Self-Employed Tax in PHL has two main options:
Option 1: 8% Gross Income Tax
- 8% of gross receipts above ₱250,000
- Simpler, no expense deductions
- Best for low-expense freelancers
- Available if annual gross ≤ ₱3M
Option 2: Graduated Income Tax + Percentage Tax
- Income tax: 0-35% based on income brackets
- Plus 3% percentage tax (or 12% VAT if > ₱3M)
- Allows expense deductions
- Better for high-expense freelancers
Required filings:
- Quarterly Income Tax (BIR Form 1701Q): April 15, August 15, November 15
- Annual Income Tax (BIR Form 1701): April 15 of following year
- Books of accounts maintained
- Official Receipts for all transactions
What it means for you:
- Most freelancers/consultants choose 8% option (simpler)
- Register with BIR within 30 days of starting income
- Failure to register = penalties + back taxes
- Consider hiring bookkeeper for managed compliance