Payroll in Firmify — salaries and social insurance

What does payroll mean in Firmify?

Payroll in Firmify covers the monthly process of calculating and recording employee salaries, employer social insurance contributions, and the net pay transfers — all reflected automatically in the journal.

Key concepts

Gross salary vs net salary

• Gross salary — the full amount agreed in the employment contract before deductions.
• Net salary — what the employee actually receives after withholding personal income tax (10%) and employee social/health contributions (~13.78% for 2026).

Employer contributions

On top of the gross salary, the employer pays additional social and health contributions (~18.92% for 2026). These are a company expense on top of gross.

Insurance base

Social contributions are calculated on the insurance base — the gross salary, but not below the statutory minimum and not above the statutory maximum for the occupation.

Bulgarian rates for 2026

Rates change annually — always verify on the NRA website.

Step by step in Firmify

Step 1: Set up employees

Go to Accounting → Payroll → Employees and add each employee:

• Full name and EGN (personal ID)
• Position and contract type
• Gross salary
• Insurance base (if different from gross)

Step 2: Run the monthly payroll

Go to Payroll → New Payroll Run and select the month. Firmify:

1. Calculates employee deductions (social + health + income tax)
2. Calculates employer contributions on top
3. Generates a payslip for each employee
4. Creates the journal entries automatically

Step 3: Review the journal entries

The payroll run creates three standard entries:

Entry 1 — Salary accrual (recording the liability):

Debit  604 Salary expense        3 000.00
Credit 421 Staff payable         2 610.00  (net)
Credit 4539 Income tax payable     300.00
Credit 460 Social/health payable   90.00

Entry 2 — Employer contributions:

Debit  605 Social insurance expense  568.00
Credit 460 Social/health payable     568.00

Entry 3 — Net salary payment (when you transfer to employee's account):

Debit  421 Staff payable         2 610.00
Credit 503 Bank account          2 610.00

Step 4: Pay taxes and contributions

By the 25th of the following month, transfer the withheld income tax (ДДФЛ) and social contributions to the NRA. Record these bank transfers via Bank Import or manually.

Step 5: File the monthly declaration (Декларация 1 и 6)

Firmify generates the data you need. File with the NRA:

• Declaration 1 — per-employee insurance data (by the 25th)
• Declaration 6 — summary of taxes and contributions (by the 25th)

Manager social insurance (no employment contract)

If you are the sole manager of your EOOD with no employment contract, you still owe social and health contributions on the minimum manager insurance base (currently 933 BGN/month for 2026). These are paid each month by the 25th.

In Firmify go to Payroll → Manager Insurance to record and track these contributions:

Debit  605 Social insurance expense  ~190.00
Credit 460 Social/health payable     ~190.00

Then record the payment when you transfer to NRA.