Individual or Company in HOF: Carnê-Leão or CNPJ

Every professional who starts earning from orofacial harmonization (HOF) reaches the same question: do I stay an individual or open a CNPJ (the company registration number in Brazil)? Colleagues' answers tend to be categorical ("open a company, you'll pay less", "no need, carnê-leão covers it"), and both can be right or wrong depending on revenue, costs and each person's way of working.

This guide shows how the two options work, what changes in tax, paperwork and clinic structure, and which questions to bring to your accountant. It is not tax advice: rules change, and the right decision depends on your numbers. The example values are fictional and do not represent the tax burden of any real clinic. Everything refers to the Brazilian tax system.

How do an individual and a company really differ?

There is no "always cheaper" answer. A professional with low revenue and many deductible expenses can have a low burden as an individual. Another, with higher revenue and a structured payroll, may pay less under Simples Nacional. That is what the simulator below helps explore.

To test scenarios, use the Simples Nacional vs individual simulator, keeping in mind it is a simplified comparison.

How does carnê-leão work?

Carnê-leão is the monthly income tax payment for people who receive income from individuals (or from abroad) without tax withheld at the source. In the routine of a self-employed HOF professional, this includes what individual patients pay directly to them.

General points, which the Receita Federal details on its website and which may change:

• Tax applies to net income: what was received minus the deductible expenses recorded in the cashbook (livro-caixa).
• The professional enters monthly income and expenses in the Receita's system (currently Carnê-Leão Web, accessed through gov.br) and pays the tax due by the deadline in the following month.
• Payments made by a company to the professional usually have tax withheld at the source and follow a different logic.
• Paying carnê-leão does not replace the annual income tax return.
• The tax table and the rules on exemption and reduction were changed recently. Confirm current values on the Receita Federal website and with your accountant, and do not use numbers from memory.

What goes in the cashbook?

The cashbook records the income and expenses of the activity. In general, you can deduct expenses necessary to earn the income and maintain the source of income, such as rent for the treatment space, consumables, third-party services and other expenses tied to the activity, within the conditions of the law. Some expenses do not qualify, and the rule requires proof. Your accountant decides what applies to your case.

How does a CNPJ work under Simples Nacional?

Simples Nacional combines several taxes into one monthly payment slip, calculated on gross revenue with rates that depend on the table (annex) the activity falls under and on the revenue bracket. For health services, two annexes often come up in the discussion:

What decides which annex the activity falls under, in some cases, is factor R: the ratio between the payroll of the last 12 months (including pró-labore) and gross revenue for the same period. In general, when factor R reaches 28% or more, the activity is taxed under Annex III; below that, under Annex V. That is why the pró-labore amount and the team structure weigh on the math.

Hypothetical example: a clinic bills R$ 40,000.00 a month. If pró-labore and payroll together stay below 28% of the last 12 months' revenue, the activity may fall into the higher-rate annex, and the math changes. Raising the pró-labore increases the social security contribution and may reduce the Simples tax. Only an accountant can calculate the optimal amount with your numbers. The values are fictional.

Other points that often enter the decision:

• MEI: in general, health professionals with a university degree cannot be MEI. Confirm your activity on the official list on the Portal do Empreendedor.
• Company type: single-member limited company, simple partnership and other forms differ in liability and registration. The professional council may require the company to be registered.
• Presumed profit (lucro presumido): another regime, which may be more advantageous in certain brackets. Your accountant will compare.
• Municipal ISS: inside or outside Simples, municipal law matters.

Choosing the CNAE (economic activity code) and opening the company have their own steps: see CNAE for a harmonization clinic and opening an orofacial harmonization clinic. The tax reform changes arriving from 2027 are covered in IBS and CBS in the HOF clinic.

How much does a CNPJ cost?

A CNPJ has recurring costs that an individual does not. Make a list with real figures, asking for written quotes:

These costs are not prohibitive, but they exist even when the month's revenue is low. That is why the decision should look at average revenue over recent months and expected growth. To see the basis for the calculation, use the break-even calculator.

And the patient's income tax deduction?

Patients ask: "can I deduct this from my income tax?" That rule belongs to the Receita Federal and the patient's accountant, not the clinic. In general terms, income tax law treats health expenses with specific rules on the type of expense and the provider, and requires a receipt with the provider's CPF or CNPJ. The criteria for aesthetic procedures are debated and vary depending on the purpose of the treatment.

What the clinic can do:

1. Issue the correct document, with the provider's details, the amount and the service actually provided.
2. Not promise a deduction, nor suggest that "you can deduct it".
3. Advise the patient to consult their accountant or the Receita Federal's material.
4. Never change the description of the service to make a deduction easier. See service invoices in the HOF clinic.

How to decide? A roadmap

1. Gather the numbers. Monthly revenue for the last 6 to 12 months, documented expenses, desired pró-labore.
2. List your working model. Do you work alone or with a team? In a rented room or your own clinic? Do you sell products?
3. Simulate with your accountant the scenarios: carnê-leão with a cashbook, Simples Nacional and, if it makes sense, another regime.
4. Consider the non-financial side. Asset liability, partnerships with clinics, hiring, professional image and council requirements.
5. Calculate the tipping point. At what revenue does the company start to pay off?
6. Decide and record the reason for the choice so you can review it when the clinic enters a new phase.

When does a company tend to make more sense? And an individual?

With no fixed rule, some situations tend to tip the balance one way or the other:

This table is general guidance and does not replace the simulation. In both cases, clinical documentation (patient record, consents) and obligations to the council stay the same.

Common mistakes

• Opening a CNPJ just because "everyone does", without simulating.
• Staying an individual with high revenue without planning for carnê-leão.
• Mixing personal and clinic accounts.
• Choosing the CNAE or annex without consulting your accountant.
• Lowering pró-labore to pay less without calculating the effect on factor R and INSS.
• Forgetting to keep expense receipts.
• Promising the patient an income tax deduction.

Checklist for deciding

• Do I have revenue and expenses for recent months organized?
• Have I talked to an accountant who works with health professionals?
• Have I simulated carnê-leão and Simples Nacional, and another regime if relevant?
• Have I checked whether my activity can be MEI (in general it cannot)?
• Have I considered factor R and pró-labore?
• Do I know the fixed costs of a CNPJ in my city?
• Have I checked my council's requirements for companies?
• Have I set a date to review the decision?

Individual and company are two tools. Choosing well means measuring what each costs for your way of working right now, and knowing when the math changes.