When does income tax start?
Under the graduated individual income-tax table, annual taxable income up to ₱250,000 has a 0% rate. Above that, progressive bands apply. Taxable income is not automatically your sales, platform balance or bank deposits.
Employee, freelancer or seller?
An employee’s pay and an independent business’s income follow different rules. If you have both a salary and freelance income, treat that as a mixed-income situation when checking your obligations.
What about the 8% option?
Eligible self-employed individuals may elect an 8% regime instead of graduated income tax and the applicable percentage tax. Eligibility and timely election matter, it is not automatic. For purely self-employed eligible taxpayers, the calculation allows a ₱250,000 reduction in the relevant gross-income base. Mixed-income earners do not get that additional reduction against business income under the 8% option.
BIR rules on individual income tax and the 8% option
Does earning less than ₱250,000 mean no paperwork?
No. A zero income-tax result does not by itself remove business registration, invoicing or filing obligations. Check your taxpayer category and registration with BIR when you start earning independently.
Keep fees and withholding separate
Save invoices, platform statements, withdrawal records and any withholding certificates. A platform commission pays for a service, tax withheld is a separate item. Do not assume a deduction means all your tax has been settled.
Use the right calculator
Our annual income-tax calculator applies the graduated table to taxable income you supply. It does not calculate the 8% option, select deductions, apply tax credits or calculate VAT and percentage tax. For an individual filing decision, confirm your situation with BIR or a Philippine tax professional.