Online Teaching · Taxation

Tax Tales of the Self-employed Part 3 (Monthly Percentage Tax)

If you are reading this, then let me first congratulate you for registering as a self-employed tax-payer! Woot! For the 3rd installment of this series, I will be sharing how to file and pay for your monthly tax dues. Yes you read that right! Aside from the income tax (10%) that is being deducted from our tutor fee every month, we have to pay another type of tax referred to as the Monthly Percentage Tax (3%).

As defined by BIR:

Percentage tax is a business tax imposed on persons or entities/transactions:

Who sell or lease goods, properties or services in the course of trade or business and are exempt from value-added tax (VAT) under Section 109 (w) of the National Internal Revenue Code, as amended, whose gross annual sales and/or receipts do not exceed Php 1,919,500 and who are not VAT-registered; and …

You may view the complete list here for reference.

The Monthly Percentage Tax (MPT) must settled on or before the 20th day of the following month using the 2551M Form. So, you need to pay on or before August 20 for your July’s MPT to avoid any penalties. Incurring one is very time-consuming and expensive too. Trust me! I’ll just make another post on my experience with late payments, but for now let’s focus on paying our tax dues on time.

Fortunately, the filing can be done online. To do this, you need the following requirements:

  • eBIRForm Package v6.1
  • Stable internet connection
  • Valid and working e-mail address

First, visit the BIR website, and download the eBIRForms Package v6.1.

Filing Your Monthly Percentage Tax

After installing it, open the program and fill it out with your personal details. Then, look for the 2551M form from the drop-down box and click “Fill-up”. A prompt will appear and click Ok.

Filing Your Monthly Percentage Tax

 

After clicking “Ok”, you should be able to see the form with your details below:

Filing Your Monthly Percentage Tax

 

Click the ATC link to compute for your tax.

Filing Your Monthly Percentage Tax

Choose the PT010 Person Exempt From VAT option and click Ok. You will then be directed back to your 2551M form.

Filing Your Monthly Percentage Tax

Under the taxable amount column, type in your gross monthly salary for the designated month and the program will automatically compute your tax. If you are already sure of your entries, click Validate. If there are no errors, then you may already click Submit/Final copy. For first-timers, you will be asked to provide your e-mail address and tax identification number again for confirmation. A prompt showing the eBIR form Terms of Service Agreement will pop-up so just click Agree. Once successful, you will receive an email from BIR. Easy peasy, right? It may take several minutes to a few hours to receive the email so don’t fret.

Now that you have filed your 2551M, print 4 copies of the form and pay through authorized banks. I usually pay via PNB or BPI. Kindly ask the security guard for the BIR slip that you need to fill-out. One stamped copy will be returned to you for your reference.

You might be wondering if we can also pay online, and according to BIR, yes you may! Just visit your designated RDO branches to register, but personally I haven’t tried doing so since I use it as an excuse to go out and have a day off.

Thank you for tuning in to the my Tax Tales of the Self-employed series. This will not be definitely the last, so keep checking my website for updates. Happy teaching! ♥♥♥

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3 thoughts on “Tax Tales of the Self-employed Part 3 (Monthly Percentage Tax)

  1. Hello,

    Thank you so much for this.
    I started working online quite young and have neglected my taxes.
    I’m looking forward to reading your “post on my experience with late payments”.

    Like

    1. Hi teach! I also have the same dilemma. I was advised by the BIR officer in our RDO to consult a bookkeeper or accountant for that to be safe 😉

      Like

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