If you have mixed earnings or a side gig on top of your regular job, you might be wondering how you should file your taxes to bir.gov.ph.
Mixed income earners are simply those who receive income from several sources. This includes your employee salary, business earnings, or gross receipts from being a freelancer.
Under the new tax reform or TRAIN, mixed-income earners are subjected to these taxes:
All Income from Compensation
Your income as a salaried employee will be taxed according to the BIR Income Tax Table.
All Income from Business or Practice of Profession
Your earnings as an entrepreneur or freelancer will be taxed under the tax rate for self-employed and professionals.
This means that if you’re earning less than P250,000 annually, you are exempt from paying percentage tax and income tax. In short, you don’t have to file any tax returns.
On the other hand, if your earnings exceed P250,000, then you must settle your percentage tax and income tax.
Also, when your annual gross sales or receipts do not exceed the VAT threshold of P3 million, you have two options for filing your taxes. You can file for 8% of your gross sales/receipts, or the graduated personal income tax rates of 0% to 35% on net taxable income. The choice is totally up to you, but if you’re wondering which option is better, you can use our calculator.
Meanwhile, if your annual gross sales or receipts exceed the VAT threshold, you will have to file your taxes using the graduated income tax tables. You don’t have the option to choose the 8% rate.
All these new TRAIN regulations can be overwhelming, especially if you’re running a business while having a regular job. You already have so much on your plate, and taxes can add to your stress and even prevent you from focusing on things that matter most, like brainstorming with your team or spending time with your loved ones.
Luckily, there’s an online tool like Taxumo that can do the hard work for you. Just input your income and your expenses, and it will do the rest. Filing and paying your taxes has never been this hassle-free.
I’m both a compensation income earner and a part-time freelance photographer. Hindi pa po ako registered under BIR as a mixed-income earner however meron akong client na nagrerequire ng OR from me. Hindi naman po consistent yung pagkakaroon ko ng client na nagrerequire ng OR throughout an entire year but because of the client na meron ako ngayon, I’m considering to register under BIR for the sole purpose of issuing them an OR after the shoot. I just want to know what the repercussions are when registering under BIR for a case like mine. I’m just worried that I’ll have to continue paying monthly tax if hindi naman po guaranteed yung income ko sa pagfrefreelance ko. There are months where I don’t earn a single peso from freelancing and I wouldn’t want to pay the necessary taxes despite not earning any income. I also don’t earn more than 250,000php in a calendar year.
Is it possible na icancel ko yung BIR registration upon issuing them the OR and if so, is there a cancellation fee/penalty? If I choose to stick with the BIR registration, what are the monthly/quarterly/annual fees that I need to know about other than the income tax return?
I hope you could help me out on this. Thank you!
Hi, I’m in the same situation. Would you happen to have gotten an answer anywhere?
hi po… im currently working in a manufacturing company and working as a financial advisor at the same time. Last year, 2020, i registered as a mixed income earner, got my 2303 and paid my 0605 – annual registration…
i also file my 1701q quarterly.
Would like to ask if i still need to file 2551q and how would i file my annual income
> 2316 – can i still have it filed by my employer (substitute filing)?
>1701A – deadline April 15, 2021?
> do i still need to file other BIR docs?
Thank you for your assistance
If you are a mixed-income earner (employed with business income), should your employer still withhold tax from your compensation income? Will they still file BIR Form 2316 for your compensation (substitute filing)? Or are they supposed to give you the whole compensation without withholding the tax and you will do it on your own?
Hi JL! Taxes withheld by your employer from your compensation is different from the tax you need to pay BIR from your earnings as a business owner. Though when you file your Annual Income Tax you need to indicate how much you earn as an employee and how much you earned as a business owner. It is also important that you have the Form 2316 on-hand when filing your Annual ITR. This may be easily done through Taxumo. If you need assistance with this just send us a message at customercare@taxumo.com. 🙂
Hello po! Nagtayo po ako ng business while being a regular employee sa isang private company. Ask ko lang po kasi diba need idiclose sa employer yung info na magiging mixed income earner ka, sila an rin po ba bahala sa pagfafile ng taxes?
Hello Nirvana,
Good day!
Kayo po ang mag fafile ng taxes ninyo for the business while your employer will manage your taxes as a private employee. Pagdating po ng annual ITR filing, you need to consolidate your tx filings as an employer and business owner by filing the form 1701 and declaring the taxes that your employer paid which will come your form 2316 (which will be provided by your employer). 🙂
Hi Millicent,
Thanks sa response mo, this is helpfull. Just a question, yung Form 1701, do I have to submit this myself or can my employer do this?
Regards,
Vince
Hi Vince,
Yung pag paprocess po ng 1701 should be done by the taxpayer po. The employer should issue a form 2316 po to help the taxpayer consolidate their filings as a professional/freelancer and as an employed individual. 🙂
Yung income po ba na declare sa 2316 based sa gross compensation or based sa taxable compensation?
Hello Rowena,
The income declared on BIR Form 2316 is based on taxable compensation, not gross compensation. Taxable compensation refers to the amount of an individual’s earnings after deducting allowable deductions and exemptions, resulting in the amount considered taxable for tax purposes. Therefore, the value declared on BIR Form 2316 reflects an individual’s taxable compensation, which represents their actual earnings subject to taxation.
papano po kung as a freelancer for 2 years nagkaron po ako ng work sa corporate pero after 6 months naisipan ko pong magresign sa corporate? kailangan ko po bang pumunta sa BIR para ireport na hindi ako nakapagfile ng mixed income for 6 months?
Hello Ronald,
Good day!
If you are a mixed income earner for the year 2023, kailangan nyo po tapusin yung pag filings ninyo for year 2023 as a mixed income earner. By 2024, dun palang po kayo pwede mag file as a Sefl-Employed then you just need to make your first filing under Self-Employed category instead na mixed income earner and you’re all good na po. No need na po pumunta sa BIR to manually change your status from Mixed Income Earner to Self-Employed Professional. 🙂
Hello!
Just wanted to clarify po for mixed income earner:
Currently employed ako sa isang BPO company with an income of 300k annually and running an online business as a side hustle na nageearn ng less than 250k annually. Planning to register my online shop to BIR.
Regarding sa tax, compiled ba ung tax ko as an employee + ung earnings sa shop na idedeclare sa BIR? Or magkaiba po ung tax na kinakaltas na ni employer sa salary, and ung tax para sa shop? Meaning pag nagregister ng business, ang possible lang na matatax is ung sa shop?
Hello Sarah,
As a mixed income earner, yung taxes po ng business ninyo will be separate than your employee taxes. You will only need to consoldiate your employee taxes to your business taxes on the annual income tax filing. Bale need ninyo to incorporate your form 2316 which will be issued by your employer to your form 1701 which is the form for your annual ITR as a mixed income earner. 🙂
Hello. I’m currently employed (tax exempt) and would like to register my online shop to BIR. What forms should I accomplish to update my status from being employed to being a mixed income earner?
Hi Rhina! As an owner of an online shop, please register as a sole proprietorship (assuming it’s just you running the business). Go through registering with DTI, the LGU and BIR. It you need help, you can refer to this page: https://www.taxumo.com/business-registration/ 🙂