Taxes and social security and health insurance contributions related to employees

How are social security and health insurance contributions for the employees declared and paid?

Any person working in Bulgaria is subject to social security in the country. In this respect the employer, in the capacity as insurer in accordance with art. 5 of the Social Security Code (SSC), is obliged to withhold and pay social security and health insurance contributions to its employees on a monthly basis. The social security and health insurance contributions are due on the total gross remuneration of each employee within the minimum and maximum thresholds set out by law (depending on the economic activity of the employer). The minimum social security and health insurance income in Bulgaria for 2025 is BGN 1077 ^[*], and the maximum for 2025 is BGN 4130 ^[*]. This means that, the employee may not be insured on less than BGN 1.077 ^[*] monthly gross remuneration (for full-time employment), in the event that the employee receives remuneration exceeding BGN 3000 ^[*], are owed social security and health insurance contributions only up to the maximum income subject to social security and health insurance – BGN 4.130 ^[*].

In addition, the State Social Insurance Budget Act annually approves a table with the minimum insurance incomes, which are applied depending on the economic activity of the employer and the position to which the respective employee is appointed.

Social security and health insurance contributions are allocated by funds and vary depending on the economic activity of the employer. The total social security and health insurance rate is 32.70-33.40% on the gross remuneration, 18.92-19.62% of which are at the expense of the employer and 13.78% are withheld from the monthly remuneration at the expense of the employee.

The monthly contributions include:

• 14,8 % to Pensions Fund;
• 5 % for additional pension insurance;
• 3,5 % to General Disease and Maternity Fund;
• 1 % to Unemployment Fund;
• 0.4-1.1 % to Accident at Work and Occupational Diseases Fund (the percentage varies depending on the economic activity of the company);
• 8 % for health insurance);

Social security contributions are split between the employer and the employee at a ratio, information about which you may find on the NRA website.

How is the annual tax restated by the employer?

By 31 January of the following tax year the employer should calculate the annual tax base for the employment relation income, less the annual amount of the tax relieves and determine the annual tax, when as at 31 December of the tax year he is an employer under the basic employment of the employee. When determining the annual tax base and the annual tax the employer does not include the income from employment relations for personal work from partners, cooperative members and shareholders, owning more than 5% of the capital of the joint-stock company.

In relation to the above the annual tax base is reduced with the annual amount of:

• The tax relieves for people with reduced ability to work;
• The tax relieves for personal contributions for voluntary social security and insurance, when the amounts were withheld by the employer upon the payment of the income from the employment relation;
• The tax relieves for personal contributions for socially secured length of service upon retirement;
• Tax relieves for donations when the amounts were withheld by the employer upon the payment of the income from the employment relation;
• The tax relieves for children;
• The tax relieves for children with disabilities.

If during the tax year the employee has had employment contract to work additionally with another employer, or had a basic employment relation with another employer, the employer includes the income received from the other employer in the calculation of the annual tax base and determines the annual tax, if the employee presents a certificate from the other employer.

When the annual tax calculated is higher than the tax withheld from the employee during the year, the difference is withheld from the person’s income by 31 January of the following year.

When the annual tax calculated is lower than the tax withheld in advance, by the 31 January of the following year the employer refunds the difference to the person. The refunded amount is offset by the employer consistently from the next payments to the republican budget concerning income taxes from employment relations of the person or of other persons.

Obligation of the employer to declare the income paid during the year under employment contracts

According to the provision of Art. 73, para. 6 of the Personal Income Tax Act, all employers are obliged to prepare a reference form for the taxable income paid during the year under employment relations and for the tax and compulsory social security contributions withheld during the year. The reference shall also include the information related to the determination of the annual tax base and the annual tax for the persons to whom as of December 31 of the tax year the employer is such under the main employment relationship.

The reference form is submitted to the NRA by February 28 of the following year only electronically with QES.

How is the personal annual tax return (ATR) filed and what is the obligation to file an ATR?

If employees receive income only from employment relations in the country, for which the total tax due is withheld and paid in advance by the employer, the individuals have no obligation to file an ATR under art. 50 of Personal Income Tax Act (PITA).

The other cases when natural persons have no obligation to file annual tax returns include incomes that were taxed with final tax, for example income from interest on bank accounts in Bulgaria.

If the employees receive another personal income, not related to their employment relations (for example, rent income, civil contracts income, interest, etc.), the individual is obliged to file personally an annual tax return where they should state all additional income received during the respective tax year within the statutory deadlines. The form of the ATR under art. 50 of PITA is available on the website of the NRA.

All local natural persons have an obligation to file an annual tax return, if during the respective year they:

• Have received income subject to taxation on the total annual tax base of income on the annual tax base for incomes from economic activities as sole proprietors;
• Would like to use tax relieves;
• Have paid patent tax;
• Have received non-taxable income from taxi transport activity performed by natural persons – drivers, on behalf of a registered carrier;
• Have granted or received a loan(s) from other individuals or companies at a total amount exceeding BGN 10 000 ^[*] or there are outstanding balances amounting to a total of more than BGN 40 000 ^[*] of loans granted or received during the year or during the preceding five years;
• Have held shares and shareholdings in companies and real estates abroad;
• Have received income from a source abroad subject to taxation with final tax.

What are the filing deadlines and methods?

The Annual Tax Return under Art. 50 of the Personal Income Tax Act shall be submitted in the period from January 10 to April 30 of the year following the year of acquisition of the income. The sole proprietors and natural persons, registered as farmers, who have chosen their taxation to be taxed in an identical way as sole proprietors, submit Annual Tax Return under Art. 50 of the Personal Income Tax Act in the period from March 1 to June 30 of the year following the year of acquisition of income.

Individuals who are obliged to file an ATR may use 5% discount on the tax due as per their tax return, but not exceeding BGN 500, if they meet all of the conditions listed below:

• They have filed their annual tax return electronically by 31 March of the following year;
• At the time of the filing of the return they have no public liabilities subject to enforced collection; and
• The tax due additionally as per the annual tax return is paid by 31 March of the following year.

The annual tax return is filed electronically with a personal identification code (PIC), which may be obtained free of charge in each office of the NRA, or using a qualified electronic signature (QES). The ATR may also be filed by mail – with a letter with a return receipt, in certain post offices with an incoming number, as well as at the NRA office of the permanent address of the individual.

The Annual tax return of self-insured individuals is submitted only electronically.