If you live in the Philippines and earn from freelance clients, including clients abroad who pay through Upwork, Wise, or Payoneer, you are a self-employed taxpayer and should register with the BIR. Registration is now mostly online: fill in BIR Form 1901 in the BIR’s Online Registration and Update System (ORUS), attach one government ID, pay PHP 30 documentary stamp tax, and download your electronic Certificate of Registration. If you already have a TIN from a job, you update that registration instead of getting a new one.
For almost every VA earning under PHP 3 million a year, the 8% income tax option is the cheaper choice. At PHP 60,000 a month (PHP 720,000 a year), 8% costs PHP 37,600 for the year; graduated rates plus percentage tax cost PHP 50,500. The arithmetic is below.
This guide is general information based on BIR publications as of September 2026, not tax advice for your situation. Your Revenue District Office (RDO) or a licensed accountant can confirm details for your case.
What changed recently
- No more annual registration fee. The Ease of Paying Taxes (EOPT) Act, RA 11976, took effect January 22, 2024, and abolished the PHP 500 yearly fee. Old checklists that tell you to pay Form 0605 every January are out of date.
- File and pay anywhere. Under EOPT you can file and pay with any authorized agent bank, RDO, or authorized tax software provider without a wrong-venue penalty.
- Invoices replace official receipts for services. Your sales document is now a registered invoice.
- Micro taxpayers get lighter penalties. EOPT classifies anyone with gross sales under PHP 3 million as a micro taxpayer and gives micro and small taxpayers a 10% surcharge instead of 25%, half the usual interest, and a PHP 500 fine for certain late information returns.
- E-invoicing deadline, but not for you yet. RMC 98-2026 (September 22, 2026) requires covered taxpayers to issue electronic invoices by December 31, 2026, and explicitly exempts micro taxpayers. It also says invoices made in Word, Excel, Google Docs, or Sheets are not valid electronic invoices.
- Deposit interest is taxed at 20% from July 1, 2025 (RR 21-2025), including dollar accounts. That is withheld by the bank and is separate from your freelance income.
Step-by-step registration through ORUS
The BIR’s Taxpayer’s Guide for Online Sellers sets out the ORUS route. For a VA it looks like this:
- Check whether you already have a TIN. If you have ever been employed, you almost certainly do. You may hold only one TIN for life, so do not apply for a second one. If you have one, you will be updating your registration (Form 1905) to add self-employment, and possibly transferring to the RDO for your home address.
- Create an ORUS account at orus.bir.gov.ph with an email address you will keep.
- Start the application. New registrants choose New Registration > Individual > BIR Form 1901. Existing TIN holders use the registration update option.
- Fill in Form 1901. The October 2025 version of the form asks, among other things:
- Taxpayer type (item 6): most VAs choose “Professional – In General” or “Single Proprietorship Only”. Use Single Proprietorship if you will trade under a DTI-registered business name.
- Item 23: “Are you availing of the 8% income tax rate option in lieu of graduated income tax rates?” Tick Yes if you are choosing 8%.
- Item 24, taxpayer classification: “Micro” if you expect gross sales under PHP 3 million.
- Line of business: describe it plainly, for example “administrative support services to foreign clients”.
- Attach a scanned government ID showing your name, address, and birthdate. If it has no address, add a proof of residence.
- Pay the PHP 30 loose DST online. The BIR guide lists Link.BizPortal with ATM cards from LANDBANK, BPI, AUB, PSBank, RCBC, Robinsons Bank, and UnionBank.
- Download and print your electronic Certificate of Registration (Form 2303). Check the tax types listed. On 8% you should see income tax; on graduated rates, income tax and percentage tax.
- Register your books of accounts in ORUS. Under RMC 3-2023, books are registered online and ORUS generates a QR stamp you paste on the first page. Do this before your first quarterly income tax return is due.
- Get invoices. Either buy BIR Printed Invoices at your RDO or apply for an Authority to Print with an accredited printer using Form 1906. Under EOPT, you issue a registered invoice for each sale of PHP 500 or more.
- Display your registration. The BIR requires the COR and the Notice to Issue Invoice to be displayed at your place of business. If you sell your services through your own website or social media pages, RR 7-2024 also requires posting proof of BIR registration there; RMC 99-2026 gives covered online businesses until October 31, 2026 to display the BIR Registration Seal badge.
Keep the email and PDF copies of everything. You will need the COR when a bank or client asks for proof of registration.
The forms and deadlines you will file
From the BIR’s filing schedule for self-employed individuals:
| Form | What it is | Who files | Deadline |
|---|---|---|---|
| 1701Q | Quarterly income tax return | Everyone self-employed | May 15 (Q1), August 15 (Q2), November 15 (Q3) |
| 1701A | Annual income tax return | Purely self-employed on 8% or OSD | April 15 of the following year |
| 1701 | Annual income tax return | Mixed income earners, or itemized deductions | April 15 of the following year |
| 2551Q | Quarterly percentage tax return (3%) | Non-VAT taxpayers on graduated rates | April 25, July 25, October 25, January 25 |
If you chose 8%, you do not file 2551Q, because the 8% rate is in place of both graduated income tax and percentage tax.
File even when no tax is due. A 1701Q showing zero tax still has to be filed on time. You file electronically using the BIR’s Offline eBIRForms package and pay through an ePayment channel; the BIR lists LANDBANK Link.BizPortal, DBP PayTax Online, and tax software providers such as MyEG (which accepts GCash, Maya, and cards) and Maya.
8% or graduated: the decision with real numbers
The rules
- 8% option: 8% of gross receipts above PHP 250,000 for purely self-employed individuals. It replaces both the graduated income tax and the 3% percentage tax. You qualify if your gross receipts and other non-operating income do not exceed PHP 3 million and you are not VAT-registered (RR 8-2018).
- Graduated rates: you pay income tax on net income at 0% to 35%, plus 3% percentage tax on gross receipts every quarter (the rate returned to 3% on July 1, 2023 under RMC 69-2023). For net income you either take the optional standard deduction (OSD) of 40% of gross receipts or itemize actual expenses with receipts.
The graduated table for 2023 onward:
| Taxable income | Tax |
|---|---|
| Up to PHP 250,000 | 0 |
| Over 250,000 to 400,000 | 15% of the excess over 250,000 |
| Over 400,000 to 800,000 | PHP 22,500 + 20% of the excess over 400,000 |
| Over 800,000 to 2,000,000 | PHP 102,500 + 25% of the excess over 800,000 |
| Over 2,000,000 to 8,000,000 | PHP 402,500 + 30% of the excess over 2,000,000 |
| Over 8,000,000 | PHP 2,202,500 + 35% of the excess over 8,000,000 |
Worked example: PHP 720,000 a year
Example: Mark, a VA in Davao, bills a US client USD 1,000 a month and receives about PHP 60,000, or PHP 720,000 for the year. He has no other income.
On 8%:
(720,000 - 250,000) x 8% = 470,000 x 0.08 = PHP 37,600
On graduated rates with the 40% OSD:
Taxable income = 720,000 x 60% = 432,000 Income tax = 22,500 + 20% x (432,000 - 400,000) = 22,500 + 6,400 = 28,900 Percentage tax = 3% x 720,000 = 21,600 Total = PHP 50,500
8% saves Mark PHP 12,900 and means four fewer returns a year.
At other income levels
| Gross receipts a year | 8% option | Graduated + OSD + 3% percentage tax | Cheaper |
|---|---|---|---|
| PHP 200,000 | 0 | 0 + 6,000 = 6,000 | 8% |
| PHP 300,000 | 4,000 | 0 + 9,000 = 9,000 | 8% |
| PHP 720,000 | 37,600 | 28,900 + 21,600 = 50,500 | 8% |
| PHP 1,500,000 | 100,000 | 127,500 + 45,000 = 172,500 | 8% |
Graduated rates only win when your real, documented expenses are a very large share of your income. Example: an agency owner with PHP 1.5 million gross who pays PHP 1 million to subcontractors and itemizes. Net income is PHP 500,000, tax is PHP 42,500, percentage tax is PHP 45,000, total PHP 87,500, against PHP 100,000 on 8%. A solo VA with a laptop, internet, and software as expenses will not come close.
If you are also employed
If you have a job and freelance on the side, you are a mixed income earner. Your salary stays on graduated rates through your employer. You can still choose 8% for the freelance income, but the PHP 250,000 deduction does not apply to it, because your salary already uses the zero bracket. So PHP 300,000 of side income would be taxed at 8% x 300,000 = PHP 24,000.
How to choose 8%, and how to lose it
The BIR guide says you signify the 8% choice:
- In your first year: on Form 1901 at registration (item 23), or on your first quarterly return of the year (1701Q or 2551Q).
- In later years: by filing Form 1905 at the start of the year to end your percentage tax registration, or by choosing 8% on your first quarterly return of the year.
If you do neither, graduated rates apply for the whole year and you cannot switch mid-year. If your gross receipts go over PHP 3 million, you lose the 8% option and become subject to graduated rates and VAT.
Quarterly filing on 8%: a worked year
The 8% tax is computed on cumulative receipts, and each quarter you pay the difference from what you already paid. Using Mark’s PHP 60,000 a month:
| Return | Cumulative gross | Tax on cumulative (over 250,000 at 8%) | Already paid | Pay now | Due |
|---|---|---|---|---|---|
| 1701Q Q1 | 180,000 | 0 | 0 | 0 | May 15 |
| 1701Q Q2 | 360,000 | 8,800 | 0 | 8,800 | August 15 |
| 1701Q Q3 | 540,000 | 23,200 | 8,800 | 14,400 | November 15 |
| 1701A annual | 720,000 | 37,600 | 23,200 | 14,400 | April 15 next year |
Notice that there is no fourth quarterly return; the annual 1701A covers it. Set aside 6% of each payment as you receive it and the bills will not surprise you.
Records that make filing easy
Keep one spreadsheet with: date received, client, invoice number, amount in USD, platform or transfer fees, pesos received, and which account it landed in. Save the Wise, Payoneer, or Upwork statement for each month. Gross receipts means what you were paid before your own expenses; settle once with your RDO or accountant how you treat platform service fees, then apply it consistently.
The BIR requires books and records to be kept for five years from the filing deadline of the return they support.
Common mistakes
- Getting a second TIN because the first one is “from an old job”. It is the same TIN for life; update it.
- Skipping 1701Q because no tax was due. Late filing still draws penalties.
- Not ticking 8% in the first quarter and discovering in April that the whole year is on graduated rates plus percentage tax.
- Forgetting 2551Q if you did not choose 8%. It is due every quarter, including Q4 on January 25.
- Using a Word or Canva invoice as your official invoice. Your client-facing invoice is fine for billing, but your BIR sales record has to be a registered invoice (printed by an accredited printer, a BIR Printed Invoice, or a registered system).
- Never closing the registration. If you stop freelancing, file Form 1905 to cancel or update, or the BIR will keep expecting returns.
FAQ
Do I need to register if all my clients are abroad?
Yes. Philippine residents are taxed on income from all sources, so payments from foreign clients count.
Can I register without going to the RDO?
In most cases, yes. ORUS handles new registration, updates, and books of accounts, and the DST can be paid online. You may still need to visit the RDO to buy BIR Printed Invoices or if ORUS rejects something.
What if I registered late?
Register now rather than waiting. The longer the gap, the more returns are missing. Under EOPT, micro taxpayers face reduced surcharges and interest, which makes catching up cheaper than it used to be.
Where do I learn the rest of the payment side?
See How to get paid as a VA for accounts, the invoice and payment terms guide for billing, and the rate guide to build tax into your rate.
Sources and further reading
- BIR: Taxpayer’s Guide for Online Sellers (registration routes, ORUS steps, deadlines, 8% election)
- BIR Form 1901, October 2025 version
- BIR: Online Registration and Update System (ORUS)
- BIR: Ease of Paying Taxes Act flyer
- BIR: RR 8-2018 digest (8% option)
- BIR: RMC 69-2023 (percentage tax back to 3%)
- BIR: RMC 3-2023 (books of accounts via ORUS)
- BIR: RMC 98-2026 (electronic invoicing)
- BIR: RMC 99-2026 (registration seal for online businesses)
- BIR: RR 21-2025 digest (20% tax on deposit interest)
- BIR: ePayment channels
Fees, limits and platform rules change. The date at the top shows when this guide was last updated, and the sources section links to the official pages it relies on. If something has changed, tell us and we will correct it.