Bulgaria (BG)

Bulgaria is the oldest state in Europe (founded 681 AD), a member of the European Union since 2007, and one of the most affordable countries for expats in the EU.

Capital: Sofia

Region: Europe

Language: Bulgarian

Currency: BGN (лв)

Cost of living: Very affordable (index 37)

Emergency: 112

Tax & Payslip Guide

Understanding your taxes in Bulgaria — tax year Calendar year: 1 January – 31 December..

📅

Tax Year

Calendar year: 1 January – 31 December.

⏰

Filing Deadline

Annual tax return (Годишна данъчна декларация): 30 April of the following year (for most taxpayers). Electronic filing via NRA portal (e-uslugi.nra.bg) deadline is 30 June (with 5% discount on any tax due if filed and paid electronically before 31 March). Employees with only employment income from a single employer typically do not need to file — employers file on their behalf.

🧾

VAT (Standard)

20%

📊 Income Tax Brackets

Income from	Income to	Rate	Notes
0	∞	10%	Flat 10% personal income tax rate on all taxable income — one of the lowest in the European Union. No progressive brackets. Applies to employment income, self-employment income, rental income, and most other sources. The flat tax makes Bulgaria popular for tax optimisation.

🏛️ Social Contributions

Pension insurance (ДОО — Държавно обществено осигуряване)

Employee: 8.78%

Employer: 9.9%

State pension contributions. Split between employee (8.78%) and employer (9.9%). The employee pension rate rose from 7.9% to 8.78% effective 1 January 2026. Calculated on gross salary up to the maximum insurable income ceiling — raised to 4,130 BGN/month for 2026.

Supplementary mandatory pension (ДЗПО — Допълнително задължително пенсионно осигуряване)

Employee: 2.2% (for workers born after 31 Dec 1959)

Employer: 2.8%

Mandatory contributions to private pension fund (Pillar 2). Only for workers born after 31 Dec 1959. Contributions go into individual accounts with licensed pension funds.

Health insurance (Здравно осигуряване)

Employee: 3.2%

Employer: 4.8%

National Health Insurance Fund (НЗОК) contributions. Employer pays 4.8%, employee pays 3.2% of gross salary. Entitles you to free/subsidised public healthcare.

Unemployment insurance (Осигуряване за безработица)

Employee: 0.4%

Employer: 0.6%

Unemployment fund contributions. Required for entitlement to unemployment benefit.

General sickness and maternity (Общо заболяване и майчинство)

Employee: 0.0%

Employer: 0.7%

Paid entirely by employer. Covers sick leave (from day 4) and maternity benefits.

Work accident and occupational disease (Трудова злополука и профболест)

Employee: 0.0%

Employer: 0.4–1.1% (varies by sector risk)

Paid entirely by employer. Rate depends on the risk classification of the industry.

🛒 VAT Rates

20%

Standard

9% — hotels, accommodation, restaurant services, books, medicines (reduced from 20% for tourism support)

Reduced

The 9% reduced VAT rate for tourism and hotels was introduced temporarily and has been extended multiple times. Zero VAT applies to exports and intra-EU supplies. Bulgaria is expected to adopt the Euro, replacing BGN, in 2025–2026 transition period.

🧾 Sample Payslip Decoder

Gross Salary 2,500 BGN/month

Gross salary (Брутна заплата) + 2,500.00 BGN

Pension insurance — employee 7.9% (ДОО осигурителна вноска) - -197.50 BGN

Supplementary pension — employee 2.2% (ДЗПО) - -55.00 BGN

Health insurance — employee 3.2% (здравно осигуряване) - -80.00 BGN

Unemployment insurance — employee 0.4% - -10.00 BGN

Personal income tax 10% (ДДФЛ — on income after social deductions) - -217.75 BGN

Net Salary (Take-home) 1,939.75 BGN/month

Employer additionally pays: pension 9.9% (247.50 BGN) + supplementary pension 2.8% (70 BGN) + health 4.8% (120 BGN) + unemployment 0.6% (15 BGN) + accident/occupational ~0.5% (12.50 BGN) = ~17.6% additional employer cost on top of gross salary. Total employer cost: ~2,965 BGN/month. Social contributions are calculated on insurable income capped at 3,400 BGN/month in 2026.

🌍 Special Expat Tax Rules

Bulgaria has no special expat tax regime. However, the 10% flat income tax, combined with very low cost of living, makes Bulgaria de facto attractive for high earners and remote workers. Non-residents are taxed only on Bulgarian-source income. Tax residence requires 183+ days in Bulgaria per year or permanent address registration.

📋 Double Tax Treaties

Bulgaria has signed Double Taxation Agreements (DTA/СИДДО) with over 70 countries including all EU member states, UK, USA, Canada, China, Russia, and most major economies. DTAs typically follow OECD model and prevent double taxation on employment income, dividends, royalties, and pensions. Check the Ministry of Finance website (minfin.bg) for the full list and applicable treaties.

National Revenue Agency (Национална агенция за приходите — НАП)

https://www.nra.bg

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