Philippines
Compare 8% flat tax vs graduated rates under TRAIN Law. See which regime saves you more on your freelance income.
For reference only. Not an official government tool. If results differ from official calculations, please notify us.
Total Tax
Take Home
Monthly Tax
Monthly Take Home
How Your Tax Is Calculated
Deductions Applied
How Your Philippines Freelance Tax Is Calculated
The Philippines calculator implements two tax methods under the TRAIN Law (RA 10963) and shows you the lower option:
8% Flat Rate Calculation
Tax = (Gross Annual Income − ₱250,000) × 8%
This replaces both the graduated income tax and the 3% percentage tax. No deductions are allowed. Only available if gross receipts are ₱3,000,000 or less.
Graduated Rate Calculation
Taxable Income = Gross Income − Optional Standard Deduction (40% of gross)
Tax = Applied against TRAIN Law progressive brackets: 0% up to ₱250K, then 15%, 20%, 25%, 30%, 35%
The calculator automatically applies the 40% Optional Standard Deduction under graduated rates, giving you an apples-to-apples comparison with the 8% flat rate.
The calculator also includes the mandatory contributions (SSS, PhilHealth, Pag-IBIG) as these are deductible under the graduated method and affect the bottom line. Your effective tax rate is shown as a percentage of gross income so you can easily compare across countries.
Learn More About the Philippines
Complete Tax Guide (2025)
BIR registration, 8% vs graduated, deadlines, deductions
Cost of Living for Freelancers
Monthly budgets for Manila, Cebu, and beyond
Tax Guide for Foreign Freelancers
Resident vs non-resident rules, rates, and treaties
Digital Nomad Guide
Visa-free extensions, 183-day rule, best nomad cities
Official Sources
- • BIR Revenue Regulations — TRAIN Law (RA 10963) tax brackets and rates
- • BIR Form 1701Q — Quarterly Income Tax Return for Self-Employed
- • BIR Revenue Memorandum Circulars — Annual threshold adjustments
- bir.gov.ph
Philippines Freelancer Tax Guide
Do freelancers pay income tax in the Philippines?
Yes. If you earn income from freelance or self-employed work in the Philippines, you must file and pay income tax under the TRAIN Law (Tax Reform for Acceleration and Inclusion). This applies whether your clients are local companies or foreign ones.
8% flat rate or graduated — which should I choose?
The 8% flat rate is simpler and usually cheaper if your gross income is under ₱3,000,000/year with few deductible expenses. Graduated rates (0%–35%) may be better if you have significant business expenses, since you can deduct them from taxable income. Use the calculator above to compare both — enter your income and check which option gives you a lower bill.
What's the difference between the two methods?
Under the 8% flat rate, you pay 8% of your gross receipts over ₱250,000. No deductions allowed. Under graduated rates, you pay progressive brackets starting at 0% for the first ₱250,000, but you can claim the optional 40% standard deduction on gross receipts — meaning only 60% of your income is taxed. The calculator shows you both so you can pick the winner.
When is the tax filing deadline?
The annual income tax return (ITR) is due on or before April 15 of the following year. Quarterly declarations are due in May, August, and November. Late filing carries a 25% surcharge plus interest on the amount due.
Do I need to register with the BIR?
Yes. All self-employed individuals must register with the Bureau of Internal Revenue (BIR) and get a Taxpayer Identification Number (TIN). You should register within 30 days of starting your freelance work. Failure to register can result in penalties and make it harder to issue official receipts to clients.
Can I deduct SSS, PhilHealth, and Pag-IBIG contributions?
Yes, if you choose graduated rates. SSS contributions, PhilHealth premiums, and Pag-IBIG contributions are all deductible as business expenses. Under the 8% flat rate, no deductions are allowed — but you're also exempt from the 3% percentage tax, which can offset the difference.
What happens if I don't file my taxes?
Late filing carries a 25% surcharge on the tax due plus 12% annual interest on the unpaid amount. Failure to register can result in fines of ₱5,000–25,000. For serious non-compliance or tax evasion, penalties can include imprisonment of 6–10 years. The BIR is increasingly digitalizing enforcement, and with bank records and online payment platforms, undeclared income is becoming harder to hide.
Fahmi
Freelance Software Engineer & Tax Researcher
Researching and maintaining freelance tax guides for 6 Asian countries based on official government regulations.