Freelancing in the Philippines has become one of the most popular ways to earn a living — from online writers and virtual assistants to graphic designers and software developers. But along with this freedom comes one important responsibility: paying your taxes.
If you’ve ever wondered how to start or felt intimidated by the process, don’t worry. This guide will explain how to file and pay your freelancer taxes in the Philippines step-by-step, updated for 2025.
Why Freelancers Need to Pay Taxes
Freelancers are considered self-employed individuals by the Bureau of Internal Revenue (BIR). That means you’re both the employer and employee, and you’re required to register, file, and pay your own taxes.
Aside from being a legal obligation, paying taxes also gives you access to benefits such as:
- Applying for loans (like SSS or bank loans)
- Getting government records (for visa or business permits)
- Avoiding penalties and closure orders from the BIR
Step 1: Register with the BIR
Before you can file taxes, you need to register as a freelancer. Here’s how:
A. Prepare the Requirements:
- Filled-out BIR Form 1901 (Application for Registration for Self-Employed Individuals)
- Valid ID (government-issued)
- Proof of Address (like a lease contract or utility bill)
- Birth certificate (optional but sometimes requested)
- Tax Identification Number (TIN) – if you don’t have one, this will be issued to you.
B. Go to Your RDO (Revenue District Office)
Visit the RDO where you live and submit your documents. You’ll also need to pay the following:
- ₱500 Annual Registration Fee (using BIR Form 0605)
- ₱30 Documentary Stamp Tax (on your Certificate of Registration)
Once approved, you’ll receive your Certificate of Registration (COR) — also known as Form 2303.
Step 2: Get Official Receipts
After registration, you must apply for official receipts (ORs) — either printed from a BIR-accredited printer or generated electronically through eOR/eInvoicing systems.
This is what you’ll issue to clients as proof of payment.
Pro tip: Many freelancers now use online accounting tools that include e-receipts for easier tracking.
Step 3: Track Your Income and Expenses
Freelancers are taxed on net income, which means:
Taxable Income = Total Income – Allowable Expenses
Common deductible expenses include:
- Internet and phone bills
- Office supplies and equipment
- Software subscriptions
- Electricity or coworking space fees
Keep receipts or invoices as proof — the BIR may request them anytime.
Step 4: File Your Tax Returns
As a freelancer, you’ll file your own Income Tax and Percentage Tax (if applicable).
Here’s the schedule for 2025:
A. Quarterly Income Tax
- 1st Quarter: On or before May 15
- 2nd Quarter: On or before August 15
- 3rd Quarter: On or before November 15
B. Annual Income Tax Return
- Deadline: On or before April 15 of the following year
C. Percentage Tax (if applicable)
If you’re not VAT-registered and earning below ₱3,000,000 annually, you’ll pay 3% percentage tax (under the regular system) or choose the 8% flat income tax on gross sales.
Filing Forms:
- BIR Form 2551Q – Percentage Tax
- BIR Form 1701Q – Quarterly Income Tax
- BIR Form 1701A – Annual Income Tax
Step 5: Pay Your Taxes Online
Good news — you don’t need to line up at the BIR anymore!
You can now pay taxes using BIR’s ePayment channels, such as:
- GCash
- Maya
- Landbank Link.Biz
- UnionBank Online
- AUB Online Banking
- BPI or Metrobank Online (via bills payment)
Just select “Bureau of Internal Revenue” as the biller and input your TIN and branch code correctly.
Step 6: Keep Copies of Everything
Always keep digital or printed copies of:
- Filed forms (1701A, 2551Q, etc.)
- Payment confirmation receipts
- Certificates of Registration and ORs
These are important if the BIR ever asks for documentation or if you apply for loans, visas, or business permits.
How Much Tax Do Freelancers Pay?
If you’re earning below ₱250,000 per year, you don’t need to pay income tax (but you still need to file your return).
For those earning above that:
- You can choose the 8% flat income tax rate (on gross earnings above ₱250,000), or
- The graduated tax rates (0%–35%) if you have many deductible expenses.
Example:
If you earned ₱600,000 in a year and choose the 8% rate:
₱600,000 – ₱250,000 = ₱350,000
₱350,000 × 8% = ₱28,000 tax due
Blogger’s Corner
Let’s be honest — taxes are not the most exciting part of freelancing. But they’re part of being a professional and responsible earner.
Once you’ve set up your system — registration, record-keeping, and e-filing — it becomes easier every quarter. No more panic every April!
If you’re serious about building a sustainable freelancing career, take time to understand your taxes. It’s not just about compliance — it’s about financial freedom and peace of mind.