Brazil: Disclosure of the Accident Prevention Factor applicable to 2025

07 Oct 2024    2 minute read

In brief

On 30 September 2024, the Social Security Department published on its website the new Accident Prevention Factor (FAP) rate for companies, which will have a direct impact on company's payroll social contributions for the year 2025.

Contents

In Detail

FAP is a multiplication factor that varies from 0.5 to 2.0 points, which is applied upon the tax rate of the Labor Accident Contribution (SAT/RAT) and is calculated based on the frequency, level of importance, and treatment cost of the labor sick leaves and labor accidents of each company.

In order to obtain the SAT rate for the year 2025, taxpayers must multiply the SAT/RAT rate by the FAP released.

Example of calculation:

  • Company's branch SAT = 3%
  •  Company's branch FAP = 1.5
  • SAT/RAT for 2021: SAT x FAP = 3 x 1.5 = 4.5%

Accordingly, companies that present low incidence of labor illnesses and accidents (consequently, low FAP) may reduce their SAT/RAT tax rate (by either 1%, 2% or 3%) down to 50%, according to the security measures adopted by the company.

On the other hand, legal entities that present high incidence of labor illnesses and accidents (consequently, high FAP), may see an increase of their SAT/RAT tax rate, up to 100%.

Reccomedations

We recommend that each company verify its FAP rate applicable to 2025 as well as verify and analyze the list (released with the FAP) of labor accidents and illnesses occurring during this period.

The consultation of the FAP applicable to 2025 is made through this link, with access through the system "Gov.Br" with the company's PIN code or public key certificate.

If the company disagrees with the data disclosed by the Social Security Ministry (in which the FAP calculation was based), the company will be allowed to file an administrative defense before the Social Security Administrative Court (CRPS) during the period of 1 November to 30 November 2024, through an electronic form available on the Social Security Department website.

It is worth noting that the new ordinance does not have a suspensive effect, meaning that the company must pay the SAT/RAT with the FAP index made available and if its defense is granted, it could recover the amount unduly paid.

Finally, we stress that the companies may also file judicial measures against the application of the FAP as well as this new lack of suspensive effect.

NB: This e-alert is a general review of the subjects discussed above and does not constitute a legal opinion or legal advice.

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