Freelance Hourly Rate

The 8% flat tax (Section 24[A][2][b], NIRC) applies to your gross income over ₱250K and replaces both income tax and the 3% percentage tax. You can elect it if your annual gross is ≤₱3M. The graduated regime uses the regular 0–35% brackets on net income (gross minus actual business expenses) plus a separate 3% percentage tax on gross. Books and BIR registration are required for both, but graduated needs more detailed expense documentation.

8% wins when your actual business expenses are under ~30% of gross income — simpler, less paperwork, no separate percentage tax. Graduated wins when your real deductible expenses are high (gear-heavy work like videography, large internet/electricity bills, software subscriptions). Run both regimes in this tool and pick the one with the higher net take-home.

Yes — both regimes give you the ₱250K tax-free threshold. Under 8%, the deduction is the first ₱250K of gross. Under graduated, the first ₱250K of taxable income (after expenses and contributions) is in the 0% bracket. Below ₱250K total, you owe zero income tax in either regime.

Anything 'ordinary and necessary' to earn your income — gear, software licenses, internet, electricity (business portion), training, depreciation, coworking, professional fees, transportation for client meetings. Personal expenses don't qualify. Keep receipts; BIR can audit up to 3 years back.

PhilHealth is mandatory for all citizens (RA 11223 UHC). SSS and Pag-IBIG are voluntary for self-employed but recommended — they're cheap relative to the benefits (sickness, maternity, salary loan eligibility, MP2 dividend). For the graduated regime, voluntary contributions are deductible from gross. For 8%, they're not — the 8% deduction already replaces all of that.

If your annual gross exceeds ₱3M, you must register for VAT (12%) and charge it to clients on top of your fees. Below ₱3M, you're VAT-exempt and pay the 3% percentage tax instead (which the 8% regime also replaces). This tool doesn't model the VAT scenario — once you cross ₱3M, talk to an accountant.

Reasonable for healthy freelance work: 2 weeks vacation/holidays, plus you usually have a few low-income weeks even if not 'off.' If you take more breaks or work cyclically, use 45 or 48. Don't use 52 unless you literally work every week — your effective hourly rate gets misleadingly low.

Yes, under graduated. It's filed quarterly via BIR Form 2551Q (1% during 2020–2023 under CREATE; back to 3% starting 2024). The 8% regime explicitly includes percentage tax — that's why the 8% sometimes wins even when expenses are high.

No. All math runs in your browser. We don't store, log, or transmit your income figures.