Compensation to employers in Bulgaria

On 30.03.2020 the Bulgarian Government adopted a Decree laying down the conditions and procedure for the payment of compensation to employers in order to preserve the employment in a state of emergency due to corona-virus situation.

The amount of the compensation is 60 percent of the insurance income for the month of January 2020 for each person to whom the regime of termination of employment or part-time work is applied. For the part-time work, the compensation shall be paid in proportion to the time worked, but not more than four hours.

Employers will be able to receive the funds provided they retain the employees for a period not less than the period for which they receive compensation. During this period, they will have to pay the full amount of the persons’ wages for the respective month and the tax and social insurances due.

Compensation will be paid when work is suspended for the whole or part of the period of emergency, but for no more than 3 months.

Employers may apply for compensation, which:

  •  are local physical or legal persons, as well as foreign legal entities, operating in Bulgaria;
  • have no liabilities to the state or municipality for taxes and compulsory social security contributions (within the meaning of Art. 162, para. 2, item 1 of Tax and Social Insurance Procedure Code);
  • are not in bankruptcy or liquidation proceedings;
  • will keep the employment of compensated persons for a period not less than the period for which the compensation was paid;
  • will not terminate employment contracts on the grounds: a) closure of part of the enterprise or redundancy; b) reducing workload; c) stopping work for more than 15 working days, for the period the compensation is paid;
  • do not have a decree or judgment established by an enforced law of Labor Cod within the last 6 months.

Compensation may be paid to an employer who, due to the state of emergency:

  • by his order issued on the basis of an order of a state body, terminated the work of the enterprise, part of the enterprise or individual employees. In this case the business activity of the entity must be within the following business activities: accommodations, restaurants & bars, cultural, sports and entertainment activities, retail, logistic & transport.
  • Employers from all sectors of the Classification of Economic Activities (NACE.BG-2008), with the exception of Sectors: Agriculture, forestry and fisheries, Financial and insurance activities, Government, Education, Human health and social work, Household activities as employers, Undifferentiated household activities for the production of goods and services for own consumption, Activities of extraterritorial organizations and services, may apply for compensation, which also meet the following conditions:
    • by its order issued on the grounds of art. 120c, para. 1 of the Labor Code, has suspended the work of the enterprise, part of the enterprise or individual employees in the event that OR
    • by its order issued on the grounds of art. 138a, para. 2 of the Labor Code, has established part-time work in the enterprise or in its unit;
    • declare a decrease in sales revenue as follows:

             – not less than 20% in the month preceding the month of application for payment of compensation, compared to the same month of the previous calendar year – for entities, established before March 1, 2019;
             – not less than 20% in the month preceding the month of application for payment of compensation, compared to the average income for the month of January and February 2020 – for entities established after 1 March 2019  

The employer submits, including electronically, to the Labor Office Directorate, related to legal address of the employer, application for payment of compensation in accordance with a form approved by the Executive Director of the Employment Agency.

Within 7 working days the Employment Agency will announce the approved applications.

This material and information are for general information purposes only. Making any business, legal or other decisions needs additional professional advice. If you have any additional questions, please contact us.

Recent Posts

2 days ago


Public holidays in Bulgaria for 2023 are: New Year – January 1 (Sunday), non-working day is January 2 (Monday) Liberation of Bulgaria – March 3…

Continue reading
2 days ago


From the beginning of 2024, payment service providers, such as banks, money transfer companies, some online trading platforms, etc., will be obliged to report to…

Continue reading
2 days ago


National Labor Inspectorate reminds at its web portal that the statute of limitations of employee’s paid leaves from 2020 expire until the end of 2022.…

Continue reading