BIR taxpayer classification: micro, small, medium, large

The four classes

RR 8-2024 implements the taxpayer classification of the Ease of Paying Taxes Act. A micro taxpayer has gross sales for a taxable year of less than ₱3,000,000. A small taxpayer has ₱3,000,000 to less than ₱20,000,000. A medium taxpayer has ₱20,000,000 to less than ₱1,000,000,000. A large taxpayer has ₱1,000,000,000 and above.^[1]

Almost every sari-sari store, carinderia, small online shop and freelancer is a micro taxpayer. A busy hardware or grocery with several branches can be small.

What counts as gross sales

Gross sales means total sales revenue, net of VAT if applicable, during the taxable year, without any other deductions. Costs, salaries and rent do not lower the figure.^[1]

Example: a bakery in Tacloban sells ₱3,400,000 in 2026 and spends ₱3,100,000. Its profit is small, but its gross sales put it in the small class, not micro, because the classification looks at sales only.^[1]

Why your class matters

RR 6-2024 implements reduced interest and penalty rates for micro and small taxpayers under the EOPT Act. If you file or pay late, being correctly classified as micro or small can lower what you owe on top of the tax.^[2]

The regulation sets the specific reduced rates. Do not rely on being micro to file late: the reduction lowers the penalty, it does not remove it. Filing on time is still the cheapest option.

Micro taxpayer is not the same as BMBE or non-VAT

Three different ₱3,000,000 figures cause confusion. The BIR micro class looks at gross sales for the year. A Barangay Micro Business Enterprise (BMBE) under RA 9178 is defined by total assets of not more than ₱3,000,000, excluding the land the business sits on. The VAT rules decide whether you charge 12% VAT.^[1,3,4]

A business can be one of these without the others. Example: a printing shop with ₱2,000,000 in sales but ₱4,000,000 in equipment is a micro taxpayer for BIR but is too big in assets to be a BMBE. See BMBE registration and the VAT threshold.^[1,3]

How BIR decides your class and how to check it

Businesses that register after RR 8-2024 took effect are first classified based on their declaration in the registration forms. So the expected sales you enter in Form 1901 or 1903, or in ORUS, set your starting class.^[1]

BIR announced in RMC 62-2024 that ORUS has a Taxpayer Classification Inquiry function. Use its BIR-Registered Business Search and Taxpayer Classification Inquiry: enter your registered name, TIN and branch code to see the class BIR has on record. If the class is wrong, write to your RDO with proof, such as your 2022 income tax return.^[2]

Classes under RR 8-2024

Questions people ask

Am I a micro taxpayer?

If your gross sales for the taxable year are less than ₱3,000,000, RR 8-2024 classes you as micro.

How do I check my classification?

Use the Taxpayer Classification Inquiry function in ORUS, which BIR announced in RMC 62-2024.

Do micro taxpayers pay lower penalties?

RR 6-2024 provides reduced interest and penalty rates for micro and small taxpayers. Filing late still costs money, so file on time.

Will my class change if my sales grow?

The classes are based on gross sales for the taxable year, so a business that grows past ₱3,000,000 moves from micro to small. Check ORUS after each year's annual return to see what BIR has on record.

Is the micro limit the same as the VAT threshold?

Both use ₱3,000,000, but they are separate rules. The micro class is less than ₱3,000,000 in gross sales; the VAT rules decide whether you register as VAT. See the VAT threshold page.