Often in Bulgaria, when an employee receives meal vouchers and the employee’s salary becomes subject to garnishment by a bailiff, several questions arise. The main question being whether the employee has the right to receive such vouchers and, if so, whether their value is included in the base for calculating the garnishment amount that must be withheld and paid to the bailiff.
What are the deductions in case of wage garnishment; a portion of the employee’s net income is withheld after deduction of taxes and mandatory social security contributions. The garnishment is imposed on employment income, but always within the legally established limits and rules regarding enforcement proceedings in Bulgaria.
Regarding food vouchers, several basic principles should be considered:
• employees whose remuneration is subject to garnishment do not lose the right to receive social benefits when such benefits are provided within the organization in Bulgaria;
• the employer solely determines the policy regarding remuneration and social benefits, including the provision of meal vouchers, but in order for them to be considered tax-exempt, certain requirements must be met;
• the mere existence of a garnishment notice cannot be a reason to restrict access to social benefits; otherwise, such benefits would no longer be treated as social benefits.
In this sense, garnishment is not related to the right to receive food vouchers. In other words, if the employer provides food vouchers to other employees as a social benefit, employees who are subject to garnishment should also receive food vouchers. Another frequently asked question is whether the value of food vouchers should be included in the base used for calculating garnishment deductions. According to Bulgarian legislation, garnishment may cover not only the agreed salary but also other forms of remuneration received in connection with the employment relationship, such as bonuses, premiums, awards, food vouchers, and other similar payments that the employer provides to the employee in exchange for the work performed at the enterprise where the respective individual is employed.
In this context, meal vouchers fall within the scope of the analysis of what constitutes attachable income, when considered as part of the overall remuneration package of the employee in Bulgaria.
Eurofast’s Take
The proper administration of payroll and additional employee benefits is of utmost importance for both employees and employers, which is why a careful and precise approach is required. At Eurofast, we ensure the correct application of Bulgarian legislation, the accurate calculation of salaries and deductions, and help our clients reduce the risk of errors.
For further inquiries contact us at [email protected]