Employment Records, Minimum Wage, Tax Changes and Legislative Proposals for 2027

In October 2026, several important legislative developments in Bulgaria are in focus for businesses and employers, including new rules for calculating length of employment service, changes to the mechanism for determining the minimum wage, updated statutory amounts for free food and beverages, and new requirements related to tax reporting and annual financial statements.

During the October edition of Sb Insider, our specialized webinar for clients and partners, the experts at Sb Accounting & Consulting presented the key legislative developments, upcoming changes and important deadlines that businesses should monitor.

In this monthly overview, we summarize the most significant updates, clearly distinguishing between adopted legislative amendments and proposals that are still under discussion.

1. Adopted Legislative Changes

Amendments to the Labour Code: New Rules for Calculating Length of Employment Service

One of the most significant legislative changes for employers and HR and Payroll teams concerns the calculation of length of employment service.

The amendments to the Labour Code were adopted through the 2026 State Budget Act and entered into force on 1 September 2026, with a transitional period provided until the end of the year.

What is changing in the calculation of employment service?

The main change is that employment service may now also be calculated in hours. For part-time employees, it will be determined proportionally to the statutory working hours.

This represents a significant departure from the previous rules, under which working at least half of the statutory working hours generally counted as a full day of employment service.

The rules for calculating employment service in months are also changing. Under the new provisions, all working days in the relevant month must be recognized for that month to count as a full month of employment service, replacing the previous requirement of at least 21 days in a five-day working week.

Specific rules have also been introduced for employees working under more than one employment relationship. Employment service will be calculated separately for each relationship, but when exercising rights under the Labour Code, the total recognized period cannot exceed the corresponding calendar time.

When will the new rules apply?

Although the amendments entered into force on 1 September 2026, the legislation provides that employment service and the related entitlements will continue to be determined under the previous rules until 31 December 2026.

Therefore, unless further changes are introduced, the new calculation mechanism is expected to apply in practice from 1 January 2027.

It is important to note that certain provisions have been challenged before the Constitutional Court. As of the October Sb Insider webinar, the constitutional proceedings were still pending, with no final ruling on the merits affecting the applicable rules.

What does this mean for employers?

The changes are particularly relevant for part-time employees but affect all employers, as they modify the general mechanism for calculating employment service and the related employment rights.

HR and Payroll teams should therefore closely monitor further legislative and judicial developments and prepare for the potential implementation of the new mechanism at the beginning of 2027.

Minimum Wage: Changes to the Criteria and Calculation Mechanism

As of 3 October 2026, amendments to the Labour Code concerning the mechanism for determining the minimum wage have entered into force.

It is important to clarify that these amendments do not automatically increase the minimum wage as of that date. Instead, they change the methodology used to determine its amount in the future.

The previous mechanism is being replaced by a broader model that takes into account a combination of economic and social indicators.

A key development is the introduction of the cost of living as an official criterion in determining the minimum wage.

The procedure for calculating and publishing cost-of-living data is yet to be established.

What does this mean for businesses?

Employers and HR and Payroll teams should monitor the implementation of the new mechanism, as future minimum wage adjustments will be based on a wider range of indicators.

Free Food and Beverages: Updated Statutory Amounts

As of 1 September 2026, amendments to Ordinance No. 11 have introduced new statutory amounts for free food and beverages provided to employees working under certain conditions.

Under the amendments:

  • The minimum value of free food and related supplements increases from BGN 2 to EUR 2.
  • The maximum value of tonic and refreshing beverages increases from BGN 1 to EUR 1 per shift.

These changes represent more than a technical currency conversion. They constitute an actual increase in the statutory amounts.

The categories of employees entitled to this benefit remain unchanged.

What should employers do?

Companies providing free food and beverages under Ordinance No. 11 should review their internal policies, supplier agreements, budgets and relevant HR and Payroll system settings to ensure that the updated amounts are correctly reflected.

Personal Income Tax Act: Expanded Reporting of Dividend Income

Another adopted legislative amendment concerns the Bulgarian Personal Income Tax Act and the automatic exchange of tax information.

The scope of information reported under Article 73a of the Personal Income Tax Act has been expanded to include certain dividend income paid or accrued to individuals who are tax residents of another European Union Member State.

A particularly important aspect of this amendment is its retroactive application.

The new provisions apply from 1 January 2026, although the amendment was promulgated in September.

What does this mean for companies?

When preparing their annual tax reporting, companies should also review relevant dividend income accrued or paid from the beginning of 2026 to determine whether it falls within the scope of the new reporting requirements.

Annual Financial Statements: New Procedure for Processing Applications

An amendment has also been adopted concerning the processing of applications for the publication of annual financial statements in the Bulgarian Commercial Register.

Under the new procedure, applications for the publication of annual financial statements will be processed separately from other applications.

The purpose is to prevent accumulated delays in processing annual financial statements from obstructing other registrations or changes in companies’ Commercial Register records.

The amendment has already entered into force, with a one-month period provided for the Registry Agency to implement the necessary technical arrangements.

2. Upcoming Legislative Changes Under Review

In addition to the adopted amendments, several proposals are currently being discussed that may affect employers and individuals.

Important: The measures outlined below are legislative proposals and should not be treated as final or enacted legislation.

Child Tax Relief: Proposed Increases

Significant increases in child tax relief amounts are currently under discussion.

The proposals include the following amounts:

Type of Tax Relief Proposed Amount
For one child EUR 5,000
For two children EUR 8,000
For three or more children EUR 11,000
For a child with a disability EUR 10,000

A new tax relief measure is also being proposed for documented expenses related to children’s development, including education, sports and certain healthcare expenses.

At this stage, these proposals should not be considered final legislation.

The topic will be discussed in greater detail during an upcoming Sb Insider webinar dedicated to tax relief.

Meal Vouchers: Proposed Increase in the Monthly Limit and Changes to Taxation

Another proposal we continue to monitor concerns the tax treatment of meal vouchers.

The maximum monthly value of meal vouchers is proposed to increase from EUR 102.26 to EUR 200, alongside the introduction of a 7% final withholding tax.

According to the public clarifications discussed during the October webinar, the intention is to preserve the tax-exempt status of the existing amount, with any potential taxation applying only to the portion exceeding that threshold.

Maintaining the exemption from social security contributions is also under discussion.

What should employers keep in mind?

These proposals may affect employee benefits policies and personnel cost planning. However, they should not yet be applied as effective legislation.

Companies should monitor the final legislative provisions before introducing changes to their meal voucher policies.

3. Other Important Developments for Businesses

Bulgaria’s 2027 State Budget: What Do We Know as of October 2026?

Preparations for Bulgaria’s 2027 State Budget remain an important topic for businesses.

As of the October webinar, the budget preparation procedure for 2027 had already been approved. However, there was no confirmed submission of a draft 2027 State Budget Act to the National Assembly.

Consequently, specific budget parameters cannot yet be treated as final or officially adopted.

Euro Adoption: Deadlines for Share Capital and Corporate Documents

An important topic previously covered during Sb Insider is the alignment of corporate documents with Bulgaria’s adoption of the euro.

As a reminder, the deadline for updating company agreements, articles of association, incorporation documents and other applicable documents was extended from 12 to 36 months from the date of the introduction of the euro, i.e. until the end of 2028.

An additional simplification adopted in October provides that updated corporate documents must be submitted together with a subsequent application to the Commercial Register only where their submission is required under the Bulgarian Commerce Act.

Businesses therefore benefit from an extended compliance period and a simplified procedure for submitting the relevant documents.

For more information, read our previous overview: Legislative Updates for Businesses – September 2026.

4. Key Dates and Deadlines for Businesses

Below is a summary of the most important dates and deadlines covered in the October legislative overview.

Date / Deadline Legislative Development
1 January 2026 Effective date for the expanded reporting scope covering certain dividend income under Article 73a of the Personal Income Tax Act
1 September 2026 Amendments to the calculation of employment service enter into force, subject to a transitional period
1 September 2026 Updated statutory amounts for free food and beverages under Ordinance No. 11 take effect
3 October 2026 New mechanism for determining the minimum wage enters into force
31 December 2026 End of the transitional period during which the previous employment service calculation rules continue to apply
1 January 2027 Expected start of the practical application of the new employment service calculation mechanism, unless further changes occur
By the end of 2028 Deadline for aligning relevant corporate documents with the conversion of company capital into euro

The proposals concerning child tax relief and meal vouchers are not listed as effective legislative changes because they were still under discussion as of the October webinar.

5. What Should Employers and Businesses Keep in Mind?

The legislative developments discussed in October 2026 highlight several important areas for businesses, particularly employment legislation, workforce management, tax reporting and corporate administration.

For employers, a key priority is preparing for the new method of calculating employment service, which is expected to apply in practice from 1 January 2027, provided that no subsequent legislative or judicial developments change the applicable rules.

Companies providing free food and beverages under Ordinance No. 11 should verify that the updated statutory amounts have been reflected in their relevant internal policies and procedures.

From an accounting and tax perspective, particular attention should be paid to the new reporting requirements for certain dividend income and the revised procedure for processing applications for the publication of annual financial statements.

Meanwhile, the proposals concerning child tax relief, meal vouchers and Bulgaria’s 2027 State Budget remain developments to monitor until the final legislative provisions are adopted.

Sb Accounting & Consulting continues to monitor legislative developments and their practical implications for businesses, employers and employees.

Follow our monthly “Legislative Updates for Businesses” series for key developments, deadlines and practical guidance shared during our specialized Sb Insider webinars for clients and partners.