03 October 2023
Employment Tax
Impact High
Summary
The Accident Prevention Factor (FAP) index, which impacts the monthly employer’s social security rate for the 2024 tax year, should be reviewed. Objections to the FAP index (if applicable) must be submitted in November 2023.
The Detail
The FAP is an index that varies from 0.5000 to 2.0000 and must be monthly multiplied by the RAT rate – Environmental Risks at Work (1%, 2% or 3%) – to determine a company’s social security obligations.
The FAP is reviewed annually by the Brazilian Ministry of Social Security at the end of September based on the history of work accidents that each one of the company´s establishments has presented in the last two years.
Considering the annual variation in the FAP index and the possible impacts on monthly social security contributions (which may result in increased payroll costs), it is important that employers review their FAP indexation factor to ensure it is correct. If any errors / issues are identified, it is possible to submit an objection against the annual indexation by presenting the appropriate justifications for disregarding or adjusting information used to compose the new value presented.
The deadline for contesting the FAP takes place during the month of November, and companies are responsible for accessing the dataprev website (fap.dataprev.gov.br) and consult their results, analyzing whether it is appropriate to present an impugnation requesting a reduction in this/these multiplier indexation.
In addition to the financial impacts, the FAP´s validation and impugnation could also lead to the gradual reduction of the indexation to be applied in subsequent years, considering that the mapping and investigation work increases employers’ attention on the subject.
How we can help
The Vialto Partners Brazil Employment Tax team can assist clients with identifying the impacts and/or opportunities resulting from these changes as well as implementing the required adjustments in the compensation package and payroll processing.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
• Flavia Fernandes, Country Leader | flavia.fernandes@vialto.com
• Reinaldo Medina, Director | reinaldo.medina@vialto.com
• Juliana Andres, Senior Manager | juliana.andres@vialto.com
• Natalia SPinto, Manager | natalia.spinto@vialto.com
Further information on Vialto Partners can be found here: www.vialtopartners.com
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