How To Pay Taxes As A Freelancer In The Philippines

June 10, 2022

How can you pay taxes as a freelancer in the Philippines?

1. Step 1: Register with the Bureau of Internal Revenue
2. Step 2: Pay The Registration Fee, Certification Free, and Documentary Stamp Tax
3. Step 3: Attend The Seminar At The RDO
4. Step 4: Claim Your Certificate of Registration
5. Step 5: Register Books Of Accounts
6. Step 6: File and Pay Taxes As A Freelancer On Time

With the rise of digitization, freelance work has become a common source of income for Filipinos. One of the top benefits of freelancing is that you have the freedom to choose your workload. You can focus on the projects that you want without the distractions of a full-time job like office politics. As a freelancer or self-employed individual, you are essentially running your own business. And just like any business, freelancing requires paying taxes. In this blog, we provide a step-by-step guide on how to pay taxes as a freelancer in the Philippines.

At your full-time job, you probably complain whenever you see tax deductions on your payslip. However, the advantage of having a full-time job is that your human resource ( HR) department settles all the tax obligations for you. Freelancing requires you to take care of the taxes yourself.

Freelance Tax in the Philippines

Contrary to what many believe, not all freelancers in the Philippines are exempted from paying taxes. As a freelancer in the Philippines, you are only exempted from paying taxes if you meet any of the following criteria:

1. If you are a minimum wage earner
2. If your gross income is below your Basic Personal Exemption (Php 50,000, regardless of marital status) and your Additional Personal Exemption (Php 25,000 per child dependent with a maximum of 4)
3. If your annual salary from your employer is Php 60,000 and below

If you meet any of these criterias, you are not required to pay taxes as a freelancer. If you need to pay taxes, this blog provides the various procedures when it comes to registration, filing, and payment of freelance tax in the Philippines. Continue reading to get started!

Step 1: Register with the Bureau of Internal Revenue

Freelancers in the Philippines need to register as a self-employed individual with the Bureau of Internal Revenue (BIR). Fill out the Application for Registration (BIR Form 1901) and submit it together with the required documents to your Revenue District Office (RDO).

If you already have a Tax Identification Number (TIN) as an employee, fill out the Application for Registration Information Update (BIR Form 1905).

You will to need to prepare and submit the following documents for the BIR registration:

• NSO Birth Certificate
• Fully accomplished BIR Form 1901
• BIR Form 0605 Payment Form
• TIN number
• Community tax certificate
• Certification from barangay captain

You may also be asked to submit the following requirements:

• A copy of mayor’s business permit
• Marriage contract
• ID with Professional Regulatory Commission (PRC)
• DTI certificate of business name
• Contract/company certification
• Occupational or Professional Tax Receipt (OTR/PTR)

Step 2: Pay The Registration Fee, Certification Free, and Documentary Stamp Tax

The entire BIR registration fee is Php 500.00. This is payable at any BIR office or any authorized bank within the RDO. Make sure you check what banks are accredited by your RDO for this payment.

Then, pay the Php 15.00 certification fee and the Php 15.00 documentary stamp tax. Take the form that will be given and attach it to your registration certificate later on.

Step 3: Attend The Seminar At The RDO

You will need to attend a seminar conducted by the RDO. During the seminar, you will be advised on your rights and duties as a taxpayer.

Step 4: Claim Your Certificate of Registration

The RDO will issue your Certificate of Registration (Form 2303), along with the “Ask for Receipt” notice, Authority to Form (BIR Form 1906), and Books of Accounts.

Step 5: Register Books Of Accounts

Afterward, you will need to register your books of accounts (subsidiary professional income book/subsidiary purchases/expenses books, journal/ledger) and have them stamped at the RDO.

Step 6: File and Pay Taxes As A Freelancer On Time

As a freelancer, it is your duty to file and pay taxes on time. Remember the following deadlines for paying freelance taxes in the Philippines:

• Monthly Percentage Tax- Paid every 20th of the month
• Quarterly Income Tax – Paid every 15th of April, August, and November
• Annual and Last Quarter Payment of Income Tax – Paid every April 15th
• Aside from these taxes, you also need to renew your COR every 30th of January. To learn how to calculate your freelance income taxes, visit this page.

Thanks to the Internet, filing taxes is now more convenient with the Electronic Filing and Payment System (eFPS). Payments can easily be made through Authorized Agent Banks as well.

Key Takeaway

This blog provides a step-by-step guide on how to pay taxes as a freelancer in the Philippines. Learn more about freelance tax in the Philippines by checking the BIR website.