Days before the final presentation of the draft budget for next year, the tension between unions, employers and the state is growing. The Minister of Finance has not yet officially commented on the parameters, but it is already clear that there will be changes in social security contributions, pensions and the minimum wage. On Nova TV, the President of the Confederation of Bulgarian Trade Unions Plamen Dimitrov and the Chairman of the General Assembly of the Association of Industrial Capital in Bulgaria Vasil Velev presented their views on the expected effects of the draft budget.
The minimum wage – by law, but with tension
According to Dimitrov, the minimum wage for 2026 will be determined by the current law — 50% of the average for the country, which is equal to about 620 euros. The law will not be changed, and the decision is the result of “complex coalition talks“.
The union leader emphasized that this increase is important, but does not solve all the problems on the labor market. According to him, there are uncertainties about whether the planned average increase in income by 5% also covers the automatic increases in sectors such as security, healthcare and education.
Pensions will grow by about 7.6%
Pensions are expected to be updated from January 1 under the so-called “Swiss rule“ – by about 7.6 percent. The increase will be financed mainly by higher social security contributions, which are expected to increase by 2 percentage points.
According to the unions, this is a predictable and sustainable solution, since “workers always pay pensions in real time“. However, employers do not agree that this is the best approach.
Employers: The increase in contributions will burden the real sector
Vasil Velev stated that the higher social security contributions will be paid mainly by people employed in the real economy, since employees in the “Security“, “Defense“ and “Judiciary“ sectors do not pay social security contributions.
“Private sector workers will pay the salary increases in the state sector“, Velev pointed out. According to his calculations, with a salary of 2,000 leva, if the total social security burden increases by 3 percentage points, the worker will receive about 58 leva less net remuneration.
He warned that this increase will reduce the possibility of raising salaries and may lead to layoffs and bankruptcies in weaker enterprises.
Different estimates of the effect on the budget
According to Dimitrov, the increase in contributions will bring about 1.2 billion euros in additional revenue to the system, which will cover the increase in pensions. Velev, however, believes that the effect will not be as positive, as higher taxes on labor may stimulate the shadow economy.
“This is an incentive to pay money in an envelope and to hide income“, he warned and recalled that Bulgaria is already among the countries with the highest social security burden in the EU.
The public sector - large and expensive
The two participants agreed on the opinion that public administration costs remain high. Velev noted that those employed in the budget sector are about 22% of all workers, while the average for the EU is 18 percent.
The high salaries in some state-owned enterprises and institutions were also mentioned, which arouse public discontent, especially against the backdrop of the tension surrounding the social security burden. “For every leva that we divide in two, there cannot be people with 20 thousand leva salaries in state-owned companies“, the guests commented.
Unions: There is a reserve in profits
According to Plamen Dimitrov, some companies have the opportunity to compensate for the additional costs through part of the profits, which are expected to exceed 65 billion leva in 2025. He pointed out that enterprises that achieve good results can allocate funds for better remuneration, while the risk of difficulties is real for those that lose.
Despite the differences, both stressed the need for predictability and transparency in preparing the budget. According to them, society needs a clear explanation of how any increase in taxes and contributions will affect income and social payments. The final version of the budget is expected to be submitted to the National Assembly by mid-November.