Bulgaria changed its social security parameters in the middle of the year. The State Social Insurance Budget Act for 2026 was promulgated in State Gazette No. 68 of 28 July 2026, and the State Budget Act followed in issue No. 69 of 31 July. Most of the new figures took effect on 1 August 2026.
This is unusual, and it caught a number of employers out. Until 31 July the 2025 parameters still applied under the extension act, so payroll ran unchanged for seven months. The new Bulgarian social security contributions bite for the first time on August remuneration — reported in Declaration No. 1 and payable by 25 September 2026.
Two groups feel it most: higher earners, and company directors on management contracts. Below is what changed in the Bulgarian social security contributions regime, who pays more, and what to check before the next payroll run.
The two headline figures
Maximum insurable income Bulgaria: EUR 2,300. The monthly ceiling rose from EUR 2,111.64 to EUR 2,300 (Art. 9 of the Budget Act). Income above the ceiling carries no contributions. Anyone earning more than the old cap now has a larger share of their pay inside the contribution base — for the employer and for the individual.
Minimum for self-insured persons: EUR 620.20. The floor for self-insured persons rose from EUR 550.66 to EUR 620.20, aligning it with the national minimum wage. This affects sole traders, owner-managers drawing personal labour income, partners working in their company, freelancers and registered farmers.
The minimum wage itself did not move. It has been EUR 620.20 (BGN 1,213) since 1 January 2026 and is unchanged by the August package.
Minimum insurance thresholds Bulgaria: differentiated again, and on a new classifier
This is the change with the widest practical reach, and the one most likely to be missed.
From 1 August, minimum monthly insurable income is set by Annex No. 1A, differentiated by the employer’s principal economic activity and by the occupational group of each position. Critically, the activity codes are now drawn from the KID-2025 classification, not the KID-2008 codes used in earlier annexes.
For most activities the general scale is:
| Occupational group | Minimum insurable income from 01.08.2026 |
|---|---|
| Managers | EUR 936.00 |
| Professionals | EUR 826.00 |
| Technicians and associate professionals | EUR 771.00 |
| Clerical support staff | EUR 716.00 |
| Skilled workers, craft workers, plant operators | EUR 661.00 |
| Service, sales and security staff; agriculture; unskilled occupations | EUR 620.20 |
Several sectors sit well above that scale for managers — financial and insurance activities at EUR 1,381, coke and refined petroleum at EUR 1,532, meat processing at EUR 1,292, gas distribution at EUR 1,270, wholesale and retail trade at EUR 1,129, hotels and restaurants at EUR 1,100, and air transport at EUR 1,044. No threshold falls below the minimum wage.
The mechanism is a floor, not a pay rise. Where gross pay is below the applicable threshold, contributions are calculated on the threshold. Where gross pay is higher, contributions follow actual remuneration, capped at EUR 2,300.
Two consequences employers underestimate
First, job titles do not determine the threshold — actual duties do. An “administrator” in an online shop may fall into technicians (EUR 771), clerical support (EUR 716) or sales (EUR 620.20) depending on what the person actually does. The job description carries the classification, and it is the document a revenue inspector will ask to see.
Second, staff on the minimum wage are largely unaffected. A full-time shop assistant was already insured on at least EUR 620.20, because that is the minimum wage. The increases land on supervisors, technical staff, professionals and managers — the positions employers tend not to re-check.
Social security for directors in Bulgaria: the largest single increase
Managers, procurators and members of management and supervisory boards are insured under Art. 4(1)(7) of the Social Insurance Code. Under Art. 6(3), contributions are due on gross remuneration actually received or accrued but unpaid — and not less than the applicable minimum threshold.
Here is the point that matters. For a management contract, the national minimum wage does not operate as a practical floor the way it does under an employment contract. The comparison runs against the minimum insurance threshold for managers in the company’s sector. That is why the August increase is sharper for directors than for anyone else on the payroll.
A manager of a wholesale or retail company now has a floor of EUR 1,129. In construction it is EUR 936; in financial services, EUR 1,381. If the management contract provides for EUR 800 a month, contributions from August must be calculated on the sector threshold regardless.
Three structural points follow, and they are the ones we are asked about most:
The threshold tracks the company’s activity, not the director’s profession. A lawyer sitting as manager of a hotel company is measured against the hospitality threshold for managers, not a professional-services figure.
A management contract is not the only route. An owner-manager may instead be insured as a self-insured person for personal labour under Art. 4(3)(2) of the Code, with a floor of EUR 620.20. The choice has real consequences for cost, for benefit entitlement and for how the remuneration is taxed — it should be made deliberately, and documented, not left to whatever the accountant set up at incorporation.
Multiple insurance bases are capped, not stacked. A person insured on more than one basis — employment plus a directorship, or a directorship in two companies — has an aggregate monthly base limited to EUR 2,300. Getting the ordering and the aggregation wrong produces either overpayment or an assessment.
For groups with non-resident directors, none of this is reached before the coordination question is answered. Where a director is subject to another Member State’s system under Regulation (EC) No. 883/2004 and holds an A1 certificate, Bulgarian contributions are not due on that engagement. Where no certificate is in place, the Bulgarian company is exposed. We see this gap regularly in Bulgarian subsidiaries of German and Dutch groups, and it is usually cheaper to fix prospectively than to unwind.
Occupational accident fund contribution: check your new rate
A new Annex No. 2A sets the occupational accident and disease fund contribution by KID-2025 activity. The overall band is unchanged at 0.4%–1.1%, and most sectors keep their rate, but the redistribution moved several.
Rates rose for food manufacturing (0.7% to 0.9%), coke and refined petroleum (0.9% to 1.1%), sports and recreation (0.5% to 0.7%) and administrative office activities (0.4% to 0.5%). Architectural and engineering activities fell from 0.7% to 0.5%.
The rate follows the employer’s principal activity, not the individual employee’s profession, and the contribution is borne entirely by the employer. An engineer employed by a construction company does not move to the engineering rate.
What did not change
Not every element of the Bulgarian social security contributions regime moved in August. Contribution rates for the private sector are unchanged, as is the split between employer and employee. The health insurance contribution remains 8%, and the flat personal income tax rate remains 10%.
No contributions are due to the Guaranteed Claims Fund in 2026, with the maximum guaranteed claim set at EUR 1,550.50.
Two ancillary figures did move with the new minimum: the employer’s health contribution for days of temporary incapacity is now EUR 29.77 per month, and the health contribution for unpaid leave and for unemployed persons is EUR 24.81.
Civil servants now pay a personal share
For the first time, civil servants, judges, prosecutors, investigators and military personnel began paying part of their own contributions from 1 August 2026. Their contributions were previously borne entirely by the state budget.
Until the end of 2026 the individual carries roughly a fifth of the burden — for the pension fund, 11.8% employer to 3% employee for those born after 1959. From 1 January 2027 the standard 60:40 split applies. Base salaries were increased so that net pay at 31 July 2026 is preserved.
This does not affect private employers, but it is worth knowing if you advise or second staff into the public sector.
Two related changes worth diarising
Monthly child tax relief. Employers can now apply the child tax relief monthly in advance, reducing the monthly tax base by EUR 255.65 for one child, EUR 511.29 for two, and EUR 766.94 for three or more. The employee must file a one-off written declaration confirming eligibility and that the other parent will not claim it. Employers need a template and a payroll setting.
Length of service. Article 355 of the Labour Code is amended so that service is calculated in hours, days, months and years, with part-time service counted pro rata. The provisions enter into force on 1 September 2026, but the existing method applies until 31 December 2026 — so the practical shift is 1 January 2027. Employers with part-time staff should model the effect on length-of-service pay now.
A short compliance checklist
- Confirm your KID-2025 code. The annexes changed classifier. A code carried over from KID-2008 will point you to the wrong threshold and possibly the wrong accident fund rate.
- Classify every position by actual duties. Map each role to an occupational group and check the job description supports it.
- Review management contracts separately. Directors are where the largest increases sit, and they are usually outside the routine payroll review.
- Check A1 coverage for non-resident directors and seconded staff.
- Re-check anyone earning over EUR 2,111.64. The higher ceiling increases both employer cost and employee deductions.
- Verify the accident fund rate against Annex No. 2A for your activity.
- Document the decisions. A dated internal note recording activity code, classification and thresholds is the cheapest evidence you can hold.
Frequently asked questions
When do the new Bulgarian social security contributions first apply? To August 2026 remuneration — reported in Declaration No. 1 and payable by 25 September 2026. The 2025 parameters applied from January to 31 July 2026.
What is the maximum insurable income in Bulgaria in 2026? EUR 2,111.64 until 31 July 2026, and EUR 2,300 per month from 1 August 2026.
Did the contribution rates increase? Not for the private sector. The rates and the employer/employee split are unchanged. What changed are the bases on which they are calculated, plus the accident fund rate in certain sectors.
Does the increase mean I must raise salaries? No. The minimum insurable income sets the base for contributions, not the wage. But where gross pay sits below the new threshold, the employer pays contributions on the higher figure.
How are directors on management contracts affected? More than employees, in most cases. The manager threshold in the company’s sector applies, and the minimum wage does not serve as the comparison point as it effectively does under employment contracts.
Does a foreign director of a Bulgarian company owe Bulgarian contributions? Not where another Member State’s legislation applies under Regulation (EC) No. 883/2004 and an A1 certificate is held. Without one, the Bulgarian company is exposed.
How we can help
Slavchev & Vasilev advises Bulgarian companies and the local subsidiaries of foreign groups on employment and social security compliance: classification of positions, review of management contracts and director remuneration structures, cross-border coordination and A1 certificates, and correspondence with the National Revenue Agency.
Contact us for a review of your position ahead of the next payroll cycle.
Attorney Vasilev has been part of the law firm’s team since its establishment when he was a law student at Sofia University “St. Kliment Ohridski.” From the very beginning, he demonstrated exceptional commitment and ability to successfully handle even the most complex legal cases.
