What Self-Employed Individuals Need to Know About Insurance in Bulgaria in 2024

Self-employment in Bulgaria is diverse and impactful, contributing significantly to the economy. While it offers freedom and flexibility, self-employed individuals must also address the critical obligation of insuring themselves against risks such as illness, old age, and death. In this comprehensive guide, we delve into the details of insurance contributions for self-employed persons in Bulgaria, shedding light on the obligations, deadlines, and important considerations to ensure compliance and financial security in 2024.

Defining Self-Employed Persons

According to the Social Security Code (SSC) in Bulgaria, self-employed persons refer to individuals engaged in economic activities independently, assuming personal responsibility for their businesses’ success or failure. This category includes:

  • Individuals registered as exercising free professions or craft activities.
  • Those performing professional activities at their own risk and expense, registered in the EIC under the BULSTAT register.
  • Sole traders, owners, or partners in commercial companies.
  • Natural persons participating in unincorporated companies.
  • Farmers and tobacco producers registered under relevant regulations.

Insurance Obligation and Deadlines

The obligation to insure oneself as a self-employed person arises from the commencement or resumption of employment and continues until its interruption or termination.

To comply with this obligation, self-employed individuals must register the start of their employment by submitting a declaration to the National Revenue Agency within seven days of commencement.

Similarly, any interruption, termination, or resumption of activity must be declared promptly within the same timeframe.

Types of Insurance and Flexibility

Self-employed persons are compulsorily insured for invalidity due to general illness, old age, and death through the Pension Fund. Additionally, they have the option to voluntarily insure themselves for general sickness and maternity. Each year, until the end of January, self-employed individuals may change the type of insurance for the upcoming calendar year, offering flexibility to adapt to changing circumstances. However, self-employed persons who have been granted a pension are insured only if they choose to do so.

Calculation of Contributions

Monthly contributions are based on a selected income, which must fall within the range of the minimum and maximum monthly social security income for the relevant year. As of 01.01.2024, the minimum social security income is BGN 933.00, while the maximum is BGN 3750.00. Contributions are due by the 25th of the following month, accompanied by the submission of Declaration No 1 “Data on the insured person.” Additionally, an annual Declaration No 6 “Data on contributions payable” must be submitted by 30 April of the subsequent year, detailing the final amount of monthly social security income.

The final amount of the monthly social security income for self-employed individuals is established by referencing the information provided in the summary accompanying the annual tax return as per the Personal Income Tax Act (PITTA). This final amount must adhere to specific criteria. It cannot fall below the minimum monthly social security income determined by the PITTA for the applicable year, nor exceed the maximum monthly social security income. The calculation of the social security income subject to contributions is derived from the disparity between the amounts owed in contributions and those already paid.

Important Considerations

In cases where self-employed persons engage in other employment activities and receive income, social security contributions are calculated based on the sum of all received income. This includes income from employment and the chosen income as a self-employed person, with the monthly insurance income capped at the maximum monthly insurance income for the year.

When self-employed individuals receive income for work without an employment relationship, contracting authorities are not required to make social security contributions or deduct them from the remuneration. However, self-employed persons must still account for this income when determining their final insurance income, regardless of the nature of the activity for which they are registered.

For further guidance on obligations for self-employed persons in 2024, please liaise with Eurofast HR and Payroll experts in Bulgaria at sofia@eurofast.eu.

Natalia Rumyanova
Head of EOR Department
Eurofast Sofia