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IwatchBulgaria.com - News - Taxes on labor in 2011
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Taxes on labor in 2011
submited on 20.12.2010 in category Fiscal affairs
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Industry Watch has presented its regular tax-insurance calculator. The tool that helps you estimate taxes on labor for 2011 is available at tax.iwatchbulgaria.com

We define the tax-insurance burden (or tax wedge) as the share of mandatory social secutity contributions and personal income tax in the total labor costs. In 2010 that share was 32.3% for most of the wages up to BGN 2000 per month. In 2011 we will see a rise of the burden up to 33.5%.

Hiring labor in Bulgaria is among the deals that are being taxed with excessively high rates. According to official statistics avergare wage in Q3 2010 was BGN 638. For such gross wage, the employer sees the following distribution of his labor costs:

  • total labor costs - BGN 751.56
  • tax and insurances - BGN 251.44
  • net income of employee - BGN 500.13

For wages over BGN 2000 the tax wedge shrinks. However it fall under 20% for wages of BGN 5200 and above.

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