New Rules for Setting the Minimum Wage: What Employers Need to Know

Amendments published on 29 September 2026 introduce a new framework for setting Bulgaria’s minimum wage, replacing the previous automatic 50% link to average gross pay with a mechanism that takes several economic and labour-market factors into account.

Amendments to Bulgaria’s Labour Code were published on 29 September 2026, introducing a new procedure for setting the minimum wage for the following year. The change is directly relevant to employer budgeting, pay structures and workforce planning. For companies employing a significant number of people on lower wages, its impact may extend beyond basic salaries to social security costs, paid leave, supplements and the internal balance between different job levels.

As of 30 September 2026, the monthly minimum wage is BGN 1,213, or EUR 620.20, while the minimum hourly rate is BGN 7.31, or EUR 3.74, based on an eight-hour working day and a five-day working week. These amounts apply for 2026 and should not be confused with the amount to be set for 2027. The amended rules change the framework for the next annual determination, while the detailed procedure and methodology are to be set out by a regulation of the Council of Ministers.

What changes under the new mechanism

Under the previous rule, Article 244, paragraph 2 of the Labour Code linked the minimum wage for the following year to 50% of the average gross wage over a defined 12-month period. The amount could not be lower than the minimum wage for the previous year. The amended framework removes that automatic calculation and instead requires several economic and labour-market criteria to be taken into account.

The new framework identifies four criteria: the purchasing power of the minimum wage, taking into account the cost of living; the overall level and distribution of wages; the rate of wage growth; and long-term labour productivity in the country. The law does not prescribe an equal 25% weighting for these criteria. The detailed method for applying them is to be determined by a regulation of the Council of Ministers.

The amended rules also provide that the minimum wage for the following year cannot be lower than the minimum wage for the previous year. The exact calculation methodology, data sources and practical procedure will therefore be important for employers when preparing future payroll budgets.

A stronger role for social dialogue

The amended Labour Code requires the minimum wage for the following year to be determined by 15 August of the current year. The law also provides for cooperation and consultations with the representative organisations of workers and employers. The detailed procedure for these consultations, as well as the method for determining the minimum wage and assessing its adequacy, will be set by a regulation of the Council of Ministers.

For employers, this means that the process will no longer be only a technical calculation based on a published average wage. Representative organisations and businesses operating in low-margin sectors will have an interest in providing timely and reliable information about labour costs, productivity, regional differences and the potential impact on employment. Sector-specific data may be particularly important because a single national indicator cannot fully reflect the differences between manufacturing, retail, transport, services or seasonal activities.

The amendments also allow for higher minimum levels to be negotiated at sector or branch level. This may increase the practical importance of collective agreements. Employers should check whether a collective agreement applies to their business and whether it sets minimum pay levels above the statutory minimum.

Implications for 2027 wage budgets

When preparing the 2027 payroll budget, companies should not rely solely on a mechanical application of the previous formula. A more practical approach is to prepare several scenarios for the future minimum wage and calculate how each would affect total employment costs. This is especially relevant for employers whose workforce includes a large proportion of employees paid close to the statutory minimum.

The analysis should cover more than basic salary. Employers should assess the effect on social security contributions, paid leave, seniority supplements, night work, overtime and other payments linked to employment income. The internal pay structure also needs to be reviewed. If entry-level wages increase, employees in higher job levels may expect adjustments to maintain a reasonable difference between roles, responsibilities and required skills.

Employers should also distinguish between average and median pay. The average can be significantly affected by a small number of highly paid positions, while the median identifies the value at the centre of the distribution. Under the amended Labour Code, a separate adequacy assessment will be carried out once every three years using two reference values: 60% of gross median pay and the cost of living. These reference values form part of the adequacy assessment and should not be treated as an automatic annual formula for determining the minimum wage.

Productivity and differences between businesses

Long-term labour productivity is one of the four criteria included in the amended Labour Code. The law itself does not specify in Article 244 that this criterion must be calculated over a particular ten-year period. The detailed methodology and data sources will be determined through the implementing rules. Employers should therefore consider future changes in the minimum wage alongside their own productivity, prices, customer demand, labour availability and scope for improving operational efficiency.

Practical steps for employers

For 2026, employers should continue to apply the current statutory minimum wage of BGN 1,213 per month, or BGN 7.31 per hour for normal full-time work under the applicable conditions. For 2027 planning, HR and finance teams should monitor the implementing regulation and the procedure that will determine how the four criteria are applied.

Employers can also review employment contracts, internal pay policies, job levels and payments automatically linked to the wage structure. Increasing total income through bonuses or other supplements does not replace the need to verify the basic salary where the law requires a minimum basic amount. An early review allows the company to assess both legal compliance and the wider effects on recruitment, retention and the competitiveness of its pay offer.