The article was written in the context of a Shared Task on the Analysis of Narrative levels Through Annotation (“SANTA”) which was published as a first draft in 2019. This revised version is based on further discussion on the formalization of the narratological concept of ‘narrative level.’ We firstly discuss the theory of narrative levels in literary studies, secondly derive features for the identification of narrative levels and finally develop guidelines for their annotation. An essential finding of the theoretical work lies in connecting the concept of ‘narrative level’ to the narrator. By identifying different types of narrators, we are able to enumerate and categorize different scenarios for the emergence of new levels in narrative texts. Hereby, the article does not remain restricted to prototypical cases, but also deals with rare and problematic cases. Overall, our goal is to provide a theoretical reflection on narrative levels and to create accurate guidelines for its recognition. The method of approaching the phenomenon through annotation has proven to be extremely fruitful particularly in identifying the boundaries of the narrative levels.