The business environment is getting more dynamic and the work on various projects requires employees to be sent on a business trip or relocated from one location to a different location in Bulgaria or abroad. These processes demand careful planning and compliance with specific legal and organizational requirements. Knowing of the legal framework gives to employers and employees operational efficiency, flexibility and clarity about rights and obligations under the employment relationship.
The present article explores some key aspects of the sending on business trips and relocation of employees from one location in Bulgaria to another.
Sending on a business trip
Sending on a business trip is a commonly used option by employers to send employees from one location in Bulgaria to another when the work requires it. In this way, the employer unilaterally changes the employee’s permanent place of employment.
- The employer can send on a business trip for no more than 30 consecutive calendar days. A business trip for a longer term is possible only with the employee’s explicit written consent. However, there is no legal restriction on the number of the business trips under one employment agreement. There is no limitation in the duration of the business trip, but if the employee has agreed about it in writing.
Business trips are determined in calendar days where the days for task completion, travelling, weekends and public holidays are included.
- The employee sent on a business trip is bound by the working hours of the enterprise where he is sent. When the task is not directly related to the work of that enterprise, the employee may determine his own working hours, in compliance with the working hours established for him and the days of the business trip.
- The sending to a business trip is initiated with a preliminary written employer’s order. In exceptional circumstances, when immediate departure is required, the business trip can be carried out based on the employer’s oral order, who is obliged to issue a written order within 3 days.
The order shall contain the location, task and the duration of the trip, allowance, way of travelling, the type of employee’s report on the work performed for the period of the trip, etc. The order may be amended with a new written order.
- The employee sent on a business trip is entitled to:
- his gross labour remuneration for the period of the trip – in the amount of the remuneration, received for the last month prior to the sending on a business trip;
- travel, daily and accommodation allowance for the period of the business trip – paid by the employer (exception is possible upon an agreement with another enterprise).
- The travel allowance shall cover the travel expenses to and from the location, as well as for the public transport within the location.
The employer has the right to specify the way of travelling in the order.
The employee shall not be entitled to travel allowance when the travelling to the location is free for him or when he is already there for other reasons.
Special rules are legally provided in cases where:
- the employee uses his own car;
- more than one employee travel in one car;
- the business trip exceeds 1 month.
- The employee sent on a business trip shall be paid daily allowance as follows:
- BGN 40 per day if the employee stays overnight at the location;
- BGN 20 per day if the employee performs his official duties during most of the working time in another location without staying overnight.
The employee may be paid daily allowance of up to 200 % of the amount above.
The employee shall not be entitled to daily allowance for days when he returns to his permanent place of work for reports, studies, etc. or he uses free all-day meals at the location.
- The employee sent on a business trip shall be paid accommodation allowance for an overnight stay at the location in the actual amount against a document issued in compliance with the established procedure, but not more than the approved amount for one night.
No accommodation allowance is due where free accommodation is used at the place of secondment. If the employer provides for accommodation, this shall be specified in his order.
- The employee shall provide a report (account) of the work done within 3 days after his return from the business trip. The managers shall give an opinion on the report within 5 days.
The allowances above shall be paid against:
- order for sending on a business trip;
- copy of an employee’s written report – when this is required in the order;
- an account of the travel, daily and accommodation allowances, together with proof of the accommodation allowance paid and a ticket or other document certifying the travel expenses incurred.
The amount of the accommodation allowances shall be approved. The approved amount may be higher than that the initial one in the employer’s order.
Relocation
The employment relations cannot be amended by only one of the parties. This is also valid for the change of the place of employment, except for the sending on a business trip (i.e. for short period of time). The employee shall agree and be compensated to work for a longer period in another location.
- An employer and an employee may agree in writing to change the initial place of employment. This is the relocation of an employee which is an option provided in the Labour Code. The relocation contains the idea of an employee who lives and works else.
- The employer and the employee may agree that the employee shall be paid:
- the travel expenses for the employee and for the members of his family;
- the expenses on transportation of the household furnishings of the employee;
- a remuneration for the days of travel plus two extra days.
- The employer and employee may agree that the employee shall be paid the expenses for his return and the return of the members of his family to the location of permanent residence when the employment agreement has been terminated, and the termination is not further to a notification on the part of the employee or his fault.
- The employer may agree to make none, all or part of the above payments to the employee, except in cases the relocation is not at the request of the employee. Other benefits for the employee can also be agreed.
If the relocation is not at the request of the employee, the employee is entitled to the above payments, and the employer shall make them.
- In addition, when the distance of the relocation exceeds 100 km and the relocation is for a period exceeding one year, the employee shall be paid also the agreed monthly remuneration for the new work and a remuneration amounting to one-fourth of the same amount for each dependent member of the employee’s family – to be paid by the employer to which the employee is relocated.
Social security and tax aspects
- Social security contributions
No social security contributions are due on the allowances for a business trip. However, if the paid daily allowance exceeds the double amount of the legally provided daily allowance for the business trip, social security contributions are due on the excess.
No social security contributions are due on the compensations for relocation, except for the remuneration for the days of travelling plus two extra days.
- Taxes
The allowances for sending on a business trip and the compensations for relocation are excluded from the individuals’ taxable income. There are two exceptions where income tax shall be due:
- the paid daily allowance that exceeds the double amount of the legally provided daily allowances for secondment – on the excess;
- the remuneration for the days of travel plus two extra days in case of relocation.
An accounting expense shall be recognized for corporate tax purposes when it is supported by accounting source documents (i.e. documents that carry information on economic operation registered for a first time). The employer shall have the legally required documents – agreements, orders, reports, etc. Pursuant to the Corporate Income Tax Act, the accounting of the travel and daily allowances and expenses of individuals shall be recognized for tax purposes, when the travel and stay were performed in connection with the activity of the taxable person and are expenses of an employee.
