Percentage tax is a business tax on non-VAT-registered sellers whose annual gross sales or receipts do not exceed ₱3,000,000. The rate is 3% of gross quarterly sales, back from 1% since 1 July 2023. You file BIR Form 2551Q within 25 days after the end of each quarter. If you chose the 8% income tax, you do not pay percentage tax.[1,2]
Outdated advice
Some calculators and guides still use a 1% percentage tax rate.
Now: The 1% rate ended on 30 June 2023. From 1 July 2023 the percentage tax is 3% of gross quarterly sales.[2]
Who pays percentage tax
BIR applies percentage tax to persons who are not VAT-registered and who sell goods, properties or services with annual gross sales or receipts not over ₱3,000,000. For non-VAT persons under Section 109 (BB), the rate is 3% of gross sales or receipts.[1]
Self-employed individuals who choose the 8% income tax pay it in place of both the graduated income tax and the percentage tax. That is the main reason many small sellers choose 8%: one tax instead of two.[3]
The rate went back to 3% in July 2023
Under the CREATE Act, the percentage tax was 1% for a period that ended on 30 June 2023. RMC 69-2023 confirms that sales from 1 January to 30 June 2023 were taxed at 1%, and that the rate reverted to 3% of gross quarterly sales effective 1 July 2023. Cooperatives and self-employed individuals on the 8% rate are excluded.[2]
If a guide or a calculator still uses 1%, it is out of date. Every quarter from July 2023 onward uses 3%.
How to compute and file 2551Q
BIR's percentage tax page names Form 2551Q, the 25-day deadline and the online payment channels: GCash, LandBank of the Philippines Linkbiz Portal, and DBP Tax Online.[1]
Under RR 4-2024, filing is electronic on any available platform, with manual filing allowed when platforms are down, and the 25% civil penalty for filing with the wrong revenue officer is no longer imposed. Some older BIR procedure text still says to pay at a bank in your RDO's area; that location rule no longer carries the penalty.[4]
- Total your gross sales for the quarterAdd up all invoices for the three months. Gross means before expenses: what customers paid you.
- Multiply by 3%The result is your percentage tax due for the quarter.
- Fill in Form 2551QUse eBIRForms or eFPS. BIR's EOPT rules say returns are filed electronically on any available platform.
- Pay by the deadlinePay within 25 days after the quarter ends, at an authorized agent bank or online through GCash, LandBank Linkbiz or DBP Tax Online.
Example: a sari-sari store's quarter
Example: a sari-sari store in Quezon City, non-VAT, on graduated income tax rates, sells ₱240,000 from January to March 2027. Percentage tax is ₱240,000 × 3% = ₱7,200, due within 25 days after 31 March, which is 25 April 2027. If the same owner had elected 8% for 2027, there would be no 2551Q to pay for that quarter.[1,3]
Set aside 3% of each day's sales in a separate tin or account. By the deadline the money is already there.
2551Q deadlines
| Quarter | Months covered | File and pay within 25 days, by |
|---|---|---|
| Q1 | January to March | 25 April |
| Q2 | April to June | 25 July |
| Q3 | July to September | 25 October |
| Q4 | October to December | 25 January of the next year |
Questions people ask
- Do I pay percentage tax if I chose 8%?
- No. The 8% income tax is in lieu of both the graduated income tax and the percentage tax.
- Is percentage tax based on profit?
- No. It is 3% of gross sales or receipts, so you pay it even in a quarter where expenses ate up the profit.
- What if I had no sales this quarter?
- Your COR still lists the tax type, so ask your RDO how to file a return with zero sales. Missing a return can lead to penalties even when no tax is due.
- Can I pay percentage tax with GCash?
- Yes. BIR names GCash, LandBank Linkbiz and DBP Tax Online as online payment options.
Every quarter
- Total your invoices for the three months
- Multiply gross sales by 3%
- File 2551Q in eBIRForms or eFPS
- Pay through GCash, LandBank Linkbiz, DBP Tax Online or a bank
- Save the filing and payment confirmations with your books
- Mark the next 25th on your calendar
Sources
Checked 13 November 2026. We link the agency's own page for every requirement. Rules change; confirm with the office before you pay.
- Percentage Tax · Bureau of Internal Revenue
- Digest of Revenue Memorandum Circular No. 69-2023 · Bureau of Internal Revenue · 20 June 2023
- Income Tax · Bureau of Internal Revenue
- Digest of Revenue Regulations No. 4-2024 · Bureau of Internal Revenue · 11 April 2024