Quick answer
Freelancers register with the BIR as self-employed using Form 1901 through ORUS. Registration costs only the ₱30 documentary stamp tax since the ₱500 annual fee was abolished in 2024. If your gross receipts are ₱3 million or less, you can choose the 8% income tax on gross receipts above ₱250,000, which replaces both graduated income tax and the 3% percentage tax. On ₱600,000 a year, that's ₱28,000 in tax.
Key takeaways
- Register as self-employed/professional with BIR Form 1901 through ORUS or your RDO.
- 8% option: 8% × (gross receipts − ₱250,000), if gross receipts are ₱3 million or less and you're not VAT-registered.
- Elect the 8% option on your first quarterly return of the year (or at registration); otherwise you default to graduated rates plus 3% percentage tax.
- You must issue BIR-registered invoices, even to foreign clients, and keep books of accounts.
- Quarterly 1701Q returns are due May 15, Aug 15 and Nov 15; the annual 1701/1701A is due April 15.
On this page
Millions of Filipinos now earn as freelancers, virtual assistants and online professionals, many paid by foreign clients. Registering with the BIR used to be a pain point, but it's now mostly online, cheap, and with the 8% option, simple. Being registered also helps you get loans, visas and credit cards, which ask for an ITR.
Who needs to register?
You need to register as self-employed if you earn income from:
- freelance work (writing, design, development, VA work, tutoring) for local or foreign clients;
- professional practice (licensed or not);
- selling goods or services online or offline as a business.
If you'll work under your own name, you don't need DTI. Register with DTI first only if you'll use a business name. See how to register a business.
How to register through ORUS
- Create an ORUS account at orus.bir.gov.ph (or log in if you already got a TIN there).
- Choose registration as self-employed/professional (BIR Form 1901). If you already have a TIN from employment, use the same TIN and update your registration; never get a second one.
- Provide your valid ID, address, and line of business.
- Choose your tax type: elect the 8% income tax option if you qualify.
- Pay the ₱30 documentary stamp tax online.
- Receive your Certificate of Registration (Form 2303) electronically.
- Register your books of accounts (manual, loose-leaf or computerized).
- Get invoices: apply for an Authority to Print with a BIR-accredited printer, or use an approved electronic invoicing system.
The ₱500 annual registration fee no longer exists; it was abolished by the Ease of Paying Taxes Act in January 2024.
The 8% option vs graduated rates
You choose between:
Option A: 8% income tax - Tax = 8% × (gross receipts − ₱250,000) - Replaces both the graduated income tax and the 3% percentage tax - Available if gross receipts are ₱3 million or less and you're not VAT-registered - No need to track expenses for tax purposes
Option B: graduated rates + 3% percentage tax - Income tax on net income (gross − expenses, or gross × 60% if you use the 40% optional standard deduction) - Plus 3% percentage tax on gross receipts, filed quarterly
Example: ₱600,000 gross receipts, minimal expenses
| 8% option | Graduated + OSD (40%) | Graduated, no deductions | |
|---|---|---|---|
| Taxable base | ₱350,000 | ₱360,000 | ₱600,000 |
| Income tax | ₱28,000 | ₱16,500 | ₱62,500 |
| Percentage tax (3%) | — | ₱18,000 | ₱18,000 |
| Total | ₱28,000 | ₱34,500 | ₱80,500 |
More examples with the 8% option
| Annual gross receipts | Tax under 8% | Effective rate |
|---|---|---|
| ₱250,000 | ₱0 | 0% |
| ₱400,000 | ₱12,000 | 3.0% |
| ₱800,000 | ₱44,000 | 5.5% |
| ₱1,500,000 | ₱100,000 | 6.7% |
| ₱3,000,000 | ₱220,000 | 7.3% |
Graduated rates win only if your deductible expenses are a large share of your income and well documented.
Mixed-income earners
If you're employed and also freelance, your salary stays under graduated rates, and the 8% can apply to your freelance income without the ₱250,000 deduction.
How to elect the 8% option
Elect it at registration or on your first quarterly income tax return (1701Q) of the year. If you don't, you're automatically on graduated rates plus percentage tax for that year. The election is generally irrevocable for the taxable year.
Filing calendar (8% option)
| Return | Period | Deadline |
|---|---|---|
| 1701Q | Q1 (Jan–Mar) | May 15 |
| 1701Q | Q2 (Apr–Jun) | August 15 |
| 1701Q | Q3 (Jul–Sep) | November 15 |
| 1701A or 1701 | Annual | April 15 of the following year |
On graduated rates, you also file 2551Q (percentage tax) every quarter. File through eBIRForms or eFPS and pay via online banking or e-wallet channels the BIR accepts. Late filing costs a 25% surcharge, 12% annual interest, and compromise penalties.
Invoices and books
- Issue a BIR-registered invoice for every payment, including from foreign clients and platforms.
- Record income in your books of accounts as it's received.
- Keep records for at least the period required by the BIR, generally 5 years from filing or more for some records.
A simple routine: every time a payment lands in your PayPal, Payoneer, Wise or bank account, issue an invoice and log it.
Don't forget SSS and PhilHealth
As a self-employed person, you also need to register and contribute to SSS (15% of your declared MSC) and PhilHealth (5% of declared income), and you can join Pag-IBIG voluntarily. See the SSS table and PhilHealth rates.
Getting started as a freelancer?
Read how to become a virtual assistant and how to find legit work-from-home jobs.
Frequently asked questions
Do freelancers with foreign clients need to pay tax in the Philippines?
Yes. Resident citizens are taxed on income from all sources, including payments from foreign clients through Upwork, PayPal, Payoneer or Wise. Being paid from abroad doesn't exempt you.
Is the 8% tax always better for freelancers?
For most freelancers with low business expenses, yes. Graduated rates can win only if your deductible expenses are a large share of your gross income. If you don't keep detailed expense records, the 8% option is simpler and usually cheaper.
What if I'm employed and also freelancing?
You're a mixed-income earner. Your salary stays under the graduated rates (withheld by your employer), and you can elect 8% on your freelance income, but without the ₱250,000 deduction, because that's already used against your compensation.
How do I issue invoices to foreign clients?
Issue a BIR-registered invoice for each payment, whether printed (from a BIR-accredited printer) or electronic through an approved system. Keep a copy, even if the client never asks for it.
What penalties apply if I don't register?
Unregistered business activity, failure to file and failure to issue invoices carry surcharges (25%), interest (12% a year), and compromise penalties, and the BIR can assess back taxes for prior years. Registering late is still better than not registering.
Sources
Figures checked against these official and primary sources on October 4, 2026. Government rates and promos change, so confirm on the agency's site before you act.
- BIR Online Registration and Update System (ORUS)
- Republic Act No. 11976, Ease of Paying Taxes Act
- Republic Act No. 10963, TRAIN Law (8% optional income tax)
- Bureau of Internal Revenue: Tax forms and filing deadlines
General information, not personal financial, tax or legal advice. See our editorial standards and disclaimer. Found an outdated figure? Email support@success.ph.