Working at Home

Your Home Base

By now, you may have decided to start freelancing. You’ve found the niche you want to work in, and either you see yourself managing a full-blown business or accepting clients on a per-project basis. It could get inconvenient to do your stuff in your workplace or a coffee shop all the time, so a good thing to consider is to work at home.

The Perks of Working at Home

Having your own workplace at home is advantageous in a lot of ways.

  1. Working at home can make you more productive. With all of your resources close by, you can concentrate on the tasks at hand and maintain your momentum. You get less of the distractions present in regular offices. It also feels good when you work in a place where you’re most comfortable.
  2. Apart from commuting to your regular job (if you have one), you don’t need to travel often. That saves you time wasted mostly on traffic, gasoline, and fare, relieving you from a lot of stress.
  3. Working at home can be healthy. That means less work-related stress plus more time to rest and exercise.
  4. Working at home helps you achieve a work-life balance. You have plenty of time to work, even at your own pace. With a flexible schedule, you can spend more quality time for yourself and your family. That includes finishing chores, studying, playing with your children and/or pets, and accomplishing personal tasks that you can’t make time for as a regular employee.
  5. Working at home can give you a sense of independence. By learning to balance your time, set goals, budget your expenses, and maintain discipline, you can make your home-based job a successful and profitable venture.

Setting Up Your Workspace

Having a home office simply means you will need a place that’s favorable for working at home. With this goal in mind, set up your workspace at home in a way that you can utilize every resource you have to your advantage.

Identify Your Work Area

Pick an infrequently used part of your house, where you can easily move around. Make sure it’s well-lit and ventilated. You may want a workplace with a good view, like a window view, but ensure that it is less prone to distractions such as environmental noise.

Once you have a space to work on, pick a suitable desk where you can work at ease. You’ll also need a comfortable chair, as well as added space for your tools and paperwork. If you have the budget, you may want to get space-saving furniture, like DIY shelves and double-duty file cabinets. The key is to install office furniture that provides functionality, ease, and comfort.

But what if I want to work in my bedroom?” you may ask. The same principle of functionality, ease, and comfort applies here. Just don’t get tempted to plop into bed every now and then, unless you’re disciplined enough to work where you’re most comfortable.

One other thing: keep your wires out of the way when you can. Plan this way ahead while setting up your furniture. Badly installed wires can cause fires.

Tools of the Trade

Once you know what equipment you have and need, make some space in your workplace to keep them safe from the elements. Your computer must be set up in a manner where you don’t feel cramped.

Your basic tools as a freelancer are your computer/laptop, a telephone (if applicable), and internet connection. Later on, you may decide to get a printer or scanner. If your job requires chatting online, invest in a video camera and headset. If you work with pictures or graphics, a camera and some art tools or software will be useful. Think of what services you are offering, and what tools will make your job easier. Save and invest in them as you go along.

Organize Your Files

The next thing you need to do is organize your papers. If you registered with the BIR, you may already have your Certificate of Registration, also known as the BIR Form 2303, among others. Keep your books of accounts on a dedicated shelf. You will need to look at them periodically, especially now that you are required to pay income taxes. To prove that you’re a bonafide taxpayer, display your Form 2303 and your Ask Your Receipt Notice in a conspicuous part of your home.

Other business-related documents you may have on hand are client profiles, email and letter templates, proposals, directories, and other legal papers. File everything related to your services in one cabinet, your clients’ papers on another, and other materials and references in a shelf or two.

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Design Your Office

Aesthetics will help your productivity at home. Here are some basic ways to do this:

  1. Assign a space for everything — your equipment, files, etc. — in a way that flows best for the way you work.
  2. Make sure you’ve got lots of storage and keep the room free from clutter (even organized messes can silently stress the mind).
  3. Showcase objects that interest you like books and and souvenirs so that you can continually inspire yourself throughout the day (If you have clients coming over, your literary choices may pique their interest on you.)
  4. If you can, paint your workspace with a color that helps induce productivity or a state of relaxation.

The key to an organized workplace is not only to maximize its functions, but also to make your surroundings pleasing to work in and visit.

Working at home has a lot of perks. Your home office will be the first step to making a giant step for your freelancing career, so establish it according to your needs and preferences.



Fantastic Freelance Jobs and Where to Find Them

Freelancing is not only a way to earn extra income and experience, it also serves as an alternative way to start a business. Some home-based businesses start as freelance work, which eventually gain their own following eventually becoming their own brand. Otherwise, you can stick to what you’re good at because clients will keep coming if they want what you’ve got to offer.

It helps that companies nowadays recognize the need to outsource work, leading to the trend of hiring freelancers. This is why freelancing has become competitive and lucrative as a business or career.

Raking in the Big Bucks

Filipinos are said to be among the most active freelancers worldwide. They take jobs in some of the top industry niches, such as virtual assistants, design and multimedia, and content. Working as General Virtual Assistants is the most popular niche among Filipinos, followed by content writing and strategy, digital marketing, web development, and customer support.

But how much do freelancers actually earn?

While jobs for General Virtual Assistants are aplenty, a survey by showed that content editing and strategy is the highest paying job category, at an hourly rate of $6 to $15 per hour. That’s up to $2,400 (or about P120,000, as per the current exchange rates) on average monthly.

Project managers and web developers, next on the list of high-earning jobs, both earn up to $1,920 (P97,000) on average monthly. The difference is that web developers charge $6 to $12 (around P300-P600) per hour, while project managers charge a minimum of $9 (around P450). General Virtual Assistants, on the other hand, earn $3 to $8 per hour, or a monthly average of $480 to $1,280 (P24,000 to almost P65,000).

Content/article writers are also popular, but they earn the least. They get paid a fixed rate between $9 and $25 per 500-word article (around P450 to P1,200). SEO specialists, while also paid fixed rates, get below $1,000 monthly (around P50,000) per client.

Other freelancing jobs that are becoming popular despite their moderate, varied rates are social media managers, application developers, recruiting managers, transcriptionists.

What’s assuring about freelance jobs is that their rates will probably go higher in the years to come. That’s because there are other factors considered in setting rates, such as the location of the freelancer, expertise, length of experience in a particular field, and even inflation rates and the demand.

A Guide to Start or Boost my Freelancing Career

Websites for Freelancers

Freelancers who can’t get direct referrals turn to job portals for work. Job portals not only post regular job openings, but they also offer online jobs. Some of these websites have become havens for freelancers. Here are some of the popular websites for freelance work.

Upwork (

– Upwork is one of the major sources of online jobs around the world. Among the most sought after jobs here are web developers, virtual assistants, writers, and consultants.

Freelancer (

– Another popular website, Freelancer caters to businesses and freelancers in the field of website IT and software, mobile applications, and design. It also hosts contests launched by businesses looking for creative ideas through crowdsourcing.

Toptal (

– Toptal claims to hire the “top 3% of freelance talent”, or the top software developers, designers, programmers, and finance experts in the world. It also boasts of an international clientele consisting of top brands, enterprise, and startup clients.

MyOutDesk ( – virtual assistant jobs PH

– MyOutDesk offers part-time and full-time jobs for real estate virtual assistants in the Philippines. Hired applicants are said to earn a guaranteed $500 to $800 a month. They also offer trainings to qualified applicants.

RareJob (

– RareJob, an online English school, offers openings for freelancers who would like to become ESL tutors. Selected tutors teach English to Japanese students via Skype.

Not to be confused with RareJobs (, which is under the same company but offers office-based jobs related to ESL.

99Designs (

– Calling itself the world’s largest graphic design marketplace, 99Designs connects businesses looking for logos, web and app design, and other design templates. Thousands of Filipino designers to date are part of 99Designs, and the Philippines is one of the website’s top designer communities. (

– A job search site with a local twist, makes use of the Filipino social dynamics of giving referrals for a particular job. It also acts as a third-party to bridge clients and freelancers. The site currently has over 38,000 freelancers and clients working together, as well as thousands of unique inquiries for jobs. (

– Another website catering to Filipino freelancers, opens the market for virtual assistants and employees. Freelancers can earn a minimum of $300 to $350 a month (that’s full-time).

If you’re new to freelancing, you need to take a job that matches your skills and pays good money for them. Knowing the right job for you and the right place to find it will help you go a long way.

The Process of Registering as a Freelancer

There’s an idea out there that freelancers don’t need to pay taxes or register their businesses. While there are freelancers who intentionally evade these responsibilities, many don’t actually know what they’re supposed to do.

According to Section 74 of the National Internal Revenue Code of 1997 an individual receiving income within or outside the Philippines is required to pay taxes.

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You are considered as self-employed if you are:

  • A sole proprietor who owns a small or home-based business;
  • A professional who practices a profession, even without being affiliated with a company; or
  • Anyone who “(pursues) an art and make their living therefrom,” including writers, athletes, and others.

The Bureau of Internal Revenue classifies freelancers and home-based service providers as self-employed workers.

Here is a summary of the registration process you need to undergo with the BIR:

  • Gather the necessary BIR forms (online or offline), along with your documentary requirements.
  • Submit your requirements to the BIR RDO (Revenue District Office) that your business address is under.
  • Obtain copies of your official receipts (or sales invoices, if applicable) through a BIR-accredited printer.
  • Submit your books of accounts for registration along with the corresponding BIR form.

Requirements for Registering a Freelance Business

Prepare these documents before you start your registration.

  • NSO Birth Certificate or any documents showing your full name, address, and birth date;
  • Mayor’s Permit, if applicable;
  • DTI Certificate of Business Name, if applicable;
  • Professional Regulation Commission ID, if applicable; and
  • Payment of Professional Tax Receipt (PTR) from the local government, if applicable
    NOTE: Ask your RDO for possible conditions when submitting your PTR payment. Some cities don’t require this. Others may ask you to submit this personally, or you may be allowed to have an authorized party do so for you.

Just to be safe, prepare these beforehand:

  • Photocopy of your birth certificate
  • Photocopy of your marriage certificate (if married) and the birth certificate/s of your dependents, if you have any
  • Photocopy of proof of address
  • Photocopy of ID with name, birth date, and signature

Submitting your Registration Requirements

Once you have these documents, here’s what you’ll need to do:

  • Accomplish two copies of BIR Form 1901 (for individuals) and submit it along with the required attachments to the RDO that has jurisdiction over your business’ address. If you already have a Tax Identification Number (TIN), this makes your application easier. NOTE: The BIR has a directory to help you find which RDO your business will be under (). You may also call the BIR Trunkline at 981-7000 to confirm your RDO address.
  • Pay the registration fee of P500.00 using BIR Form 0605 (Payment Form) to any Authorized Agent Bank located within the RDO. Prepare one original and two photocopies of this form.
  • Pay P 15.00 for the Certification Fee and P15.00 for the Documentary Stamp Tax.
  • Attend a taxpayer’s briefing at your RDO. This is where you will learn your rights and responsibilities as a taxpayer.
  • At this point, if you’ve submitted all of your requirements, you will be issued your TIN (in case you don’t have one), the BIR Certificate of Registration (COR or Form 2303), and an “Ask for a Receipt” Notice (ARN). The COR will reflect the returns that must be filed and the taxes to be paid, so keep it close by.

You may opt to accomplish your BIR forms using the Offline eBIRForms Package instead of manually filling them up. You can encode, edit, and validate your details online. Print them out and submit along with a confirmation email when you pay your fees. Once you’ve paid everything, you can submit the printed forms to your RDO.

Be careful when attempting to apply for a TIN online. If you’re freelancing, you will need to go to BIR’s eRegistration system, which is for single proprietors and mixed income earners. If you’re an employee, don’t do it. Application of new TINs online can only be done by employers.

Receipts and Bookkeeping

Once you become a registered professional, you’ll need to have your own sales invoices or official receipts (OR) printed. The BIR has a strict policy regarding receipts. It would be best to work on getting your receipts on the same day you’re processing your registration.

You may sometime hear the terms “receipts” and “invoices” interchangeably. Don’t get confused. If you’re selling goods, you are expected to issue invoices. If you’re offering services, you must issue ORs. So if you’re a freelancer who offers services, you need to get ORs.

How to register for an OR

  1. Fill up 3 copies of BIR Form 1906, or Authority to Print (ATP) Official Receipts, Invoices, and other Commercial Invoices. Also, bring a copy of your BIR Certificate of Registration (COR) or BIR Form 2303 and 0605.
  2. Submit your requirements to your RDO. You may have to wait up to two weeks for your ATP to be released.
  3. Submit your ATP to an accredited BIR printer.
  4. Wait for at least 10 to 15 working days for the release of your receipts.

Take note of the following when you issue receipts:

  • Receipts are serially numbered.
  • The receipt should show the professional’s name, business style, TIN, and business address. You may choose to add a logo or other customizations, but adding these will require approval and take more time printing.
  • The receipt should be issued during every transaction. The client will receive the original copy, and you will keep a duplicate (or a triplicate if you’re running a huge operation). Your receipts will be preserved for 3 years from the close of the taxable year. You may use carbon paper to help you make copies of your receipts. Or if you can spare a few extra pesos, you may opt to get a carbonized copy. This will save you the effort of stocking up on carbon paper and rewriting details again.
  • You may also need to issue a billing statement. A billing statement is issued when you bill a client for services, after which you issue an OR once you’re paid. Some clients specifically request for billing statements while some don’t. If you are unsure if you’ll need a billing statement, it’s always best to get one so you don’t have to worry about the downtime brought by updating your ATP and printing out receipts.
  • If your business sells goods, you will need to issue a collection receipt. This is given to the client when receiving payment after delivery of goods.

Registering your Books of Accounts

The BIR also requires you as a professional to maintain books of accounts. These could be managed by any acceptable method of accounting (accrual or cash basis) in a consistent manner. Like your receipts, these will be preserved for 3 years from the close of the taxable year for post audit examination. Take time to have them processed along with your registration and receipts.

  1. Submit a copy of BIR Form 1901.
  2. Bring your books of accounts (journal/ledger/subsidiary professional income book and subsidiary purchases/expenses book) and have them stamped by the same RDO.
  3. Pay P15.00 for the Documentary Stamp.

The business registration process is a tedious task, but once you accomplish everything, you can present yourself more confidently to clients as an honest-to-goodness business.

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Why Being a Registered Freelancer is Good for You

Freelancing holds vast opportunities for career growth, networking, and financial stability. Employees, homemakers, and even unemployed people have turned to freelancing to earn extra income and explore the possibilities of their career paths.

Apart from the opportunities that it presents, people enjoy various benefits from working freelance.

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Benefits of Freelancing

  1. Increasing demand

    Companies nowadays recognize the need to outsource talents. Sometimes, new positions are being created to accommodate freelancers. This is a great opportunity for those with specialties, or those branching out from their regular careers. Popular positions are in the fields of web development, administrative work, content, and customer support.

    Taking advantage of the rising demand for freelancers leads to more earnings and opportunities for growth.

  2. Flexibility and time management

    As a freelancer, you are your own boss. You may choose where to work, whether at home, coffee shop, or your own office. You can also work on weekends, after your regular work shift, or any other convenient time.

    You can also manage your time according to what works best for you. That includes scheduling your interaction with clients, preparing materials, presenting your output, and enjoying the fruits of your labor.

  3. Control over work pace

    Aside from being able to work any time, you can control how much work you can put in. If you’re a full-time freelancer, you can use your time to your advantage and accept as many projects as you can.

  4. Higher income

    The prospect of earning in dollars is enough to draw in freelancers, but in general, freelancing augments your current salary, or gives you a new source of income. Some employers pay good rates, but if you have the experience and expertise to show for it, you can name your price or negotiate.

  5. More personal quality time

    Since you work at your own pace and setting, that leaves you more time to enjoy the things you want. You can do household chores, study, spend more time with your family and friends, travel, or take care of yourself (like getting a check-up). Just remember to manage your time well in case you decide to squeeze in a job or two while you’re at ease.

Freelancing already has a lot of personal benefits, but more can be gained when you register yourself with the Bureau of Internal Revenue (BIR). Believe it or not, registering with the BIR is expected of every earning individual or company. The sole purpose for this is to ensure that you pay your taxes.

You may register as a sole proprietor, if your freelance work involves a small or home-based business, or as an independent professional, if you provide services without being affiliated with any company. Either way, you gain various advantages when you are recognized as a tax-paying freelancer.

Benefits of Registering as a Freelancer

  1. A sense of legitimacy

    When you’re registered with the BIR and you issue official receipts with your name on it, clients will feel more confident that they’re obtaining the services of a legitimate business. Recognition as a registered business also helps you get your name across.

  2. Tax payments as proof of earnings

    Your annual income tax return (BIR Form 1701) serves as your proof of earnings. Keep your papers close and present them when applying for loans from banks, SSS, and other lending companies. You can also use it when applying for credit cards.

  3. Avoiding penalties

    Paying taxes may be tedious, but in the long run it will help keep your business or income generation secure. As long as you pay your taxes on time, you can avoid penalties and surcharges.

  4. Avoiding charges of tax evasion

    The ultimate fear of businesses, tax evasion is punishable by law. Section 74 of the National Internal Revenue Code of 1997 simply states that as long as you render services and earn from them, you need to pay the corresponding taxes.

    As a taxpayer, you are expected to settle your quarterly and annual income tax, business taxes, and local tax requirements. When you register, the BIR will brief you on your duties, so pay attention.

  5. Fulfilling your moral and ethical obligations

    Registering helps you sleep better at night, knowing you have fulfilled your duties as a worker, an upright business provider, and a citizen of the Philippines.

Whether as a professional or a small-time businessman, registering has advantages that further boost your work and your brand, and the benefits gained as a freelancer.
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Things to Know About Freelancing

Basic Facts and Ideas about Freelancing

For some time, freelancing became the buzzword for those who seek greater work opportunities and extra income. For employees, this provides them flexibility in the workplace, and a way to upgrade their skill sets. Homemakers and even the unemployed also turn to freelancing and make use of their knowledge and free time to earning money.

However, nowadays freelancing has become a legitimate and stable business, especially for those who pursue this venture full-time. This is mainly because it functions indeed as a business, if not a career connected to their expertise.

Freelancers generally take job orders online through international freelancing sites like Upwork,, and local ones like Experienced freelancers either interact directly or are sought after by clients. Other job sources are professional networking sites, referrals, and headhunters. Even social media such as Facebook post ads or job offers for prospective freelancers.

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Freelancing Means Hard Work

There’s a misconception that freelancing is for lazy or socially awkward people. Some may also say that freelancing is for those with limited career choices. That is not so, especially in the Philippines.

Freelancing websites claim to have over a million registered Filipino users working on different fields. A survey by says that as of 2016, the population of freelancers comprises of predominantly female users, aged 25 to 34 years old, and in Metro Manila. Working as a General Virtual Assistant, it adds, is the most popular niche among freelancers. Other top specializations are content writing and strategy, digital marketing, web development, and customer support.

Learning and upgrading skills lead to more job offers, and thus more income. Simply put, freelancing offers an opportunity for career growth, as long as you are willing to learn even the basics.

Freelancers generally charge based on their location, expertise, and length of experience. That said, freelancers in the Philippines charge the lowest hourly rate so far at $11.72, compared to those in Great Britain who charge $46.54 per hour. The US, in comparison, has an average rate of $37.87.

In the local setting, freelancers work on average for 32 hours a week, and in turn, earn P39,000 a month. Some earn as much as P100,000 or more, but this may mean they charge higher rates rather than work longer hours. More seasoned freelancers tend to do both.

Hubstaff says developers make up the largest number of freelancers worldwide. Other top niches are design and multimedia, administrative jobs like data entry and virtual assistants, and writing. In these specializations, Filipino freelancers are among the most active talents in the international workplace.

Freelancing is a Commitment

Yet another common misconception about freelancing is that it’s easy and stress-free. It’s partly true that all you need is a suitable computer or laptop, and a stable internet connection, and you’re set. Even so, working freelance needs as much discipline and effort as a regular job.

Freelancers who hope for easy money will be disappointed. Becoming a freelancer is no different from setting up your own business, especially once you start accepting regular jobs. That means managing your finances, planning your activities, and upgrading your services, all the while improving your own skills and spending personal time.

Apart from the rigors of ensuring quality service, you have to play the part of the businessman in paper too. You will need to show proof that you are a legitimate service provider, such as issuing receipts, showing permits, and paying taxes.

One misconception about freelancing as a business is that online freelancing sites engage in digital arbitrage, meaning they enable employers to avail of cheap labor. This may seem the case, considering how low Filipino freelancers seem to charge on average. Add the fact that freelancing sites deduct from a freelancer’s fees for acting as middlemen.

However, while freelancing sites help employers get services at minimal cost, they also ensure that freelancers get the best rates possible, depending on one’s skills. As mentioned earlier, freelancers charge based on their location and forte, and some even consider cost of living in their rates. It all boils down to the quality and quantity of work you offer.

At the end of the day, freelancing is a competitive and rewarding career option. This will help boost career growth, improve your competencies, and provide an ample income stream at your own pace.

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[Podcast] Minding Your Business Episode 5: Freelancing Versus Other Jobs


During the last episode of Minding your Business, Danella and Cristina talked about why freelance? We have learned how Miguel was able to pursue his passion in photography by being a freelancer. Today, we will have another guest to share with us his own story when it comes to freelancing. This week’s episode is all about freelancing versus other kinds of jobs.

Excited to know more of what’s in store for you if you freelance?

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Danella and Cristina invited Christian San Jose, currently the managing director of Make Technology, to share his journey when it comes to freelancing and what makes freelancing different from other types of jobs.


Christian started freelancing when he was still school, around 13 years old. When he was a kid, he stumbled upon Photoshop and played around it. Also, being a basketball fanatic, he started designing basketball wallpapers which led him to design the websites of actual basketball players for free. As a 16-year-old, he does not know how to properly charge his skills so he started freelancing for free. Later on, he realized that this hobby can turn into something worth the money. He started building his own portfolio and clients started contacting him, wanting him to design for their business. As a teenager, he didn’t foresee himself that this is going to be his future.

Being a freelancer, Christian realized he was able to improve his skills in communicating, most especially because he is meeting clients virtually, which is a bit challenging. He also said that he basically relied on his gut when it comes to trusting his clients. Because most of his first clients are foreigners, it requires great trust from the both of them and he mainly relied on his gut for it. That is something he learned from freelancing that is applicable to what he is doing right now.


During his freelancing career, he was not able to have a mentor that he can look up to. He realized that learning from his own is hard for him since there’s no one who can assess his actions when it comes to freelancing. There is no formal learning and there is not enough information that can guide him through his career. Christian also emphasized that he mainly based everything on experience, from mistakes. It’s a painful learning experience but he was able to surpass that.


Christian realized that this could be something when people started commenting positively on his portfolio and are willing to pay for his services. He was able to know that you do not need to be a professional in order for you get paid. You just have to put yourself out there.


Christian shared their experience when they started designing the official website of Solaire where they experienced a bit of trouble prior to the deadline. Since it was their first big client, Christian’s team was very eager to get everything in place just in time for the deadline. However, a day before the deadline, their office experienced a total blackout and they have to rely on their cellular data to be able to continue working. At that time, cellular data are not that strong enough so they really had a hard time completing their work.

Another memorable experience they had with Solaire was when their website was hacked. They had to fix this problem right away and that was the first time it happened to them. Eventually, they were able to locate the hackers, it was in Indonesia and they had to block the whole country to fix the website. Good thing they were able to fix the problem in no time.

With that experience, he realized that there is a big responsibility with what they do. He believes that you have to fake it till you make it. It is committing to something, feeling you’re ready but not quite yet. And when the right time comes, you tend to over-deliver so that is actually making it. You just have to believe in yourself.


Christian emphasized that he liked the both of it. Being a freelancer has its own pros and cons like having your own time, your own schedule, choosing your own clients, however, sometimes it makes you realized you need to learn more beyond what you could do on your own. When it comes to managing the company, Christian reiterated that he needs to manage expectations so this makes it above him. It was a decision for him to learn a little more because he wanted to be something successful. After selling his company,, he transferred to an advertising agency where he believes there is so much learning experience from there.

Christian had an amazing experience, from stumbling upon Photoshop to being the managing director. He was able to experience a lot of things that made him what he is now. He wanted us to know to never stop learning as it can lead you to greater things.
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3 Signs You Need to Register Your Freelancing Work

Freelancing is a choice for a lot of young professionals nowadays. It is categorized primarily as being able to “work from anywhere” and with the possibility of having multiple clients or sources of income.

Here in the Philippines, the benefits of freelancing simply outweigh the cons. You don’t have to worry about a spending a lot of time in a long commute, deciding on what clothes to wear everyday, and many more.

A good number of freelancers start their freelancing careers without registering themselves as such (some don’t even know they have to, yikes!). However, this is not the ideal situation.

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If they start out employed, freelancers usually take on extra “gigs” as a way to increase their income. Eventually, if they enjoy it or become successful, they may leave their employers to pursue a full-time freelancing career.

When this happens, they are required to register their business. But then they get stuck. They panic. They don’t know what to do. So, before you get into this situation, find out if you need to register your freelancing work.

3 Signs You Need to Register Your Freelancing Work

1) Your clients are asking for a receipt

Corporations and organizations that follow the law usually have an accounting team that implements a strict policy on recording revenues and expenses. Understanding this concept will help you deal with this issue properly.

See, on the company’s side, you are part of their “expenses.” Meaning, they pay you to do something for them as oppose to them hiring their own.

As proof of their payment to you, they will ask you to issue an official receipt in the name of the company. Why? Because this is the only way they can claim your services as a valid expense. Let me explain that further.

The BIR, and consequently, audit firms will look for official receipts because they want to ensure that the expense is relevant to the business (e.g. graphic design for marketing collateral) and is not just made up to lower the tax due.

There have been cases where the BIR disallows certain expenses because they do not meet the requirements stated above. This affects the company in two ways:

  1. They end up paying a more taxes
  2. They have to pay the corresponding penalties on top of this for the mistake.

And, your clients don’t want this to happen to them. That is why they ask for official receipts.


2) You cannot pass your client’s or potential client’s accreditation process

Another instance where you need to register your freelancing work is when your client or potential client is asking for some documents that you cannot provide. Most of the time, this document is the BIR Certificate of Registration (COR) or BIR Form 0605.

It is the legal document that serves as the proof of your registration. In it, you can find your tax details, industry, tax types (very important for accounting), etc.

Some companies are known to have this accreditation process. It acts as an automatic filter and protection for them.

You won’t just hire anyone to work for you, right? You need to have their backgrounds checked, verify the info they submitted, etc.

That goes the same for going through the accreditation process. It helps them avoid the hassle in the future of you not performing your work and just taking their money, or them not being able to claim the money they paid you as a valid expense.

Whatever that reason is, going through the accreditation process is the only way to get them as a client. And you can’t do that without registering your business.

3) Your client is deducting withholding taxes

The other sign that you need to register your freelancing work is come payment time, you get less cash accompanied by a document called a Certificate of Creditable Withholding Tax, or BIR Form 2307.

For example, your original contract price was PhP100,000, but you only received PhP90,000 in cash and a 2307 with 10,000 worth indicated.

What does that mean? That 10,000 is actually your money but already paid on your behalf in advance to the government by your client. And you can use the 2307 as a deductible to your income tax due. 

So, if you have an income tax due of 20,000, you can subtract the 10,000 there, so you don’t have to pay the full amount.

Note that you can’t do this if you are not registered. You just have to accept that the cash you receive will always be less than your original contract amount because of this.

Being aware of these 3 signs can help you identify if it’s the right time to register your freelancing work. If it is, then you have to decide which structure is best for you. But if you are simply planning to make a career out of freelancing, I strongly suggest you do it right the first time by registering. You avoid all the headaches and complications in the future.

Do you have any questions? Feel free to ask in the comments below.
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Should I Register as an Independent Professional or Sole Proprietor?

Freelancing has been a viable option for individuals nowadays because of its numerous advantages compared to the usual office jobs.

However, there seems to be an issue regarding these self-employed professionals whether they are complying with the tax requirements in the country, as well as if they should accomplish the different requirements for business registration in the Philippines to ensure the legality of their source of income.

If you fall under this population of workers, here are everything you need to know about paying your taxes and registering your small business.

Section 236 (j) of the Tax Code

According to the Section 236 (j) of the Tax Code, any person, regardless if he’s natural or juridical, should make, render, or file a return, statement, or other documents, as required by the authority of the Internal Revenue Code.

A Taxpayer Identification Number (TIN) shall be obtained with the Bureau of Internal Revenue (BIR) for proper identification for tax purposes. The TIN, then, shall be indicated on the return, statement, or document that the individual wishes to file with the BIR.

Independent Professional vs.  Sole Proprietor

Sole Proprietor

There are three categories that businesses in the Philippines can be classified into—according to ownership structures, namely the sole proprietorship, partnership, and corporation.

But, we’ll only focus on sole proprietorship as this is the business type usually owned by a single individual (proprietor) such as a small or home-based business, where the proprietor has full control and authority over the entire company.

The proprietor owns all the assets of the company and is solely responsible for its liabilities. He also enjoys all its profits but endures losses of the business as well.

For the tax aspect, conversely, the proprietor and his proprietorship can be considered as one taxpayer—with a single TIN as well. Further, he should register with the Department of Trade and Industry for the proper trade name application.

Obtaining a Mayor’s Business Permit and registering with the Social Security System (SSS), PhilHealth, Pag-Ibig Fund, and other applicable government agencies are also necessary for sole proprietorships. Accounting services provided by professional bookkeepers can be tapped by small business owners, especially those not having any knowledge of the processes of business registration.

Independent Professional

If you don’t have any organization yet providing services to clients, your income is considered taxable, and thus, you need to register yourself as a self-employed, independent professional.

Unlike in sole proprietorship, registering with the DTI isn’t necessary since your full name would be used as your trade name and refer to your services.

However, paying your professional tax with the Mayor’s Office and registering with the BIR is necessary, as well as registering with the SSS, PhilHealth, and Pag-Ibig Fund.

On the other hand, filing for an income tax return isn’t required if your income is derived from interest on bank deposits and has been subjected to final withholding tax. Other circumstances, however, such as having a gross income that exceeds your total personal and additional exemptions would require filing for an income tax return with the BIR form 1701/1701Q.

Benefits of Registering

•  Obtaining loans from different financial institutions like banks, lending companies, and SSS, as well as applying for a credit card would be much easier as your annual income tax return (BIR form 1701) will serve as your proof of earnings.

•  Your credibility as an individual rendering services among your clients will increase through your BIR registration and official receipts under your name.

•  You’ll likely earn more in the long haul as you’re able to pay your taxes on time and avoid incurring penalties like interests and surcharges.

•  Tax evasion, which is punishable by lax, wouldn’t be possible.

Registering your business or yourself may seem to be a demanding and challenging task to accomplish. Then again, with the potential benefits that you can reap from it, as well as ensuring your professionality is important in complying with the law.

Just keep in mind all these tips, and you’re on your way to enjoying your chosen career path and having a stable source of income that can help you throughout.


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A Freelancer’s Guide to Paying Income Tax

Ah, tax paying! It can be a pain in the neck if not done properly. But you cannot avoid it because it is your duty as a citizen. So as a law-abiding Filipino, any individual (and/or entity) receiving income from sources within or outside the Philippines must file their due income tax.

If you are an employee, filing your income tax can be a breeze because you have the human resources department of your company to do that for you. But when you are a freelancer, you would have to do the filing yourself. Well, the term freelancer is wide-ranged and can pertain to self-employed individuals or people who are hired as an independent contractor but they are all categorized by BIR as sole proprietors.

Once you are registered as a sole-proprietor, the annual paying of your required tax return should be easy. We will help you understand about tax compliance and other taxes you are required to pay as a freelancer.

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Guide to Paying Income Tax

1.  Filing for Registration

As a freelancer, you must first be registered under BIR.

•  Fill out BIR Form 1901 and submit it with the required documentations noted on the form. You have to settle Php500 for the annual registration fee.

•  You will receive the BIR Form No. 0605 from the BIR accredited bank assigned to your location. This document must also be attached when you file the BIR Form 1901.

•  When filing this form, make sure you only check the tax types that are relevant to your line of work. This will save you from a lot of stress in paying unnecessary tax returns.

2.   Registration of Official Receipts and Accounting Books

It is also required that you register the official receipts that are issued to your customers/clients.

•  Even if you are a freelancer (especially when your work is mostly online), you must still provide an official receipt for every paid job order or you will be penalized with Php1,000 and might be charged with tax evasion.

•  You must also maintain a book of accounts listing all the financials of your freelancing business.

•  Transparency is required in encoding your financials so you must also take note of collections that were used for personal expenses.

•  Outsource a diligent bookkeeper to help you in your accounting. In case BIR examines your business, your books will reflect that you paid your taxes.

3.   Business Taxes (VAT and Percentage Tax) and Expanded Withholding Tax

Being in business, BIR requires you to pay business taxes regardless if you’re earning or not. It is important to remember that business tax is based from the gross receipts or sales and not on your net income.

•  Since 2012, businesses with gross receipts and sales that exceed Php1,919,500 are liable for 12% value added tax (VAT) while 3% percentage tax is required from your gross receipts if it doesn’t exceed that amount.

•  When paying for these business taxes, you must file BIR Form 2550M (VAT) and BIR Form 2551M (percentage tax) on the 20th and 25th month following the applicable month respectively. If you are VAT-registered, you must also provide a summary list of sales and purchases.

•  Expanded withholding tax is applied for certain expenses incurred such as rent, hiring an outsource person, commission or those listed under Revenue Regulations No. 2 to 98. This must be remitted to BIR monthly.

4.   Income Tax Filing and Payment

•  You must completely fill out BIR Form 1701 and 1701Q and pay the amount of the quarterly and annual income tax that were calculated from your taxable net income with 5%-32% rate based from the prescribed tax table by BIR.

•  Filing and payment of the quarterly income tax must be done on or before the 15th of the month after the end of the applicable quarter while the annual income tax must be filed on or before April 15 after the end of the applicable calendar year.

5.   Local Tax Requirement

Simply put, you will be required to have business permit and annual community tax certificates for your business legitimacy. If you do not comply with your location’s local tax requirements, then your business is not legal to operate and may be sanctioned accordingly.

For computation of the income tax that you should pay as a freelancer, this slide is a good reference.

We hope that this information will help guide you in becoming a good taxpayer. Understanding how to properly file and pay your required income tax is crucial for any freelancer. It will not only establish your legitimacy as a freelancer among your clients but it will also protect your business altogether.


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Are Pinoy Freelancers Required to Pay Income Tax?

While the employed Filipino has no choice but to pay taxes, most freelancers have been enjoying a tax-free income because they are not aware that they are required, while some do know it but they intentionally evade the obligation. What is the deal with freelancers and taxes, are they required to pay tax from their freelance income?

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Are Pinoy Freelancers Required to Pay Tax?

TAX. Ah yes, that three-letter word that instantly launches massive heated debates and arguments no thanks to the culture of corruption in the government. While the employed Filipino has no choice but to pay taxes, most freelancers have been enjoying a tax-free income because they are not aware that they are required, while some do know it but they intentionally evade the obligation. What is the deal with freelancers and taxes, are they required to pay tax from their freelance income?

The simple answer to that is, YES. Whether you’re a part-time or a fulltime freelancer, you are required to pay tax from your freelance income.

The Duty to Pay Taxes is in the Law

Income Tax is defined in the National Internal Revenue Code (NIRC) of the Philippines as “tax on all yearly profits arising from property, profession, trades or offices or as a tax on a person’s income, emoluments, profits and the like.”

Based on this definition, any payment received from services or products that arise from the practice of profession is taxable income. Freelancers generally earn from services coming from their practice of profession, they are required by law to file and pay income tax.

Freelancers Required to Pay Tax

There are various kinds of freelance work, and you might be wondering if your specific line of work is covered in the income tax law. As we have mentioned, part-time and full-time freelancers are required to pay tax. This includes online/offline freelance work as a graphic designer, copywriter/blogger, editor, SEO, and the like.

Online professionals might ask, how about if the payment comes from a client based abroad? Regardless of the source of income, it is still taxable by law.

Tax Evading Freelancers

If you’re a freelancer who doesn’t pay your taxes, then are you a tax evader? It looks a lot like it. A thief is still a thief regardless of the amount or value of the item that he stole, right?

If every freelancer in the country avoids fulfilling his tax obligation as a Filipino citizen, what do you think will happen? Sure, some freelancers don’t earn much but remember that our taxes make up the budget that the government uses for education, public health, infrastructure (hello MRT, please stop being a disappointment), etc.  We need to be law-abiding citizens, we need to pay our taxes, even if we don’t trust our government officials. If freelancers don’t pay their taxes, then isn’t that similar to government officials who think they’re above the law and exercise corruption?

Now that’s all cleared up, the next step is to learn how to file your income tax properly. Here’s A Freelancer’s Guide to Paying Income Tax.

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