so your team can stay focused on business priorities.

Companies in SaaS, IT services, BPO, and technology can use Skuad to support their expansion into Bulgaria, keep up with changing employment requirements, and grow local teams without setting up HR infrastructure from the ground up.

Book a demo to see how Skuad can support your first hire in Bulgaria.

FAQs

1. What is an employer of record in Bulgaria?

An employer of record in Bulgaria is a local company that legally employs your staff on your behalf, so you can hire without registering a Bulgarian entity. It signs compliant contracts, runs payroll, and files with the National Revenue Agency and National Social Security Institute.

2. How much does an employer of record in Bulgaria cost?

Most EOR providers in Bulgaria charge a flat monthly fee per employee, typically around $200 to $700, depending on headcount, salary, and scope. That sits well below the cost of setting up and running your own Bulgarian entity.

3. What are the risks of misclassifying a worker as a contractor in Bulgaria?

Bulgarian law treats disguised employment as a real employment relationship, no matter what the contract says. If authorities reclassify a contractor as an employee, the company can face back payment of social security and health contributions, unpaid income tax, and penalties under the labor code.

4. Is it better to use an EOR or set up an entity in Bulgaria?

It depends on scale and timeline. Setting up a Bulgarian entity gives you full control but takes weeks to months, requires registered capital, and commits you to ongoing tax filings and accounting. An EOR lets you hire in days without that overhead, which suits small teams or market testing.

5. How quickly can an EOR onboard an employee in Bulgaria?

Most EORs can onboard a Bulgarian employee within a few days to about two weeks once you share the candidate's details and signed contract. The employee must be registered with the National Revenue Agency within three days of starting, and a good EOR handles that filing automatically.