| QUARTERLY TAX CALCULATOR — 8% option vs graduated rates (2026) |
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| Draft computation for BIR Forms 1701Q and 2551Q. Yellow = your numbers (orange = example, replace them). It does not file anything. |
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| Taxable year | 2026 |
| Purely self-employed / professional? (No = also earns a salary) | Yes |
| Option you chose on the Q1 return | 8% option |
| If graduated: deduction method | OSD 40% |
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| Q1 (Jan–Mar) | Q2 (Apr–Jun) | Q3 (Jul–Sep) | Q4 / annual return |
| YOUR NUMBERS FOR THE QUARTER (not cumulative) | | | | |
| Gross sales / receipts this quarter | 180,000.00 | 210,000.00 | 240,000.00 | 260,000.00 |
| Other non-operating income this quarter (interest, FX gain) | 0.00 | 0.00 | 1,200.00 | 0.00 |
| Cost of sales / services this quarter (itemized only) | 0.00 | 0.00 | 0.00 | 0.00 |
| Operating expenses this quarter (itemized only) | 28,000.00 | 31,000.00 | 30,000.00 | 35,000.00 |
| Tax withheld by clients this quarter (BIR Form 2307) | 300.00 | 300.00 | 300.00 | 300.00 |
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| CUMULATIVE FROM 1 JANUARY (the 1701Q is cumulative) | | | | |
| Gross sales / receipts | 180,000.00 | 390,000.00 | 630,000.00 | 890,000.00 |
| Other non-operating income | 0.00 | 0.00 | 1,200.00 | 1,200.00 |
| Cost of sales / services | 0.00 | 0.00 | 0.00 | 0.00 |
| Operating expenses | 28,000.00 | 59,000.00 | 89,000.00 | 124,000.00 |
| Tax withheld by clients (2307) | 300.00 | 600.00 | 900.00 | 1,200.00 |
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| A. 8% OPTION — in lieu of graduated income tax AND 3% percentage tax | | | | |
| Gross sales/receipts + other non-operating income | 180,000.00 | 390,000.00 | 631,200.00 | 891,200.00 |
| Less: ₱250,000 (purely self-employed only) | 250,000.00 | 250,000.00 | 250,000.00 | 250,000.00 |
| Taxable amount | 0.00 | 140,000.00 | 381,200.00 | 641,200.00 |
| Income tax due, cumulative (8%) | 0.00 | 11,200.00 | 30,496.00 | 51,296.00 |
| Less: tax withheld by clients, cumulative | 300.00 | 600.00 | 900.00 | 1,200.00 |
| Less: income tax paid in previous quarters | 0.00 | 0.00 | 10,600.00 | 29,596.00 |
| Income tax payable this quarter — 8% | 0.00 | 10,600.00 | 18,996.00 | 20,500.00 |
| Percentage tax (2551Q) under the 8% option | 0.00 | 0.00 | 0.00 | 0.00 |
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| B. GRADUATED RATES — income tax on net income + 3% percentage tax every quarter | | | | |
| Deductions, cumulative (OSD = 40% of gross sales/receipts) | 72,000.00 | 156,000.00 | 252,000.00 | 356,000.00 |
| Taxable income, cumulative | 108,000.00 | 234,000.00 | 379,200.00 | 535,200.00 |
| Income tax due, cumulative (graduated table) | 0.00 | 0.00 | 19,380.00 | 49,540.00 |
| Less: tax withheld by clients, cumulative | 300.00 | 600.00 | 900.00 | 1,200.00 |
| Less: income tax paid in previous quarters | 0.00 | 0.00 | 0.00 | 18,480.00 |
| Income tax payable this quarter — graduated | 0.00 | 0.00 | 18,480.00 | 29,860.00 |
| Percentage tax this quarter — 3% of gross sales/receipts (2551Q) | 5,400.00 | 6,300.00 | 7,200.00 | 7,800.00 |
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| COMPARE (year to date) | | | | |
| A. 8% option — total tax so far | 0.00 | 11,200.00 | 30,496.00 | 51,296.00 |
| B. Graduated — income tax + percentage tax so far | 5,400.00 | 11,700.00 | 38,280.00 | 76,240.00 |
| Difference (B − A); positive = 8% is cheaper | 5,400.00 | 500.00 | 7,784.00 | 24,944.00 |
| Lower so far | 8% option | 8% option | 8% option | 8% option |
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| WHAT TO PAY — according to the option in B6 | | | | |
| Income tax with 1701Q (Q4: annual return 1701A/1701) | 0.00 | 10,600.00 | 18,996.00 | 20,500.00 |
| Percentage tax with 2551Q | 0.00 | 0.00 | 0.00 | 0.00 |
| Deadline — 1701Q / annual return | 2026-05-15 | 2026-08-17 | 2026-11-16 | 2027-04-15 |
| Deadline — 2551Q | 2026-04-27 | 2026-07-27 | 2026-10-26 | 2027-01-25 |
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| Can you use the 8% option? | Yes, if you are non-VAT and chose it on the Q1 return (or at registration) |
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| ■ How it works |
| • The quarterly return is cumulative: each quarter you compute tax on January-to-date figures and subtract what you already paid. |
| • 8% option: 8% of gross sales/receipts and other non-operating income above ₱250,000. It replaces the graduated income tax and |
| the 3% percentage tax (NIRC Sec. 24(A)(2)(b) as amended by RA 10963; RR No. 8-2018). Mixed-income earners get no ₱250,000 deduction. |
| • You choose it on the first-quarter return (or when you register). The choice holds for the whole year. If you do not choose it, graduated rates apply. |
| • Graduated rates: table on the Rates sheet (2023 onwards) on net income. OSD = 40% of gross sales/receipts instead of itemized expenses. |
| • Percentage tax for non-VAT taxpayers: 3% of gross quarterly sales/receipts (NIRC Sec. 116; back to 3% from 1 July 2023 after CREATE). |
| • Deadlines: weekends moved to the next working day. The BIR may extend or move dates — check bir.gov.ph before you pay. |
| • Not covered here: VAT-registered taxpayers, mixed-income compensation, prior-year excess credits, penalties. |
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| Template — check against the current BIR/DepEd rules. Not tax/legal advice. © Layers (layers.md) · CC BY 4.0 |