Outgoing Cabinet Approves 5% Pay Rise for Public Sector Workers

The Council of Ministers on January 21 approved a decision to implement provisions of the so-called Budget Extension Act concerning the indexation of salaries for employees in budget-funded organisations, the government press service announced.

Based on data provided by the National Statistical Institute (NSI), the accumulated annual inflation as of 31 December 2025 has been set at 5%. For the purposes of applying the relevant provision of the extension law, this means that, with effect from 1 January 2026, salaries of employees in budget-funded organisations will be indexed by 5%.

Public sector pay to rise by 5%, with backdated payments expected in February

Under the application of the cited provision, the basic monthly salaries reached as of 31 December 2025 in budget-funded organisations may neither be reduced nor increased within the same position. In other words, no regulatory acts or other mechanisms for pay rises will be applied, except for the increases explicitly in the extension law. These include: an increase in pay for employees on the minimum wage, and a one-off indexation equal to the accumulated annual inflation as of 31 December 2025, amounting to 5%, for all other employees in the budget sector.

On 15 January, the outgoing Minister of Finance, Temenuzhka Petkova, told the media that the outgoing government would apply the more favourable regime for Bulgarian citizens and would carry out a one-off indexation of salaries for all employees in the budget sector by 5%, as provided for by law.

In December 2025, Parliament voted in favour of indexing salaries in the budget sector, a measure that was incorporated into the so-called Budget Extension Act.