Income tax · Free tool
Mixed Income Tax Calculator
Estimate your tax when you have a salary and freelance income at the same time.
Gross salary minus SSS/PhilHealth/Pag-IBIG employee shares and non-taxable 13th month and other benefits up to ₱90,000 — see your BIR Form 2316.
Also on your Form 2316. Leave blank if you don't know.
Everything your clients paid you for the year, before expenses.
Deductions if you choose graduated rates
40% of your business gross is deducted, no receipts needed for the deduction itself.
Enter your salary and freelance income to compare both options.
Numbers last checked October 19, 2026 · Income tax rates (8%, graduated, OSD, ₱3M threshold), Percentage tax (2551Q, 3%)
Your numbers stay in your browser. This is an estimate for information only, not tax advice.
Yes, mixed-income earners can use 8%
If you're an employee who also freelances, you're a mixed-income earner. Under Revenue Regulations 8-2018, which implements the TRAIN law, you can choose the 8% rate for your business income if your business gross receipts are ₱3,000,000 or less. Some guides say mixed-income earners are stuck with graduated rates. That's not the rule.
- 8% option: tax on your salary at graduated rates, plus 8% of your business gross receipts. The ₱250,000 deduction doesn't apply because your salary already uses the zero-tax bracket. No percentage tax.
- Graduated option: add your taxable salary and your business net income (after the 40% OSD or itemized expenses), apply the graduated table, then add 3% percentage tax on business gross receipts.
Worked example
You earn ₱600,000 in taxable compensation and ₱500,000 from freelancing, and your employer withheld ₱62,500.
- 8%: tax on ₱600,000 salary is ₱22,500 + 20% × ₱200,000 = ₱62,500. Add 8% × ₱500,000 = ₱40,000. Total ₱102,500, with ₱40,000 left to pay after withholding.
- Graduated + OSD: business taxable income is ₱500,000 − 40% = ₱300,000. Combined taxable income of ₱900,000 gives ₱102,500 + 25% × ₱100,000 = ₱127,500 income tax, plus 3% × ₱500,000 = ₱15,000 percentage tax. Total ₱142,500.
- In this case, 8% saves ₱40,000.
Filing reminders
Mixed-income earners file Form 1701 each year (not 1701A) and 1701Q each quarter for the business part. You choose 8% on your first-quarter return. If your business gross goes above ₱3,000,000 during the year, you move to graduated rates for that year and must register for VAT. Any 8% tax you already paid is credited.
Common questions
Can I use the 8% tax rate if I also have a full-time job?
Yes. Under RR 8-2018, mixed-income earners can choose 8% for their business or freelance income as long as business gross receipts and other non-operating income are ₱3,000,000 or less. Your salary is still taxed at graduated rates.
Why is there no ₱250,000 deduction on my freelance income?
The ₱250,000 zero-tax bracket is already applied to your compensation income in the graduated table. Mixed-income earners on 8% pay 8% on their full business gross receipts.
Which BIR forms do mixed-income earners file?
Quarterly Form 1701Q for the business income (May 15, August 15 and November 15), the annual Form 1701 on April 15 of the next year, and Form 2551Q for percentage tax each quarter if you are on graduated rates.
My employer already withheld tax. Why do I still owe?
Your employer only withholds tax on your salary as if it were your only income. Adding freelance income pushes you into higher brackets (graduated) or adds 8% on top, so the balance is paid when you file.
When do I choose the 8% option?
On your first-quarter 1701Q (or the first quarterly return after you register your business). If you don’t choose it, you are on graduated rates for the year, and the choice can’t be changed until the next year.
Based on: BIR (RR 8-2018) · TRAIN Law (RA 10963)