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

This article has been reviewed and edited by Miguel Dar, a CPA and an experienced tax consultant who specializes in tax audits.

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 taxes because existing rules are not as clear-cut as those for other types of taxpayers 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 Procedures


Table of Contents


Do Filipino Freelancers Need To Pay Tax?

Yes, freelancers are required to pay income tax regardless if they’re working part-time or full-time for clients in the Philippines or abroad. Home-based workers who make money online (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 credit. 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 individuals or mixed-income earners 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 TIN (for those who don’t have one yet). However, the specific requirements and procedures are different from other types of taxpayers.

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 your BIR Form 1901. You will use this to file your BIR registration. 
  2. Apply for RDO transfer by submitting BIR Form 1905 to your old RDO (if applicable). As per Revenue Memorandum Order No. 37-2019, your tax records must be at the RDO with jurisdiction over your place of residence. So shoud you decide to become a freelancer and your registration records are still kept outside of your place of residence, you need to submit the appropriate form to your old RDO to process the transfer of records to your new RDO.
  3. Request an Occupational Tax Receipt (OTR) from the municipal/city hall with jurisdiction over your place of residence. Bring one valid ID as proof that you’re residing in the address you will use for registration. Note that the payment for the request of OTR depends on your municipal/city hall.
  4. Proceed to the BIR RDO assigned to the address you’ll register as a freelancer and submit the required documents. These include the duly accomplished BIR Form 1901, stamped BIR Form 1905 (if you applied for an RDO transfer), and OTR. Since you’re a freelancer, you can select the option on your BIR Form 1901 that allows you to file your income tax under the 8% flat tax rate instead of graduated tax rates that are more appropriate for businesses and individuals with larger expenses.
  5. Wait for your Certificate of Registration (COR) to be released. Once your COR is released (usually within 1 to 5 days), ask a BIR officer about where to acquire/purchase accredited Official Receipts Booklet and accounting book. These will serve as your records in case BIR requests them from you. 

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


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) 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 0605 – 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 2551Q – 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 2550M – 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 tax (e.g., professional fees, talent fees, rental income, etc.
  • Who are exempt: Those who are exempted from income tax with a certificate of exemption (i.e. BMBE)
  • Form to file: BIR Form 1601-EQ – 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 quarte

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 2316 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 1701 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 1701A.

Related: What is the difference between BIR Form 1701 and BIR Form 1701A? Which ITR should I use?

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.

Related: How To Get ITR in the Philippines: Online and Offline Methods


Frequently Asked Questions

1. How can I compute my income tax?

2. What is the difference between BIR Form 1701 and BIR Form 1701A? Which ITR should I use?

3. Should I file income tax under the 8% special rate or the graduated rates?

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?

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



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

Miguel Antonio Dar II, CPA

Miguel Dar is a CPA and an experienced tax adviser specializing in tax audits. He gives tax advice to different start-ups and clarifies tax concerns of individual taxpayers. This includes helping clients register their businesses, training in tax and bookkeeping for start-up businesses, settling open cases, tax planning for future tax compliance, and responding to tax-related inquiries.

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

  1. G-damnit ! I started freelancing online in 2014 and have been earning 6 figs starting around 2016..
    I’ve never paid any taxes and I’m not even interested to pay taxes.
    So what is my consequence?

  2. Pingback: How to Close a Business in the Philippines in 2021: An Ultimate Guide
  3. Pingback: BIR Form 1901: Registration for Self-Employed/Mixed-Income Individual
  4. Pingback: How to Get TIN Number in the Philippines: Complete Step-by-Step Guide
  5. Pingback: BIR Business Registration 2020: A Complete Step-by-Step Guide
  6. Pingback: How to Register a Business in the Philippines: The Ultimate Guide
  7. Pingback: 45 Home-Based Online Jobs in the Philippines (Up to Php160K/month)

Leave a Reply to Datu Maria Pythonizta Cancel reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More Philippine taxation guides: