It wasn’t too long ago when people akin the word ‘job’ to office work. But as the internet progressed, so did work setups.
Gone are the days where an individual’s only choice was to physically report to work. And while face to face jobs are still around today, many have turned to the gig economy for more flexibility and better work-life balance.
Today, we’re highlighting the gig economy for anyone who is currently in it, planning a career change, or has recently started. We’re zooming in on gig economy jobs as well as the tax rules that apply to help you comply with government regulations.
The Philippine Gig Economy: What it is and where we’re at
By definition, the gig economy is a labor market driven by temporary, flexible jobs. As the name implies, independent contractors or freelancers are hired per ‘gig’. Their rates and terms of work are typically bound by a contract or agreement with an employer.
The gig economy has seen massive growth throughout the years mostly due to lockdown measures brought by the COVID-19 pandemic. In fact, the number of gig workers reached 1.1 billion in 2020 alone.
The shift should come as no surprise. The everyday 9 to 5 office worker would naturally want to explore more flexible work opportunities. Not to mention, they’re looking at the freedom of setting their own wages, diversifying income, and perhaps most importantly, having no boss.
5 Popular Gig Economy Jobs in the Philippines
Filipinos have a diverse number of jobs to choose from in the gig economy. Some common jobs in the market include:
- Ridesharing or delivery drivers
Grab, Angkas, Joyride – there’s no shortage of ridesharing and delivery apps in the country.
If you successfully applied as a freelance driver on these platforms, you can start completing services for clients. Apps like Grab offer a variety of options, including restaurant delivery, carpooling, package delivery, and even groceries.
- Home or asset rentals
While the industry saw a decline during the pandemic, it looks as if asset rentals have begun to pick up again. You can register on AirBnB to rent out your properties. Or, you can offer other asset rentals like vans and equipment.
- Web design
Web design is one of the common jobs outsourced to the Philippines. And it’s no surprise, Filipinos have great work ethic, produce high quality work, and offer competitive rates.
Of course, you’ll need to be a professional to enter this field. So make sure you rake up that experience and grow your portfolio to be more competitive.
- Online marketing services
Online marketing services, including SEO or PPC specialists as well as Content or Blog Writers, are also commonly outsourced to the Philippines. Like Web Designers, you’ll also need a good background to compete with other freelancers in the market.
- Online tutoring services
The internet has made it easier than ever for people to connect. The best part is that you don’t necessarily have to manually source for clients, you can use apps like Fiverr, Upwork, and 51Talk to browse and connect with clients on their database.
Now, there are many, many jobs available in the gig economy today. Aside from the five mentioned, you can also explore options like handywork, construction, media production, and graphic design – whatever best suits your skills and passion!
BIR Tax Rules and Forms that apply to the Gig Economy
So, you might be on the fence about paying taxes as a freelancer. Apart from it being our civic duty, registering as a gig worker also:
- Legitimizes your practice/business
- Lets you issue receipts
- Updates your tax records when applying for a visa or bank loan.
BIR Registration for Gig Workers
Since the BIR classifies gig workers as self-employed taxpayers, you’ll need to secure your TIN or Taxpayer Identification Number.
Note that if you’re doing gig work part time, you’ll need to declare yourself as a mixed income owner to indicate that you’re earning as a full-time employee and as a self-employed individual.
When you’re done, accomplish Forms 1901 and 0605, and pay the annual registration fee. You’ll then be asked to attend the taxpayer’s seminar and initial briefing for new registrants. Don’t forget to attend this to understand your rights and responsibilities as a registered taxpayer!
From here, you can claim your Certificate of Registration or BIR Form 2303 and start processing receipts and invoices under BIR Form 1906.
BIR Forms for Gig Workers
The BIR forms you’ll need to accomplish as a gig worker will depend on your business setup.
As a writer, for example, you could be receiving payment as an individual. The same can be said for graphic designers, developers, and even delivery or rideshare drivers.
If this is the case, some of the most important tax forms to take note of are:
- BIR Form 1701 or your Annual Income Tax Return
- BIR Form 1701A (for individuals who availed of the 8% tax rate or optional standard deduction under the graduated tax rates)
- BIR Form 1701Q or your Quarterly Income Tax Return
- BIR Form 2551Q (for non-VAT earners)
In cases where you register a business to offer your service (for example: a photography studio), you’re classified as a sole proprietor.
We prepared a comprehensive guide of BIR forms for both freelancers and sole proprietors here.
Become a Gig Economy Worker while Staying on Top of Your Taxes
Consider this guide as a tip of the cherry when it comes to gig work. But don’t let that worry you, if there’s one pain point we can help alleviate, it’s your tax compliance!
With Taxumo, you stay on top of your tax filing responsibilities. Our web-based app has all the tools you need – including an automatic tax calculator, tax reminders and of course, you can also submit and pay your taxes directly to the BIR.
Try Taxumo for free today!