Employment contract is concluded based on the provisions of the Labor Law, whereas the civil contracts are covered by the Law on Obligations and Contracts. The employment contracts are concluded between a worker and an employer for the provision and implementation of a work force.

In the case of a civil contract, the Assignor assigns the performance of a specific task to the Contractor and is expected an exact deadline for implementation to see the results achieved. The Contractor can`t benefit from the right to leave, benefits, protection when terminating joint relationships and others. The Employment contract is subject to registration before the local tax authorities and the civil contract is not.

The Contractor who participates in the civil contract is obliged to notify the Assignor whether he is a self-insured person and whether he receives remuneration on other grounds. On this basis, the Assignor is obliged to withhold and pay social security contributions (excluding contributions for the fund ” Labor Accidents and Occupational Diseases ” and “General (Non-occupational) Disease and Maternity” in the following cases:

  • If the amount due after deduction of the statutory recognized expenses -25% under the Personal Income Tax Act Art. 29 para. 1 item 3 for self-employed – is above the minimum wage for Bulgaria during the respective period
  • When the contractor is insured on other grounds during the same period

For pensioners who have concluded a civil contract, only health insurance is deducted, but there is an option to be insured for the Pension Fund as well. The insurance contributions for the contractors who work without employment shall be paid by the assignor not later than the 10th day of the month following the month for which they are due. If the person is a self-insured person, the assignor has no obligation to withhold and pay social security contributions – they are entirely at the expense of the contractor – recipient of the income.

In comparison to the employment contract, the self-employed person has the right to choose to pay or not “General (Non-occupational) Disease and Maternity”. At the same time they are not entitled to get insured in the Unemployment fund of the State Social insurance and are not allowed to benefit from this allowance if necessary.