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Summary
Bulgaria uses one of the lowest and simplest tax systems in the EU: a 10% flat income tax combined with social and health insurance contributions. The employee’s share of social contributions totals approximately 14.38%, and these are deducted before calculating income tax. All contributions are capped at a maximum insurable income of 3,750 BGN/month (45,000 BGN/year for 2025, rising from the previous 3,400 cap). Bulgaria has no personal allowance or tax-free threshold.
How it works
Your take-home pay is reduced by:
- Social security contributions (DOO + DZPO + Unemployment) - pension, sickness, and unemployment insurance
- Health insurance (ZO) - mandatory health contribution
- Income tax - 10% flat on taxable income (gross minus all social and health contributions)
Social and health contributions are deducted first, and income tax is calculated on the reduced amount.
Income Tax Rate (2025)
| Income | Tax rate |
|---|---|
| All taxable income | 10% (flat) |
Taxable income = Gross salary - employee social contributions - health contribution.
There is no personal allowance in Bulgaria. The 10% applies from the first lev of taxable income.
Social Security Contributions
Employee contributions (the employee bears a portion of the total; employer pays the rest):
| Contribution | Employee rate | Cap (monthly) |
|---|---|---|
| DOO pension (fond Pensii) | 8.78% | 3,750 BGN |
| DZPO supplementary pension | 1.40% | 3,750 BGN |
| ZO health (Zdravno osiguryavane) | 3.20% | 3,750 BGN |
| Unemployment (Bezrabotitsa) | 1.00% | 3,750 BGN |
| Total employee | 14.38% | 3,750 BGN/month |
All contributions are capped at the maximum insurable income of 3,750 BGN/month (45,000 BGN/year). Income above this ceiling is not subject to social or health contributions.
Note on DOO rate: The total pension rate is 19.8% for workers born before 1960, split 60:40 between employer and employee. For workers born after 1959, 5% is redirected to the universal supplementary pension fund (DZPO), with the DOO employee share at 8.78% and DZPO at 2.2% (employee share 1.40%).
Minimum insurable income
Bulgaria also has minimum insurable income thresholds by economic sector and job category. Employers must insure employees at least at these minimums, regardless of actual salary.
The formula
Where
Worked example
30,000 BGN gross annual salary (2,500 BGN/month)
DOO pension (8.78%)
= 2,634 BGN
DZPO supplementary pension (1.40%)
= 420 BGN
Unemployment (1.00%)
= 300 BGN
ZO health insurance (3.20%)
= 960 BGN
Total social and health contributions (14.38%)
= 4,314 BGN
Taxable income
= 25,686 BGN
Income tax (10%)
= 2,569 BGN
Total deductions
= 6,883 BGN
Result
Take-home pay = 30,000 - 6,883 = 23,117 BGN/year (1,926 BGN/month)
Assumptions & limitations
- 2025 rates only - uses current tax year rates and the 3,750 BGN/month insurance cap
- Standard employment contract - does not model civil contracts or self-employment
- Born after 1959 - uses the contribution split that includes DZPO universal pension fund. Workers born before 1960 have different DOO rates
- No personal allowance - Bulgaria has no tax-free threshold; the full 10% applies from the first lev
- Insurance cap - all contributions stop at 3,750 BGN/month (45,000 BGN/year). High earners pay less as a percentage
- No additional deductions - does not model voluntary pension contributions, disability deductions, or donations
- Minimum insurable income not modelled - employees must be insured at sector-specific minimums regardless of actual pay
- No family benefits - child-related tax benefits and deductions are not included