Using our dedicated calculator, you can easily compare your net income after taxes and insurance as a self-employed person (freelancer) or as an EOOD. This tool allows you to enter your expected income and expenses, then automatically calculates the tax and insurance burden for both options.
The choice between a self-insured person or an EOOD ( the Bulgarian version of LLC) depends on several key factors, including the amount of your income and expenses, as well as the benefits of insurance. Our goal is to provide you with accurate and personalized information to help you make informed and profitable choices for your business.
It is important to know that in addition to the factors provided in the calculator, there are many others that also have a direct bearing on which option is better for you - for example, the self-insured person is liable with all his personal property for the obligations arising from his activity, while in the case of an EOOD the liability is limited and is reduced to the amount of the constituent capital of the sole proprietor. In addition, EOOD companies are much easier to hire and report obligations to hired personnel. Although the Labor Code (TC) also allows self-employed people to hire employees, in practice this is not so easy.
There are a number of other factors that can affect you, so we advise you to contact us for a consultation before making an important decision on which legal form of your business to focus on!
The Elan Consulting insurance calculator is an intuitive tool designed for people who want to find out what is more profitable - to register as a freelancer or to register an EOOD ( the Bulgarian version of LLC). It has three main fields: expected income, expected expenses and type of occupation. Based on the information entered, the calculator automatically calculates taxes and insurance, as well as net income for each of the two options.
After the user enters the necessary data, the calculator compares the net income from the two forms of business activity - as a self-employed person and as an EOOD. As a result, it offers an analysis and recommendation for the most appropriate option according to the individual financial circumstances of the client. Thus, customers can make an informed and profitable decision about their business.
Elan Consulting's insurance calculator has been developed to help individuals receiving income from various sources such as civil contracts, liberal professions, royalties and licensing fees, etc., to make an informed choice between registering as an EOOD or working as a self-employed person. It calculates the total amount of taxes and insurance for each option, but does not cover all possible cases, such as the obligation to register under VAT in some circumstances.
It is important to note that the information provided is general and does not replace the professional advice of an accountant or accounting firm. We recommend consulting with a specialist before making important decisions about your financial and business strategy.
The decision between registering as a self-employed person or an EOOD depends on several key factors. First, it is important to determine whether this will be your main activity or an additional source of income. Next, consider the logistical aspects such as the place of work, the necessary equipment and the start-up capital.
Deciding whether to work independently or hire staff is also important. Working as a freelancer is usually more suitable for individual entrepreneurs, while EOOD allows easier hiring of employees.
Expected annual revenue also plays a role. For lower incomes, working as a freelancer may be more profitable, while an EOOD is often suitable for higher incomes due to the different tax structure.
In the current material, we will consider in a little more detail what are the pros and cons in each of the possible hypotheses!
Registration as a self-employed person who exercises a freelance profession includes various specialists such as accountants, lawyers, doctors, architects and others. Such persons must be registered in the Bulstat Register and self-insure themselves by determining their insurance income. In the case of self-insured persons, there are legally recognized costs that are taken into account in the calculation of the insurance contributions due, which facilitates the determination of the tax base.
The advantages of registering as a self-employed person include a simpler registration and deregistration procedure, as well as the possibility of using the legally recognized costs, which is especially advantageous in activities with little or no supporting documents.
Registration as a sole trader (ET) is suitable for persons carrying out commercial activities in Bulgaria. The registration procedure is somewhat more complicated than that for self-insured persons, being carried out in the Commercial Register. The ET independently pays its insurance contributions on the profit actually received, and the calculation of the contributions is based on the difference between income and expenses, without legally recognized expenses.
The sole trader bears full responsibility with his personal property for the obligations of the business. The advantages of ET include the simpler procedure for registration and deregistration in relation to EOOD, the absence of obligation to submit financial statements and the calculation of taxes and insurance contributions on the actually realized profit, which is convenient for activities with significant costs.
The choice between an EOOD and the status of a self-employed person is key for anyone planning to start their own business, especially in the field of services. This choice depends on the individual needs, business goals and financial circumstances of each entrepreneur.
EOOD offers significant advantages, such as limited liability, which protects the owner's personal property from company obligations. This is especially important for businesses that involve greater financial risk or significant investments. Also, Ltd. provides a professional image and structure that can be preferred by clients and partners, especially when looking for business extensions and hiring opportunities.
On the other hand, the status of a self-insured person is more suitable for individual entrepreneurs with lower start-up costs. It offers a simpler administrative procedure and the possibility of using legally recognized costs, which can be convenient in certain professional activities.
Ultimately, the choice between an EOOD and a self-employed person depends on the specific needs and expectations of each business. It is advisable to consult with specialists for a more detailed analysis and individual advice.
In the case of freelancers and ETs, the individual bears full personal liability to creditors, while in the case of an EOOD the liability is limited to the amount of capital contributed to the company.
No, freelancers (freelancers or self-employed) can only use 25% of legally recognised costs to reduce the tax, while ET and EOOD can deduct all their actual costs.
No, self-employed persons (freelancers) are not required to have a cash register, but they can issue invoices for their services.
Freelancers/self-employed persons and self-employed persons must register under the VAT if their turnover reaches BGN 100,000 in 12 months or if they use services from foreign contractors, such as Facebook or Google, regardless of turnover, as well as when carrying out intra-community acquisitions and others.