Simples Nacional Fator R: How to Calculate It and Move From Annex V to III

Updated November 12, 2026

The fator R decides whether many service companies in Brazil's Simples Nacional pay under annex III (rates from 6%) or annex V (from 15.5%). The maths is simple: what the company spent on payroll in the last 12 months, divided by what it billed in the same period (LC 123/2006, art. 18, §5º-J and §5º-M).

1. The formula

Fator R = payroll of the last 12 months ÷ gross revenue of the last 12 months (RBT12).

At 28% or more, the activity is taxed under annex III.
Below 28%, it goes to annex V.

Payroll includes salaries, the partners' pró-labore, 13th salary, vacation pay, FGTS and the employer INSS paid. Profit distributions do not count. The ratio is recalculated every month, always over the previous 12 months.

It applies to the activities listed in §5º-I of art. 18, for example consulting, engineering, architecture, advertising and several health professions. Check your company's CNAE code with an accountant.

2. Example

A company bills R$ 30,000.00 a month (RBT12 of R$ 360,000.00) and has a payroll of R$ 7,000.00 a month (R$ 84,000.00 over 12 months).

Fator R = 84,000 ÷ 360,000 = 23.3%, below 28%: annex V.
Annex V, band 2: effective rate (360,000 × 18% − 4,500) ÷ 360,000 = 16.75%, a DAS of R$ 5,025.00 for the month.
To reach 28%, the 12-month payroll must be R$ 100,800.00: R$ 16,800.00 is missing (R$ 1,400.00 a month).
Under annex III, band 2: (360,000 × 11.2% − 9,360) ÷ 360,000 = 8.6%, a DAS of R$ 2,580.00.

Raising the pró-labore by R$ 1,400.00 costs R$ 154.00 a month in partner INSS (11%), plus income tax if it goes above the exempt band. The DAS falls by R$ 2,445.00 a month.

3. Watch out

The pró-labore must really be paid, every month, with INSS paid on it. Raising it only on paper does not count.
Because fator R uses 12 months, a higher payroll takes time to change the annex, unless the payroll is already close to 28%.
A new company (under 12 months) uses the proportional average of its months of activity.

Do the maths

In the Simples Nacional calculator, enter 12 months of revenue and payroll: it shows the fator R, the annex, the effective rate and how much payroll is missing to reach 28%. To see what each employee costs, use the employee cost calculator. Also read CLT or PJ: how to compare.

A simulation with the LC 123 tables (as rewritten by LC 155/2016); not a substitute for an accountant.

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