Various government registration requirements for independent contractors

Various government registration requirements for independent contractors

Being an independent contractor comes with plenty of benefits. You get to help companies reach their goals using your skills while being in charge of your own time and freedom.

That said, you can’t just offer your services as an independent contractor. Since you will be providing clients with a specialized service, the income you earn is considered taxable. Therefore, you must be registered with the Bureau of Internal Revenue (BIR) as a self-employed individual. Single proprietorship entrepreneurs, licensed professionals, and unlicensed professionals all fall in this category.

Here are the government agencies that you need to register with:

The Mayor’s Office

One of the documents you’ll need is the Mayor’s Permit. Non-licensed professionals need to get an Occupational Tax Receipt (OTR) while licensed professionals like accountants, lawyers, and engineers need a Professional Tax Receipt (PTR).

Some cities do not issue an OTR while some may require a health permit before issuing an OTR or PTR. To get your Mayor’s Permit, head to the local Treasurer’s Office at your city hall.

Bureau of Internal Revenue (BIR)

A Tax Identification Number (TIN) is one of the most important things you’ll need in order to pay taxes. It also proves that you are registered with the BIR. Whether you’re a Filipino citizen or a foreign national, you’re required to register if you’re earning income in the Philippines.

A fully-accomplished BIR Form 1901 is another important document. This form is for those applying as Self-Employed and Mixed Income Individuals. You’ll see the different tax types and tax rates in the form. Your RDO will issue your TIN (if you don’t already have one) and your Certificate of Registration.

If you were previously employed, your TIN is already registered in the RDO of your past employer or company. In this case, you need to fill up BIR Form 1905, or the Application for Registration Information Update for Updating. This form allows you to transfer your RDO from your previous employer’s to a different one. Since you’re an independent contractor, your new RDO can be the one assigned to your place of residence.

As an independent contractor, you also need your own official receipts. Fill out BIR Form 1906, or the Authority to Print (ATP) form and wait for your RDO to release it. An accredited BIR printer will then print your receipts.

Other requirements include:

  • NSO Birth Certificate
  • Mayor’s Permit
  • Proof of address
  • Valid ID with your name, birthday, and signature

Social security agencies

    1. Social Security System

      Created to provide working individuals in the private sector with protection against sickness and medical expenses, the Social Security System (SSS) provides an essential benefit that you need as an independent contractor.

      To be a part of the SSS as an independent contractor or a self-employed individual, you’ll need:

      • SSS Form RS-1 (Self-Employed Data Record)
      • Driver’s license
      • Birth certificate

      Employers are required to register their employees with the SSS as part of the Employee Benefits and Contributions law. They usually pay a portion of your contributions for you.

      If you previously worked in a company that was already paying your SSS, you can update your personal record. You’ll be considered a voluntary paying member.

    1. Philippine Health Insurance Corp. (PhilHealth)

      PhilHealth provides health coverage for all working individuals, from private employees to remote workers. There are two ways to register for a PhilHealth Voluntary Membership: at a PhilHeath office or online.

      If you plan on registering in person, head to any of the Local Health Insurance Offices or PhilHealth Express outlets. These are available nationwide.

      Fill out two copies of the PhilHealth Member Registration Form (PMRF).

      After submitting the forms, your PhilHealth Member Data Record (MDR) and ID card will be issued.

      For online registration, open the PhilHealth registration form and fill in the required information. After submitting your registration, instructions will be sent on how to complete your application.

  1. Pag-IBIG Fund

    The Pag-IBIG Fund provides affordable home loans to Filipinos. This national savings program, which is also known as the Home Development Mutual Fund, gives members an opportunity to buy brand-new properties, residential homes, condominium units, and townhomes.

    Just like your SSS and PhilHealth, you also need to register as a voluntary contributor for the Pag-IBIG Fund. Self-employed individuals need to submit the following documents:

    • Latest income tax return
    • Mayor’s Permit or Business Permit
    • DTI Registration (For sole proprietors)
    • Two 1×1 ID photos

For business registration and tax compliance services, get in touch with FilePino today! Give us a call +63.917.892.2337 or contact us here to learn more on how to set up a consultancy business in the Philippines.