Employer Tax Contributions

Tax Type	Rate	Base
Social Security Contributions (Employer Share)	18.92% - 19.62%	Gross income, up to a monthly maximum
Health Insurance Contributions (Employer Share)	4.8%	Gross income, up to a monthly maximum
Personal Income Tax (Withholding)	10%	Gross salary less mandatory social security and health insurance contributions
Corporate Income Tax	10%	Taxable profits

Filing & Compliance

• Monthly tax and social security contributions are due by the 25th day of the following month.
• Employers must submit monthly declarations (Declaration 1 and Declaration 6) electronically by the 25th of the following month.
• Annual income certificates for employees are required by the end of February of the following year.

In Bulgaria, employee tax deductions encompass various areas, including income tax, social security contributions, and other deductions like unemployment insurance.

Income Tax

In Bulgaria, a flat income tax rate of 10% applies to employment income. This rate is consistent for all income levels, meaning that regardless of how much an employee earns, the same percentage is withheld for income tax.

Social Security Contributions

Social security contributions in Bulgaria are shared between the employer and the employee. The total contribution rate is split into several parts, covering pensions, healthcare, unemployment insurance, and other social security benefits. As of 2025, the total rate is typically around 33%, with the employer's portion being the larger share. These contributions are calculated based on the employee's gross salary up to a specified maximum monthly threshold, which is subject to change annually.

Other Deductions

Apart from income tax and social security, several other deductions may apply. These include unemployment insurance contributions, which are a small percentage of the employee's salary and are also split between the employer and employee. Additionally, some collective agreements or individual contracts may stipulate deductions for things like trade union membership or supplementary pension schemes.

Tax Relief for Individuals with Reduced Working Capacity

Employees with a permanently reduced working capacity of 50% or more are eligible for annual tax relief of BGN 7,920. This relief is applicable for the year the disability is established and the year the expert decision on reduced capacity expires.

Tax Relief for Parents

Employees with children under 18 can also benefit from tax relief. The annual tax base reduction is BGN 6,000 for one child, BGN 12,000 for two children, and BGN 18,000 for three or more children. For disabled children, the relief is BGN 12,000 per child. This relief can be claimed even if the employer is a foreign insurer not obligated to withhold taxes, requiring the employee to file an annual tax return.

Tax Administration and Deadlines

As of today, February 5, 2025, employees generally need to file an annual tax return by April 30th of the following year. However, if they solely receive employment income fully taxed through monthly payroll withholding from a single employer who performs annual tax reconciliation by January 31st, filing might not be necessary. Employers must provide employees with an annual income certificate detailing wages, income tax, and national insurance contributions. They must also submit an annual declaration on paid wages and salaries to tax authorities by the end of February of the following year. Monthly social security contributions and withheld income tax are due by the 25th of the following month, accompanied by Declarations 1 (employer contributions) and 6 (employee contributions).