Freelancer Tax Philippines: 8% vs Graduated Rate

Published: 2026-05-01 · Updated: 2026-05-12 · SuweldoKo

Should freelancers choose 8% or graduated tax in the Philippines?

Freelancers with annual gross receipts below PHP 3,000,000 may choose the 8% flat tax on gross receipts minus PHP 250,000 exemption. This is simpler and often lower than the graduated rate for incomes between PHP 250,000 and PHP 720,000 annually. Above PHP 720,000, compare both options before choosing.

8% Flat Tax vs Graduated Rate Comparison

The following figures use the correct 2023-onwards TRAIN Law graduated brackets. These are the same rates used in the SuweldoKo calculator.

Annual Gross Receipts	8% Flat Tax	Graduated Tax (TRAIN 2023+)	Better Option
PHP 300,000	PHP 4,000	PHP 7,500	8% Flat
PHP 500,000	PHP 20,000	PHP 42,500	8% Flat
PHP 800,000	PHP 44,000	PHP 102,500	8% Flat
PHP 1,500,000	PHP 100,000	PHP 277,500	8% Flat
PHP 3,000,000+	Not eligible (exceeds PHP 3M VAT threshold)	Graduated applies	Graduated only

Note: Graduated tax figures assume no deductible expenses. Actual tax may be lower if the freelancer deducts allowable business expenses under the Optional Standard Deduction (OSD) or itemized deductions.

How to Compute 8% Tax

Formula: (Annual Gross Receipts − PHP 250,000) × 8%. Example: PHP 600,000 − PHP 250,000 = PHP 350,000 × 8% = PHP 28,000 annual tax. Monthly: PHP 28,000 ÷ 12 = PHP 2,333.

VAT Threshold

Freelancers with annual gross receipts exceeding PHP 3,000,000 must register for VAT and can no longer use the 8% option. They must use the graduated income tax rates.

Common Questions

Mga Karaniwang Tanong

Should freelancers choose 8% or graduated tax in the Philippines?▾

The 8% flat tax is simpler and often lower for annual incomes between PHP 250,000 and PHP 720,000. For higher incomes, compare both rates. The 8% option is only available if annual gross receipts do not exceed PHP 3,000,000.

What is the 8% income tax option for freelancers?▾

The 8% option allows self-employed individuals and professionals to pay 8% of gross receipts minus PHP 250,000 annual exemption, instead of the graduated income tax rates. It also replaces the 3% percentage tax.

Do freelancers pay SSS, PhilHealth, and Pag-IBIG?▾

Freelancers are not mandated to pay SSS, PhilHealth, and Pag-IBIG but may register as voluntary members to access benefits. Voluntary contributions are deductible from gross income when computing tax under the graduated rate.

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