Self-Employed Individuals/

Business Owners

2 options:
1. Graduated Rates – (20%- 35%) for Income Tax Only + Percentage Tax – (1%)

2. 8% Optional Rate/ Bundle Rate: This will be in lieu of both Graduated and
Percentage Tax Rates
This option is only available IF:
• NON-VAT Registered Individual Taxpayer
• Those whose annual gross sales and receipts and other non-operating
income do not exceed Php 3,000,000.
• Not available to: VAT Registered Individual Taxpayer
• Non-Vat Registered but are subject to other percentage taxes
• Non-Vat Registered but gross sales/receipts exceeds Php 3,000,000.
• If partner of GPP
• If a Corporate Income Tax payer
COMPARISON:
Sales 200,000
Cost of Sales 120,000
Expenses connected in Business 30,000

GRADUATED RATES 8% OPTIONAL RATE

Sales 200,000 Sales 200,000
Cost Of Sales (120,000) Exemption of 250,000 (250,000)
Gross Operating Income 80,000 Total -
Expenses (30,000) Exemption of 250,000 8%
Taxable Income 50,000 Tax Due -

EXEMPT FOR INCOME NO TAX FOR 8%.

TAX BECAUSE BELOW NO PT.
250,000 pesos (annual)

ANOTHER TAX TO PAY

PERCENTAGE TAX

Gross Sales of 200,000

times 1% PT = 2,000
annual PT to be divided
quarterly.
COMPARISON:
Sales 2,200,000
Cost of Sales 500,000
Expenses connected in Business 260,000

GRADUATED RATES 8% OPTIONAL RATE

Sales 2,200,000 Sales 2,200,000
Cost Of Sales (500,000) Exemption of 250,000 (250,000)
Gross Operating Income 1,700,000 Total 1,950,000
Expenses (260,000) Optional Rate 8%
Taxable Income 1,440,000 Tax Due 156,000

Tax due: 130,000 plus NO TAX FOR 8%.

192,000 = 322,000 NO PT.

***excess
1,440,000 – 800, 000 =
640,000 * 30% =
192,000
ANOTHER TAX TO PAY

PERCENTAGE TAX

Gross Sales of 2,200,000

times 1% PT = 22,000
annual PT to be divided
quarterly.