8% vs Graduated Income Tax (Philippines)
Which tax option saves a PH freelancer more?
Self-employed Filipinos and professionals can choose between a flat 8% tax on gross receipts (over ₱250,000) or the graduated income-tax rates. Enter your numbers in both calculators below to see which option costs you less for your income level.
8% flat tax
8% of gross receipts over ₱250,000, in lieu of graduated + percentage tax.
The 8% option is only available if annual gross is ≤ ₱3,000,000 (the VAT threshold) and you elect it. It replaces the graduated income tax and the 3% percentage tax. Verify with the BIR.
Open the full toolGraduated income tax
The TRAIN graduated brackets applied to taxable income.
Which should you choose?
As a rule of thumb, the 8% option tends to win at lower-to-mid incomes and when you have few deductible expenses, because it skips the 3% percentage tax and uses a flat rate. The graduated rates can become better at higher incomes or when large allowable business expenses pull your taxable income well below your gross. Always run your real figures — and remember the 8% option is only available if your gross receipts stay within the ₱3M VAT threshold.
Estimates only — verify with the relevant agency or a professional.