Journal of Information Security Research Marieta Kovacheva and Peter Yakimov 14 1 2023 https://doi.org/10.6025/jisr/2023/14/1/10-16 https://www.dline.info/jisr/fulltext/v14n1/jisrv14n1_2.pdf In the current work we have presented a macro-model for incremental rotary encoder. We have addressed the properties of the introduced encoder. We further design a digital electronic circuit which produce output signals. This encoder is designed in a way to generate simulation. The simulation results are presented.