Remote Work and Home Office in Bulgaria — Labour and Tax Aspects (2026)

Legal framework — Labour Code Section VIIIb

Remote work has its own regulation in the Labour Code, introduced in 2011 with amendments in 2024. It sits in Section VIIIb of Chapter Five (individual employment contract), Articles 107з–107п:

Remote work vs home-based work (надомна работа)

The two regimes are often confused but are legally distinct:

• Remote work (Art. 107з) — labour performed outside the employer’s premises using information technology. Typical: office worker operating from home with a laptop.
• Home-based work (Art. 107б–107е) — piecework production in the worker’s home. Typical: sewing, handicraft. No IT requirement.

“Home office” for most companies is remote work, not home-based work.

The employment contract or addendum — required clauses

Remote work is voluntary (Art. 107з(2) LC) — the employer cannot unilaterally impose it, nor can the employee unilaterally refuse. The switch is formalised via an addendum to an existing contract or, for new hires, within the individual employment contract.

Mandatory content (Art. 107з(3))

• Specific workplace — the address where work will be performed (important for health & safety and tax purposes).
• Scope and nature of the work — what portion of duties is performed remotely.
• Duration and distribution of working time.
• Performance reporting method.
• Communication arrangements with the team and line manager.
• Equipment, consumables and other expenses — who bears what.
• Confidentiality and data protection requirements.
• Rules for monitoring performance and working time.

Employer obligations (Art. 107и)

Art. 107и LC specifies obligations borne by the employer “at its own expense”, unless the individual contract provides otherwise:

Paragraph 3 — borne by the employer

1. Equipment to perform the work — laptop, monitor, keyboard, chairs, desk phones.
2. Consumables — paper, toner, stationery.
3. Software — operating system, office suite, specialised tools, VPN.
4. Instructions and information on operating the equipment and occupational safety.
5. Monitoring system — only with the employee’s written consent and within GDPR.
6. Data protection of both parties — technical and organisational measures.
7. Communications, including internet connectivity if required for the work.

Agreed use of personal equipment

If the contract states that the employee uses personal equipment (e.g. personal laptop), the employer pays compensation for depreciation and consumables. This is mandatory in such cases — otherwise the employer breaches Art. 107и.

Practical recommendation

For transparency and clean tax treatment we recommend:

• An internal remote-work policy with fixed compensation rates (e.g. monthly internet allowance).
• Equipment inventory receipt for provided hardware.
• Clear return rules upon termination of employment.

Tax treatment of expenses

For the employer (CITA)

Expenses for equipment, consumables and communications are deductible under CITA when:

• They arise from the employment contract or internal policy.
• They are documented with primary records (invoices, inventory receipts).
• They are linked to the company’s business activity.

Depreciable assets (laptops, monitors, desks) are booked into the accounting depreciation schedule. Consumables and subscriptions — direct current expense.

For the employee (PITA)

Under Art. 24(2)(9) PITA, the value of work clothing, equipment and consumables provided by the employer is not taxable income for the employee, provided their use is related to performance of the employee’s duties.

Compensation for the use of personal equipment and consumables, paid under the contract, is treated as expense reimbursement — non-taxable, no social contributions, provided:

• The compensation is reasonably comparable to actual expenses.
• The basis for payment is explicitly recorded in the contract or internal act.
• The amount is not a substitute for salary.

Where the compensation materially exceeds actual expenses (e.g. EUR 500/month for home internet), the NRA may reclassify the excess as taxable income and assess tax plus contributions.

Social security in remote work

Remote work is a form of employment — social security follows the ordinary regime under Art. 4(1)(1) KSO. Expenses for equipment and consumables are not part of the insurable income.

Work from Bulgaria (no cross-border element)

Ordinary treatment: the employer withholds and remits all contributions as for office-based employees. Minimum insurable income per NKPD and KID-2008 (Appendix 1 SBSSI). Maximum — EUR 2,111.64/month.

Occupational-medicine service

Under the Health and Safety at Work Act, the employer provides an occupational-medicine service for home-office workers too. A risk assessment of the workplace is mandatory — via photos or video where a physical visit is impractical.

Working from abroad — A1, PE risk and tax residence

A Bulgarian employment contract performed from abroad (“workation”, long-term stay with a spouse abroad) triggers three types of risk: social security, employer tax and employee tax.

1. Social security — Regulation 883/2004 (EU)

In the EU/EEA/Switzerland, a single state’s social-security law applies. The rules, briefly:

• Posting up to 24 months — insurance in the sending state (Bulgaria). An A1 certificate from the NRA is required.
• Multi-state activity — when work is performed in several states, insurance lies in the state of residence if ≥25% of activity is performed there (Art. 13 Reg. 883/2004).
• Telework Framework Agreement (in force 1 July 2023) — special rules for cross-border telework up to 50% of working time. Bulgaria is a signatory.

2. Permanent establishment (PE) risk for the employer

If an employee performs work from abroad long-term, a permanent establishment of the Bulgarian company may arise in that state under Art. 5 of the relevant DTT. Consequences:

• Employer registration in the foreign state.
• Corporate income attributable to the PE is taxed there.
• Obligations for accounting, reporting, local VAT/payroll.

Key factors for PE qualification in practice: duration (over 6 months generally creates risk), nature of the work (managerial, contract-concluding is riskier than technical), existence of an office in the foreign state.

3. Tax residence of the employee

A stay over 183 days in a foreign state may shift the tax residence of the employee (from Bulgarian to foreign — “centre of vital interests”). Consequences: double taxation, filing obligations in both states, application of the DTT. See our article on the tax-residence certificate.

Health and safety, working time, and the right to disconnect

Occupational safety

The employer remains responsible for healthy and safe working conditions (Art. 107л LC). In practice:

• Risk assessment of the home-office workplace.
• Information and instruction on ergonomics, fire safety, electrical safety.
• Records in the employee file.

Working time and right to disconnect

Rules on working time, rest periods and overtime apply in full. Recommended practice: an explicit right to disconnect clause — periods when the employee is not required to respond to emails or calls. A 2021 European Parliament resolution encourages anchoring this right in national legislation. Bulgaria is yet to codify it formally.

Occupational accident in a home office

An incident during working time in a home office may qualify as an occupational accident. See our article on occupational accidents.

Common mistakes in home-office implementation

1. Remote work without an addendum. Oral agreement does not satisfy Art. 107з LC and exposes the employer to administrative liability.
2. Unclear cost allocation. Without a “who pays what” clause, disputes and tax risks arise.
3. “Own equipment” without compensation. Breach of Art. 107и.
4. Systematic video monitoring without written consent. Breach of LC and GDPR. See our article on workplace video monitoring.
5. Ignoring work from abroad. Without A1 or a PE analysis, retrospective tax assessment is a risk.
6. Missing workplace risk assessment. Leads to joint liability on accident.
7. Compensation replacing salary. NRA reclassifies and assesses tax and contributions.
8. No right-to-disconnect policy. Creates complaints and overwork liability for the employer.

The Labour Code text is available at lex.bg. The European Framework Agreement on telework is at ec.europa.eu.

Frequently asked questions