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Freelancer Tax on ₱3,000,000 a Year: 8% vs Graduated
On ₱3,000,000 gross: 8% tax is ₱220,000, graduated rates plus 3% percentage tax are ₱442,500. See which is lower for you.
1. Your freelance or business income (a year)
Expenses
Tax on your freelance income
8% flat taxLower
₱220,000
Graduated rates
₱442,500
💡 The 8% option saves you about ₱222,500 a year.
How it works
- ✔8% option: 8% of your gross receipts, instead of both the graduated income tax and the 3% percentage tax. Only if your gross is ₱3 million or less and you're not VAT-registered.
- ✔Purely self-employed: the first ₱250,000 is tax-free under the 8% option. Mixed income earners: no ₱250,000 deduction, because it's already used on the salary.
- ✔Graduated option: the BIR tax table on your net income (gross minus 40%, or minus your actual expenses with receipts), plus 3% percentage tax on gross.
- ✔Choose the 8% option in your first quarterly income tax return (BIR Form 1701Q). You can't change it for the rest of the year.
- ✔Register with the BIR (Form 1901) and issue official receipts or invoices.
Estimate under the TRAIN law (RR 8-2018), rules last checked October 2026. Not tax advice; for your filing, ask the BIR or an accountant. 🔒 Everything stays on your device.
Questions people ask
Is the 8% tax better for freelancers?+
Usually, if your expenses are low. With the 40% standard deduction, the graduated option adds 3% percentage tax, so 8% is often lower. If your real expenses are very high, the graduated option can win.
Who can choose the 8% income tax?+
Self-employed people and professionals whose gross sales or receipts are ₱3 million or less a year and who aren't VAT-registered.
Do mixed income earners get the ₱250,000 deduction?+
No. If you also have a salary, the 8% applies to all your gross receipts, because the ₱250,000 is already used against your salary.
When do I choose the 8% option?+
In your first quarterly income tax return for the year (BIR Form 1701Q), or when you register. The choice can't be changed for that year.