How to Pay Taxes and Get an ITR if You’re a Freelancer: An Ultimate Guide

Last Updated on 07/21/2020 by FilipiKnowOpens in a new tab.

This article has been reviewed and edited by Miguel DarOpens in a new tab., a CPA and an experienced tax consultant who specializes in tax audits. He provides tax advice to various start-up enterprises and clarified tax concerns of individual taxpayers. This includes assisting clients in registering their businesses, tax and bookkeeping training for start-up businesses, settling open cases, tax planning for future tax compliance and answering tax-related inquiries. 

Do freelancers pay taxes in the Philippines? How much tax should I pay as a freelancer? How can freelancers get an ITR?

These and more questions often prop up in online and offline discussions. Many Pinoy freelancers barely have an idea about filing and paying taxesOpens in a new tab. because existing rules are not as clear-cut as those for other types of taxpayersOpens in a new tab. such as employees and corporations.

Still, it’s a good measure to know what taxes you owe the government. Read on to learn the basics of taxation for freelancers in the Philippines.

Disclaimer: This article is for general information only and is not substitute for professional advice.

READ: An Ultimate Guide to Philippine Tax: Types, Computations, and Filing ProceduresOpens in a new tab.


Do Filipino freelancers need to pay tax?

Yes, freelancers are required to pay income taxOpens in a new tab. regardless if they’re working part-timeOpens in a new tab. or full-time for clients in the Philippines or abroad. Home-based workers who make money onlineOpens in a new tab. (such as web developers, writers, SEO specialists, and graphic designers) are included.

Freelancers doing business in the Philippines with overseas clients may claim whatever tax they pay in the foreign country as a tax creditOpens in a new tab.. This will technically “exempt” them from paying taxes in the foreign country.

The confusion about whether freelancers should pay income tax or not comes from the fact that the National Internal Revenue Code (also called the Tax Code) does not explicitly mention “freelancers.”

Even so, freelancers can be classified either as self-employed individualsOpens in a new tab. or mixed-income earnersOpens in a new tab. depending on the nature of work or business. Self-employed and mixed-income individuals in the Philippines are all required to file and pay income tax.


How do you register as a freelancer in the Philippines?

Like other taxpayers in the country, freelancers are required to register with the BIR (either as a self-employed individual or mixed-income earner) and get a Taxpayer Identification Number or TINOpens in a new tab. (for those who don’t have one yet). However, the specific requirements and procedures are different from other types of taxpayersOpens in a new tab..

BIR registration is the first step you must take before you can file and pay freelance taxes in the Philippines.


BIR registration steps for freelancers.

  1. Prepare all the requirements for BIR registrationOpens in a new tab.It would be very helpful if you first call the RDO where your business is located.
  2. Apply for an RDO transferOpens in a new tab. using the BIR Form 1905 if you’re previously employed. Request to transfer your registration records from your former employer’s RDO to the RDO where you’ll register as a freelancer (the RDO having jurisdiction over your place of business or residence). Wait for up to 10 working days until your RDO transfer takes effect before you proceed with the next step.
  3. Go to your new RDO and file your application for BIR registrationOpens in a new tab. using the BIR Form 1901.

Related: How to Register with BIR as a Self-Employed/Mixed-Income Individual: A Guide to BIR Form 1901Opens in a new tab.


What taxes do freelancers need to file and pay?

Once you’re registered with the BIR, take note of the different taxes (mostly income taxes and business taxes) you must file and pay. You can find this information in the BIR Form 2303 (Certificate of Registration)Opens in a new tab. issued to you when you applied for BIR registration.

1. Annual registration fee.

  • Rate: Php 500/year
  • Who are required to pay: All self-employed and mixed-income individuals
  • Form to file: BIR Form 0605Opens in a new tab. – Payment Form
  • Deadline: January 31 of every year

2. Quarterly income tax.

3. Annual income tax (tax payment for the last quarter of the taxable year).

4. Quarterly percentage tax.

  • Rate: 2% to 30% of gross sales and/or receipts1
  • Who are required to file and pay: Self-employed and mixed-income individuals whose gross annual sales and/or receipts do not exceed Php 3 million and who are not VAT-registered or those specifically required by the law
  • Who are exempted: VAT-registered businesses
  • Form to file: BIR Form 2551QOpens in a new tab. – Quarterly Percentage Tax Return
  • Deadlines: April 25 (first quarter), July 25 (second quarter), October 25 (third quarter), and January 25 (fourth quarter)

5. Monthly value-added tax.

  • Rate: A. General: 12% of gross sales (for the seller of goods) or 12% of gross receipts (for the seller of services); B. VAT Exempt Transactions2: Exempt; C. 0-rated Sales3: 0% of gross sales/receipts
  • Who are required to file and pay: VAT Registered businesses or self-employed and mixed-income individuals whose gross annual sales and/or receipts exceed Php 3 million
  • Who are exempted: Businesses required by law to pay the other percentage taxes4
  • Form to file: BIR Form 2550MOpens in a new tab. – Monthly Value-Added Tax Declaration
  • Deadline: 20th day of the following month

Note: Starting in 2023, filing and payment of VAT returns will be done only every quarter. Monthly filing of VAT will no longer be required.

6. Quarterly value-added tax.

7. Expanded/Creditable withholding tax.

  • Rate: 1% to 15% of gross income5
  • Who are required to file and pay: Self-employed and mixed-income individuals whose income is subject to expanded withholding taxOpens in a new tab. (e.g., professional fees, talent fees, rental income, etc.)
  • Who are exempt: Those who are exempted from income tax with a certificate of exemptionOpens in a new tab. (i.e. BMBE)
  • Form to file: BIR Form 1601-EQOpens in a new tab. – Quarterly Remittance Return of Creditable Income Taxes Withheld (Expanded)
  • Deadlines: April 30 (first quarter), July 31 (second quarter), October 31 (third quarter), and January 31 (fourth quarter)
  • Monthly payments using BIR Form 0605 must be made during the first two months of each quarter

How can freelancers get an ITR?

Freelancers are considered businesses and therefore shall file their own tax returns.

If the taxpayer is also employed, then he should request BIR Form 2316Opens in a new tab. from his employer in order for him to claim the creditable withholding taxes.

Simply file the appropriate ITR with the BIR. It’s BIR Form 1701Opens in a new tab. for self-employed individuals availing of the itemized deduction under the graduated income tax rates and mixed-income earners. For self-employed individuals availing of the 8% tax rate or optional standard deduction under the graduated tax rates, the correct form to file is BIR Form 1701AOpens in a new tab..

Related: What is the difference between BIR Form 1701 and BIR Form 1701A? Which ITR should I use?Opens in a new tab.

After filing and paying your income tax, the BIR will issue a stamped and validated copy of your ITR to you. This serves as your proof of income tax filing and payment for the applicable year.


Frequently Asked Questions.

1. How can I compute my income tax?Opens in a new tab.

2. What is the difference between BIR Form 1701 and BIR Form 1701A? Which ITR should I use?Opens in a new tab.

3. Should I file income tax under the 8% special rate or the graduated rates?Opens in a new tab.

4. I’m availing of the graduated tax rates. Which should I choose: itemized deduction or optional standard deduction?

5. I’m a freelancer. How can I get a copy of my ITR?

6. Can I claim foreign tax credit in the Philippines? How?Opens in a new tab.

7. I want to quit freelancing. Am I required to file for business closure in BIR?Opens in a new tab.



  1. National Internal Revenue Code (1997), Title VOpens in a new tab.
  2. Revenue Regulations (RR) No. 16-2005, Section 4.109-1Opens in a new tab.
  3. Revenue Regulations No. 16-2005, Section 4.106-5 and Section 4.108-5Opens in a new tab.
  4. National Internal Revenue Code (1997), Section 109, (B) and (E)Opens in a new tab.
  5. Revenue Regulations 02-1998, Section 2.57Opens in a new tab.

Venus Zoleta

Venus Zoleta is an experienced writer and editor for over 10 years, covering topics on personal finance, travel, government services, and digital marketing. Her background is in journalism and corporate communications. In her early 20s, she started investing and purchased a home. Now, she advocates financial literacy for Filipinos and shares her knowledge online. When she's not working, Venus bonds with her pet cats and binges on Korean dramas and Pinoy rom-coms.

14 thoughts on “How to Pay Taxes and Get an ITR if You’re a Freelancer: An Ultimate Guide

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