BULGARIA Law and Practice Contributed by: Marin Sarafov, Petya Norova, Iva Georgieva and Eduard Milchev, G&P Law
5. Tax Law 5.1 Taxes Applicable to Employees/ Employers
the competent Employment Agency. Non-compliance with the strict collective dismissal legal framework may result in material administrative sanctions for the employer but does not affect the lawfulness of each
individual termination of employment. 4.5 Employee Representations
In the context of employment relationships under Bul - garian law, the following public receivables must be paid: • income tax; • social securities contributions; • health insurance contributions; and • contributions to the Guaranteed Workers’ and Employees’ Receivables Fund – not applicable for 2026, until the adoption of the State Budget Act for 2026 by the National Assembly. Income tax is withheld and paid by the employers. It represents 10% of the remuneration paid to the employee, deducted with the contributions for health insurance and social securities owed by the employee, and the tax benefits, if any. Since documentation and payments are made by employers, employees are not obliged to declare their incomes to the NRA, unless they receive any payments on the basis of other rela - tions. Other taxes may also apply to employees if they work and receive remuneration or other payment on the basis of other contracts different from employment agreements. The following social contributions (charges) are usu - ally paid in the context of employment relationships: • pension contributions – between 12.8% and 20.8% of the insurance income depending on several fac - tors, eg, date of birth; • general illness and maternity contributions – 3.5% of the insurance income; • unemployment contributions – 1% of the insurance income; and • work-related accident and professional illness con - tibutions – defined in the State Budget Act. The insurance income is defined by the gross wage. If the gross wage is below the minimum for the state, payments will be made on the basis of the minimum gross wage. The State Budget Act usually defines a maximum insurance income, and for any payments received over that maximum, no social charges will be paid.
Bulgarian employment law recognises several forms of employee representation but does not require employers to establish a permanent employee repre - sentative body comparable to a “works council” (pop - ular in other EU countries). Employee representation is primarily exercised through trade union organisations and employee representatives. Trade Unions Trade unions have statutory rights to represent and protect the collective interests of their members, conduct collective bargaining, negotiate and con - clude collective bargaining agreements, and monitor employers’ compliance with employment legislation and collective bargaining agreements. In parallel, employees may elect representatives for informa - tion and consultation purposes, who represent all employees and their interests, irrespective of trade union membership. Employee Representatives The Labour Code requires employers to provide infor - mation and conduct consultations with employee representatives in the cases prescribed by law, par - ticularly where proposed measures are likely to affect employees’ interests. These include, among others, collective redundancies, transfers of undertakings, etc. Employees also elect health and safety representa - tives, who participate in monitoring compliance with occupational health and safety requirements, work - place risk assessments and the development of preventative measures, while co-operating with the employer and the competent public authorities on occupational health and safety matters.
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