Freelancer tax: 8% or graduated, on ₱800,000
TRAIN law (R.A. 10963): self-employed individuals and professionals with gross receipts not above the VAT threshold of ₱3,000,000 may choose 8% on gross receipts in excess of ₱250,000, in lieu of the graduated rates and the percentage tax under Section 116.
Example
Illustrative example only. Gross receipts ₱800,000, expenses ₱320,000.
| Option | Computation | Tax |
|---|---|---|
| 8% | (₱800,000 − ₱250,000) × 8% | ₱44,000 |
| Graduated | Taxable ₱480,000: ₱22,500 + 20% of ₱80,000 | ₱38,500 |
| Percentage tax | ₱800,000 × 3% | ₱24,000 |
| Graduated total | ₱62,500 |
⚠️ Tandaan
The answer changes with your expenses. High real expenses can favor graduated. Mixed income earners have their own rule: compensation stays on the graduated rates. Check the current percentage tax rate and BIR rules before you choose.
Bago pumili
- ☐ Add up your gross receipts
- ☐ List your real expenses
- ☐ Compute both options
- ☐ Check your BIR registration
Quarterly tax calculator, handa na: 8% vs graduated 👇
Basis: R.A. 10963 (TRAIN), amending NIRC Secs. 24(A)(2), 109(BB), 116.