Personal income tax (PIT) and social security (SS) compliance: As of January 1st 2008 the PIT was reduced to a flat rate of 10%. It is levied on the gross amount of the salary decreased with the statutory social security contributions paid for the account of the employee.

The aggregate rate of SS contributions for 2008 is 33.4%. SS contributions are levied on the gross monthly salary of the employee, but up to a maximum monthly social security capped base of BGN 2.000 (i.e. any excess of the monthly salary above BGN 2.000 would not be included in the base for calculation of the SS contributions).

The SS burden in Bulgaria is shared between the employer and the employee. For 2008 the aggregate SS rate is split between the employer and the employee in a ratio of 60:40 % for the employer and the employee respectively (i.e. the employer pays 60% of the aggregate SS contribution for his own account, and the employee pays the rest 40% of the contribution out of his gross salary). Local employers are also obliged to withhold and pay to the state budget the PIT and SS contributions (both the employer’s and the employee’s portion) on a monthly basis.