Brazil: MEI cost and when it stops being worth it

What the MEI is

The Individual Microentrepreneur is the simplest way to formalize a small activity: you open a CNPJ free of charge on the Entrepreneur Portal, pay a fixed amount per month and are exempt from several obligations that a larger company has. With the INSS up to date, you are entitled to benefits such as old-age retirement, sickness benefit and maternity pay, once the waiting periods are met.

In exchange, the MEI has limits: only some activities are allowed (the list is in Annex XI of CGSN Resolution 140/2018), there is a revenue ceiling, you cannot have a partner and the structure is small.

What it costs: the 2026 DAS

The DAS is a fixed monthly amount that does not depend on how much you invoice. It is the INSS, 5% of the minimum wage, which in 2026 is R$1,621.00 and gives R$81.05, plus R$1.00 of ICMS if the activity is trade or industry and/or R$5.00 of ISS if it is services.

• Trade and industry: R$82.05 a month.
• Services: R$86.05 a month.
• Trade and services: R$87.05 a month.
• MEI independent cargo transporter: INSS of 12% (R$194.52), and totals of R$195.52 to R$200.52.

The revenue limit

The MEI can invoice up to R$81,000 a year. Whoever opens during the year has R$6,750 per month of activity, counting a fraction of a month as a whole month. What counts is revenue, gross receipts, not profit.

If you go over the limit by up to 20% (R$97,200 in a full year), you pay a complementary slip on the excess and become a microenterprise from the following year. If you go over by more than 20%, the exit from the MEI applies from January 1 (or from the opening), and taxes are recalculated as a microenterprise.

There is a complementary bill, PLP 186/2026, that proposes raising the limit to R$110 thousand in 2027 and R$140 thousand in 2028. On October 5, 2026 it had not yet been approved: the R$81 thousand limit applies.

What the MEI can and cannot do

• It cannot be the owner, partner or manager of another company, nor have more than one establishment (Complementary Law 123/2006, art. 18-A).
• It can have a single employee, earning one minimum wage or the category floor; the MEI pays 3% on their salary (art. 18-C).
• It issues invoices to clients with a CNPJ; for individuals the invoice is waived. It keeps the gross revenue report every month.
• It files the annual declaration (DASN-SIMEI) by the last day of May, even if it had no revenue.

When it stops being worth it

The MEI stops serving when the business goes over the limit, when you need a partner or more than one employee, when the activity is not on the list or when clients ask for a bigger structure. Then comes the microenterprise, in the Simples Nacional: in trade, the first bracket (revenue of up to R$180 thousand in 12 months) has a nominal rate of 4.00% (Annex I of Complementary Law 123/2006), and the rate rises with revenue, with more obligations.

The decision depends on your case: the type of activity, the margin and what you pay in other taxes. So, when you go over the limit, talk to an accountant before deciding.