Through 2025 A year in Bulgaria is introduced significant changes in labor and social security legislation, that affect both the workers, So do employers. These changes include an increase in minimum wage and adjustments to the insurance thresholds, which in turn leads to changes in tax liabilities.

1. Increase in minimum wage

From 1 January 2025 r. the minimum wage (MRz) in Bulgaria is rising from 933 BGN. on 1077 BGN, which is a height of 15,4% or 144 BGN.
This is the first time, When MRZ exceeds the threshold of 1000 BGN. The decision is in accordance with changes to the Labor Code, that envisage the MRI to be 50% from the average salary for the country.

The MPA increase aims to improve the standard of living of the lowest workers and reduce income inequalities. At the same time, This increase influences a number of social and economic aspects, including employers' costs, the amount of social benefits and social security contributions.

2.Impact on employers

With the increase of MPA, employers face increased labor costs. This is not only due to the direct increase in employee salaries, who receive a minimum reward, but also of the potential need for other employees' salaries, In order to maintain the internal hierarchy and motivation. Besides, Higher salaries lead to increased social security contributions, which are bound to the amount of reward.

3. Changes to Separating Creations

One of the essential changes, associated with social security contributions through 2025 g., is the increase in maximum insurance income. From 1 April 2025 r. It is increased by 3750 BGN. on 4130 BGN, providing an additional increase in 4430 BGN. from 1 January 2026 r.
Ministry of Finance
That's what it means, that higher income persons will pay insurance contributions to most of their revenue, which will lead to increased personal insurance costs.

4. Social security contributions remain unchanged according to 2024 r.

However, the increase in the maximum insurable income leads to higher absolute amounts of contributions for those with incomes above the previous threshold. This is a step towards ensuring greater fairness in the insurance system and increasing revenues in the state budget.

5. Impact on Tax Liability

The increase in the unemployment benefit and the maximum insurance income has a direct impact on the tax obligations of individuals. Higher incomes lead to increased tax bases, on which income taxes are calculated. However, through 2025 r. no changes in the basic tax rates are foreseen, such as personal income tax and corporate tax.

For employers, increased labor costs may lead to the need to optimize costs and revise business strategies. However, the government does not foresee an increase in social security contributions or the introduction of new taxes, which will ease the additional financial burden on the business.

6. Social and economic consequences

The increase in GDP is aimed at improving the purchasing power of the population and stimulating domestic consumption. Higher incomes can lead to increased demand for goods and services, which in turn stimulates economic growth. At the same time, there is a risk of rising inflation, if increased demand is not accompanied by adequate supply.

For employers, especially for small and medium enterprises, increased labor costs can be a challenge. Some companies may need to revise their budgets, optimize staff or invest in automation and efficiency gains, to offset increased costs.