Who can choose 8%?
- Self-employed individuals and professionals (including freelancers and online sellers).
- Mixed income earners, for their business income.
- Your gross sales/receipts and other non-operating income must not exceed ₱3,000,000 in the year, and you must not be VAT-registered.
When and how to elect
| Your situation | How to elect |
|---|---|
| New business | Tick the 8% option in BIR Form 1901 when you register |
| Existing registered taxpayer | Elect in your first quarterly income tax return (1701Q) of the year, due 15 May |
| Changing from last year | Update your registration (Form 1905) before the first quarter return |
The election is irrevocable for the year. If you don’t signify it, you are treated as choosing graduated rates.
Filing calendar for 8% taxpayers
- Quarterly income tax return (1701Q): 15 May, 15 August and 15 November.
- Annual return (1701A, or 1701 for mixed earners): 15 April of the next year.
- No monthly or quarterly percentage tax returns are needed for the year you choose 8%.
Example: ₱30,000 a month from freelancing
₱360,000 a year → 8% × (₱360,000 − ₱250,000) = ₱8,800.00. With OSD and percentage tax it would be ₱10,800.00.
What if I go over ₱3 million?
Once your gross sales exceed ₱3,000,000 during the year, you must register for VAT and you lose the 8% option from then on. The income earned up to that point is re-computed at graduated rates, so keep an eye on your running total.
Don’t forget the other registration steps
- Register your books of accounts and get your invoices printed or set up a BIR-accredited invoicing system.
- Display your Certificate of Registration (Form 2303) where you work.
- No annual registration fee to pay anymore — the Ease of Paying Taxes Act (RA 11976) removed it in 2024.
Once everything is set up, the 8% option is one of the simplest ways to stay compliant as a freelancer: one tax, quarterly returns, and a short annual return.
FAQ
When is the deadline to elect the 8% option?
On or before the due date of your first quarterly income tax return of the year (15 May), or at registration if you are new.
How much tax on ₱30,000 a month freelance income?
₱8,800.00 for the year under the 8% option (₱360,000 − ₱250,000 = ₱110,000 × 8%).
Can I go back to graduated rates?
Not within the same year — the election is irrevocable for that taxable year. You can choose again next year.
Sources (checked 5 November 2026): NIRC Sec. 24(A)(2) as amended by RA 10963 (TRAIN) — graduated income tax table effective 1 January 2023 and the 8% option on gross sales/receipts above ₱250,000 for taxpayers with gross receipts not over ₱3,000,000; Sec. 34(L) optional standard deduction of 40% of gross sales/receipts; Sec. 116 percentage tax of 3% (the 1% CREATE rate ended 30 June 2023); Revenue Regulations No. 8-2018 (election of the 8% option, mixed income earners); bir.gov.ph. No change to these rates had been announced for 2027.