Labour Costs Are Rising Faster Than Workforce Plans: How Employers Should Budget for 2027

Official data for the second quarter of 2026 show why next year’s workforce budget should distinguish between gross pay and the full cost of employment.

Planning the 2027 workforce budget will require more than applying a standard increase to this year’s payroll. In the second quarter of 2026, Bulgaria’s total hourly labour cost increased by 9.9% compared with the same quarter of 2025. Wages and salaries rose by 9.9%, while other labour costs increased by 10.0%. The National Statistical Institute identifies these figures as preliminary, but they provide a useful picture of the environment in which employers are preparing next year’s plans.

The figures do not mean that every company should budget for exactly a 9.9% increase. They show that the cost of employment is changing materially and that workforce budgets need to reflect the company’s sector, location, staffing model and business outlook. The relevant question is not only what salary an employee will receive, but what the full cost of employing that person will be and how it will affect operating performance.

Gross salary is not the full cost of employment

The average gross monthly wage of employees under employment contracts was EUR 1,444 in the second quarter of 2026. This was an increase of 2.6% compared with the previous quarter and 9.8% compared with the second quarter of 2025. The indicator is useful for following the broad market trend, but it is not a direct measure of any individual employer’s costs. It combines occupations, skill levels, sectors and regions with very different pay structures.

Labour-cost data are measured hourly and include wages, employer social-security contributions, taxes and other labour costs. An internal budget should also account for bonuses, benefits, overtime, shift work, replacement cover, recruitment, training and the periods during which a position remains vacant. This broader calculation gives a more realistic view of the cost of a role.

Sector differences make a single budget increase unreliable

Total labour costs increased by 12.2% year on year in industry and by 11.5% in services in the second quarter of 2026. The largest annual increases were recorded in mining and quarrying, at 18.7%; other service activities, at 17.5%; and electricity, gas, steam and air-conditioning supply, at 14.3%. Employers should therefore compare their costs not only with the national average, but also with the relevant sector and local labour market.

The differences are also visible in average gross monthly wages. In June 2026, the average was EUR 2,004 in energy, EUR 1,883 in mining and quarrying, EUR 1,243 in manufacturing and EUR 1,184 in construction. These figures are not ready-made salary benchmarks for a particular job, but they can help employers test whether planned pay levels are realistic in the market.

For businesses facing faster labour-cost growth, the impact extends to customer pricing, commercial offers and margins. Budget preparation should include a review of which contracts can absorb higher costs, where automation is feasible and which roles are critical to delivering orders.

A tight labour market limits rapid expansion

Unemployment stood at 3.5% in the second quarter of 2026, while the number of employed people was 2,917.9 thousand. The employment rate among people aged 15–64 was 70.5%. For employers, this points to a limited pool of people who can be recruited quickly without additional spending on higher pay, training or retention.

The European Commission forecasts that wage growth in Bulgaria will slow to 5.7% in 2026 and 4.3% in 2027, while the labour market is expected to remain tight and unemployment to stay below 4% over the forecast period. This is a forecast, not a guaranteed outcome, and it should not automatically become a single company-wide budget percentage. Its practical value is in helping employers build scenarios.

Building a more reliable workforce budget

A practical approach starts by grouping roles by business unit, location and operational importance. For each group, employers should calculate the current full employment cost, expected pay changes, planned headcount and the cost of leaving a position vacant. This makes it easier to distinguish between higher salary costs, bonus or shift-related expenses and the cost of adding more people.

The budget should ideally include at least three scenarios. The base scenario may assume moderate pay growth and the planned hiring programme. A second scenario can reflect stronger retention pressure and higher recruitment costs. A third can address weaker demand, with hiring delayed and work redistributed or partly automated. Each scenario should have clear conditions that would trigger a change in direction.

Internal operating data are as important as external statistics. Employers should monitor revenue or value added per employee, absence, turnover, time to fill, recruitment cost and the time required for a new employee to reach expected productivity. This allows management to compare not only the cost of labour, but also the value created by different teams.

What the new minimum-wage mechanism means for employers

On 29 September 2026, Bulgaria’s State Gazette published an amendment introducing a new framework for setting the minimum wage for the following year. Parliament adopted the law on 25 September, and it enters into force on 3 October 2026. The framework is intended to take account of purchasing power and the cost of living, wage levels and distribution, wage growth and long-term labour productivity.

The distinction between the framework and the actual wage level is important. The amendment does not itself set the 2027 minimum wage. Employers should monitor the future annual wage-setting process and any relevant administrative acts once they are published. Until then, a specific amount should not be treated as an already established legal obligation in the budget.

International comparisons are useful, but not a business model

Eurostat estimated Bulgaria’s average hourly labour cost at EUR 12.0 in 2025, compared with EUR 34.9 across the European Union. This can be useful for international companies comparing locations, but it does not replace a calculation for a specific role. The comparison reflects differences in pay structures, social contributions and other employment costs, while exchange rates also matter when figures are assessed across currencies.

The most reliable 2027 workforce budget will combine official data with the organisation’s own operating information. Market indicators help employers understand the environment, but decisions on headcount, pay, retention and automation should be linked to actual revenue, productivity and growth plans. Since the second-quarter data are preliminary, budgets should be reviewed periodically as new statistics are released or business demand changes.