US company hiring in Bulgaria: contracts, euro costs and three ways in

Most US companies come to Bulgaria for experienced software and support people at a salary level that leaves room in the budget. Official statistics for the second quarter of 2026 show why: gross monthly pay averaged €1,444 across the economy and €3,079 in information and telecommunications, the country’s top-paying sector (National Statistical Institute). Our standard example, a Sofia developer paid €40,000 a year, lands just over that sector figure, which makes it a fair benchmark when you price a role.

The tax side is simple to explain to a finance team in Austin or Boston. Employment income is taxed at a flat 10%, for residents and non-residents alike, with no brackets to model. The employer’s contributions are charged only up to a fixed monthly amount of pay, and once a salary is past that point each extra euro of salary costs the company almost exactly one euro.

Currency matters too. Since 1 January 2026 the lev has been replaced by the euro, converted at 1.95583 leva per euro, and contracts, payslips and contributions are all in euro now. If your company already pays people elsewhere in the eurozone, a Sofia hire adds no new currency to your treasury.

None of this replaces a proper look at the role. Salary expectations for senior engineers move with demand, and the averages above are averages. Still, they explain why a growing number of US founders start a search here before anywhere else in the region.

The biggest shift for a US manager is that there is no at-will employment. To end an open-ended contract with notice, the employer must point to one of the reasons Art. 328 of the Labour Code (Кодекс на труда) lists, for example staff cuts, less work to do or a person who turns out to be unsuited to the post; dismissal without notice is reserved for disciplinary cases. A manager who simply wants a change of person has no lever for that. We compare the two systems in detail in our guide to at-will versus Bulgarian dismissal rules.

Paperwork comes before the first day, not after it. The contract must be in writing (Art. 62(1)) and contain the minimum terms set out in Art. 66: parties, place of work, job title, start date, duration, leave, notice, pay and working time. The National Revenue Agency (NRA, НАП) then has to receive the contract details for its employment register, at the latest 3 days after signature. Only once the new hire holds both the signed contract and the NRA-certified entry may they begin.

Benefits that a US employer would choose are set by statute here:

• Twenty working days of paid leave a year as a floor, usable after 4 months by someone in their very first job.
• Public holidays under Art. 154, including the Orthodox Easter weekend (10 to 13 April in 2026) and the Christmas days.
• A 40-hour, five-day standard week; the annual overtime limit is 150 hours, and a weekday overtime hour costs at least one and a half times the normal rate.
• State health insurance funded through payroll contributions, so no employer health plan is needed for basic cover.

The contract must state salary in euro, and Bulgarian practice expresses it per month before deductions. Annual salaries, the normal US habit, are best converted into twelve monthly amounts before the offer goes out, so the candidate sees the number they will recognise on a payslip.

A US company has three realistic ways to engage someone in Bulgaria, and only two of them create real employment. The first is a civil contract (граждански договор) with an individual. It looks quick, but Art. 1(2) of the Labour Code allows the provision of labour to be organised in one form only, as employment. Fixed hours, a single client and day-to-day direction from your managers are exactly the signs an inspector looks for, and the Labour Inspectorate can then use its Art. 405a power to rule that the person was an employee all along and date that from the start. Back contributions, leave pay and dismissal protection then follow.

The second route is forming your own single-member limited company, an EOOD (ЕООД). The law asks for only €1 of share capital; the filing itself is made with the Registry Agency, which keeps the Commercial Register. That filing is only the start. A bank account, double-entry bookkeeping, employer registration and electronic access to NRA services all need to exist before a first salary run. For a team you expect to grow to dozens of people, that set-up is often worth it.

Option three is to let Employer of Record Bulgaria hold the contract. The people you pick sign their Bulgarian labour contracts with us and are paid through our payroll, while you decide what they work on day to day. In this set-up we are the legal employer of each person you select, and that puts the register entry, contributions and payslips with us instead of with a company you would first have to create.

Many US firms use the third route for the first one to five hires and revisit the question once headcount and plans are clearer. For a fuller list of who does what, read how the EOR role in Bulgaria divides the duties.

Pay a Sofia software engineer €40,000 gross for 2026 and the company’s outlay is roughly €44,972.46. That is twelve payments of €3,333.33 plus employer contributions of 18.92%, based on an assumed 0.4% work-accident rate for software work and a person born after 1959.

The on-cost is only about 12.4% because contributions stop at the monthly insurable ceiling. This year that cap moved mid-stream: it stood at €2,111.64 for the first seven months and became €2,300 on 1 August, once the delayed social security budget was passed. A salary of €3,333.33 is above both, so contributions are charged on the ceiling, not on the full pay. The resulting monthly bill to the employer is €3,732.86 up to July, then €3,768.49.

Bonuses follow the same logic. A year-end bonus is taxed at 10% and insured like ordinary pay, but contributions are still capped per month; if the regular salary for that month has already gone past €2,300, the bonus brings no further employer contributions with it. For US teams used to paying a sign-on or retention bonus, that makes the extra euro cost easy to forecast: the bonus itself, and very little on top.

For the person you hire, 13.78% in contributions and the 10% tax come off, and about €32,740.57 reaches their account over the year. That number helps when a candidate compares your offer with a Bulgarian employer’s.

On top of that, the EOR service runs from €599 per employee per month. Converted at 1.1225 dollars to the euro, the ECB’s published figure for 2 October 2026, that comes to about $672. Over a year the fee adds €7,188, which takes the example to about €52,160 all in. Because the dollar equivalent drifts as rates change, many US finance teams budget in euro and convert once a quarter. The full breakdown is on our pricing page.

The order of events is fixed by law, and the first working day cannot come before the register entry. A typical sequence for a US client looks like this:

• You agree the role, the gross monthly salary in euro, the start date and any probation period (a ceiling of 6 months, cut to 1 month for contracts of under a year).
• We issue the Bulgarian labour contract with the Art. 66 terms and the candidate signs it.
• The contract goes onto the NRA register inside the 3-day window and ahead of the start date, and the employee gets the certified copy.
• The employee starts work; you manage tasks, priorities and reviews as you would for anyone on your team.
• We run monthly payroll, withhold the 10% tax and the employee contributions, and send contributions and tax to the NRA by the 25th day of the next month.

January brings one more task. For a person whose only employer on 31 December was us, the year’s tax is reconciled by the employer before the end of January, which normally spares them a tax return. A single rate with no allowances means that, for most employees, twelve months of withholding already equal the year’s bill.

Probation works in both directions. While it runs, Art. 71 lets whichever side the clause protects walk away with no notice at all. US managers often expect a probation clause to protect only the company; in Bulgaria the contract can name the employee, the employer or both.

Employers based in Britain face a slightly different set of points, which our article for UK businesses works through.

The cost line, payroll taxes against the Bulgarian funds, gets a fuller comparison of its own.

Most questions in the first weeks are about rules that work differently from US practice. These come up most often.

Code and IP. Under the Copyright Act (Art. 14), the rights in software and databases that staff build on the job go to the employer, unless the two sides have agreed something else. For a software hire that default is reassuring, though most contracts still spell it out.

Non-competes. Bulgarian courts will not enforce a promise not to join a competitor after leaving. Ever since a 2010 line of rulings, the Supreme Court of Cassation has read such clauses as an unlawful limit on the constitutional right to choose one’s work. Secrecy obligations are a different matter and may outlast the contract, so build your protection on those.

Sick days. For each illness, days one and two are on the employer, at 70% of the person’s average daily gross. After that the National Social Security Institute (NSSI, НОИ) takes over the payment. There is no US-style bank of sick days to manage.

Parental leave. A mother can be away for 410 days per child, and her pay during that time, 90% of her average insurable earnings, comes from the NSSI rather than from you. Paternity leave is 15 days, counted from the baby’s discharge from hospital,, plus 2 further months reserved for the father until the child’s eighth birthday.

Evenings. Art. 154b, in force since 2024, means a message sent during someone’s daily or weekly rest can wait for a reply, except where a contract term or collective agreement provides for contact. With a time difference to the US, agree overlap hours in the contract rather than relying on late calls.

Still deciding between providers? The questions for picking an EOR in Bulgaria we suggest cover payroll, contract drafting and what happens when someone has to leave.

Q01Is a Bulgarian company required before a US firm can make its first hire?+

A.No. With an employer of record, the contract is signed and payroll is run by the EOR, and your company directs the work. If you would rather hold the employment yourself, you can form your own EOOD through the Commercial Register first.

Q02How is a Bulgarian employee taxed?+

A.The employee’s 13.78% contributions (capped at the monthly ceiling) are taken off gross pay first, and a flat 10% tax applies to the rest. Both are deducted by the employer each month and paid over to the National Revenue Agency.

Q03Which currency do we pay in?+

A.Euro, which replaced the lev at the start of 2026; the contract has to state the salary in euro. You can fund payroll from a dollar account, but the salary itself is fixed in euro.

Q04What notice does a Bulgarian employee get?+

A.Thirty days on an open-ended contract, or longer by agreement to a maximum of 3 months, and it binds employer and employee equally. The employer also needs one of the grounds listed in the Labour Code.

Q05How much is the EOR fee per person?+

A.On top of salary and employer contributions comes the EOR charge, which has a floor of €599 per employee per month. For a €40,000 Sofia developer, salary and contributions come to about €44,972 a year in 2026.