Guide · Taxation
8% flat tax vs graduated rates for doctors
Doctors with professional income can choose between the 8% flat tax and the graduated income tax rates. The 8% is charged on your gross receipts above ₱250,000 and replaces both the graduated income tax and the percentage tax — simple, and often lower when you have few deductible expenses. Graduated rates tax your net income and can win when expenses are high. You elect once a year.
How the 8% works
The 8% is charged on your gross receipts for the year, less a ₱250,000 deduction, and takes the place of the percentage tax. It's available if your gross receipts stay within the VAT threshold and you're not VAT-registered. You signal the choice at the start of the year or on your first quarterly return.
When graduated rates win
Graduated rates tax your net income — receipts minus allowed deductions — using the BIR income tax table, plus percentage tax. If you carry substantial costs like clinic rent, staff, and supplies, graduated rates with itemized deductions or the Optional Standard Deduction can come out lower.
Choosing
The right pick depends on your expenses and income level, and the election is made yearly and is hard to change mid-year. Medtax models both against your actual numbers so you elect the one that costs less.
General information based on the TRAIN Law and its regulations. Rates and thresholds can change — confirm what applies to you with your Medtax account manager.