Freelancers-registration & Basics.pdf




F R E E LAN C E R registration & basics




1 Basic Facts About Freelancing Freelancing Means Hard Work Freelancing Is a Commitment

4 Why Being a Registered Freelancer is Good for You Benefits of Freelancing Benefits of Registering as a Freelancer

7 The Process of Registering as a Freelancer

Table of Contents

Requirements for Registering a Freelance Business Submitting Your Registration Requirements Receipts & Bookkeeping How to Obtain an Official Receipt Registering Your Book of Accounts

13 Fantastic Freelancing Jobs & Where to Find Them Raking in the Big Bucks Websites for Freelancers

17 Your Home Base The Perks of Working at Home Setting Up Your Workspace Identify Your Work Area Tools of the Trade Organize Your Files

Freelancers: Registration & Basics

BASIC FACTS & IDEAS ABOUT FREELANCING Freelancing has become a buzzword for those who seek a range of work opportunities and extra income. It offers flexibility in the workplace, as well as a way to upgrade skill sets. Homemakers and even the those not traditionally working (like students) turn to freelancing and make use of their knowledge and free time to earning money. All that said, freelancing can now become a legitimate and stable business for some people,

especially for those who pursue this venture full time. In today's world, Freelancers generally take job orders online through international freelancing sites like Upwork, Onlinejobs.ph, and local ones like Raket.ph. Experienced freelancers either interact directly with or are sought after by clients. Other job sources are professional networking sites, referrals, and headhunters. Even social media sites offer opportunities through ads or posts.

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Freelancing Means Hard Work There’s a misconception that freelancing is for lazy or socially awkward people. Some may also say that freelancing is for those with limited career choices. This isn't so, especially in the Philippines.

Freelancing websites claim to have over a million registered Filipino users working on different fields. A survey by Freelancing.ph says that as of 2016, the population of freelancers comprises of predominantly female users, aged 25 to 34 years old, and in Metro Manila. Working as a General Virtual Assistant, it adds, is the most popular niche among freelancers. Other top specializations are content writing and strategy, digital marketing, web development, and customer support. Learning and upgrading skills lead to more job offers, and thus more income. Simply put, freelancing offers an opportunity for career growth, as long as you are willing to keep learning. Freelancers generally charge based on their location, expertise, and length of experience. That said, freelancers in the Philippines charge the lowest hourly rate so far at $11.72, compared to those in Great Britain who charge $46.54 per hour. The US, in comparison, has an average rate of $37.87. In the local setting, freelancers work 32 hours a week on average, and in turn, earn P39,000 a month. Some earn as much as P100,000 or more, but this may mean they charge higher rates rather than work longer hours. More seasoned freelancers tend to do both. Hubstaff says developers make up the largest number of freelancers worldwide. Other top niches are design and multimedia, administrative jobs like data entry and virtual assistants, and writing. In these specializations, Filipino freelancers are among the most active talents in the international workplace.

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Freelancing Is a Commitment Yet another common misconception about freelancing is that it’s easy and stress-free. It’s partly true that all you need is a suitable computer or laptop, and a stable internet connection, and you’re set. Even so, working freelance needs as much discipline and effort as a regular job.

Freelancers who hope for easy money will be disappointed. Becoming a freelancer is no different from setting up your own business, especially once you start accepting regular jobs. That means managing your finances, planning your activities, and upgrading your services, all the while improving your own skills and spending personal time. Apart from the rigors of ensuring quality service, you have to play the part of the businessman on paper too. You will need to show proof that you are a legitimate service provider, such as issuing receipts, showing permits, and paying taxes. There is a perception about freelancing as a business that online freelancing sites engage in digital arbitrage, meaning they enable employers to avail of cheap labor. This may seem the case, considering how low Filipino freelancers seem to charge on average. Add the fact that freelancing sites deduct from a freelancer’s fees for acting as middlemen.   However, while freelancing sites help employers get services at minimal cost, they also ensure that freelancers get the best rates possible, depending on one’s skills. As mentioned earlier, freelancers charge based on their location and forte, and some even consider cost of living in their rates. It all boils down to the quality and quantity of work you offer. At the end of the day, freelancing can be a competitive and rewarding career option. It can help boost career growth, improve your competencies, and provide an ample income stream at your own pace.

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Freelancing holds vast opportunities for career growth, networking, and financial stability (part 1). Employees, homemakers, and even the unemployed have turned to freelancing to earn extra income and explore the possibilities of their career paths. Apart from the opportunities that it presents, people enjoy various benefits from working freelance.

Benefits of Freelancing 1. Increasing demand 
 Companies nowadays recognize the need to outsource talents (https://www.forbes.com/sites/ abdullahimuhammed/2017/01/31/why-now-is-thebest-time-ever-to-become-a-freelancer/ #72a3c62d7b32). Sometimes, new positions are being created to accommodate freelancers. This is a great opportunity for those with specialties, or those branching out from their regular careers. Popular positions are in the fields of web development, administrative work, content, and customer support. Taking advantage of the rising demand for freelancers leads to more earnings and opportunities for growth.

Freelancers: Registration & Basics

2.

Flexibility and time management
 As a freelancer, you are your own boss. You may choose where to work, whether at home, coffee shop, or your own office. You can also work on weekends, after your regular work shift, or any other convenient time. You can also manage your time according to what works best for you. That includes scheduling your interaction with clients, preparing materials, presenting your output, and enjoying the fruits of your labor.

3.

Control over work pace
 Aside from being able to work any time, you can control how much work you can put in. If you’re a fulltime freelancer, you can use your time to your advantage and accept as many projects as you can handle.

4.

Higher income
 The prospect of earning in dollars is enough to draw in freelancers, but in general, freelancing augments your current salary, or gives you a new source of income. Some employers pay good rates, but if you have the experience and expertise to show for it, you can name your price or negotiate.

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More personal quality time
 Since you work at your own pace and setting, that leaves you more time to spend doing the things you enjoy. You can travel, spend more time with your family and friends, do household chores, study, or take care of yourself (like getting a check-up or taking up martial arts). Just remember to manage your time well in case you decide to squeeze in a job or two while hanging out.

Freelancing already has a lot of personal benefits, but more can be gained when you register yourself with the Bureau of Internal Revenue (BIR). Believe it or not, registering with the BIR is expected of every earning individual or company. The sole purpose for this is to ensure that you pay your taxes. You may register (Full Suite Blog: Independent professional vs Sole Proprietor) as a sole proprietor, if your freelance work involves a small or home-based business, or as an independent professional, if you provide services without being affiliated with any company. Either way, you gain various advantages when you are recognized as a tax-paying freelancer.

Freelancers: Registration & Basics

Benefits of Registering as a Freelancer 1.

A sense of legitimacy


4.

When you’re registered with the BIR and you issue official receipts with your name on it, clients will feel more confident that they’re obtaining the services of a legitimate business. Recognition as a registered business also helps you get your name out into the market. 2.

3.

The ultimate fear of businesses, tax evasion is punishable by law. Section 74 of the National Internal Revenue Code of 1997 simply states that as long as you render services and earn from them, you need to pay the corresponding taxes. As a taxpayer, you are expected to settle your quarterly and annual income tax, business taxes, and local tax requirements. When you register, the BIR will brief you on your duties, so pay attention. (Full Suite Blog: Freelancers Guide to Paying Income Tax)

Tax payments as proof of earnings
 Your annual income tax return (BIR Form 1701) serves as your proof of earnings. Keep your papers close and present them when applying for loans from banks, social security (SSS), and other lending companies. You can also use it when applying for credit cards or visas to travel.

Avoiding charges of tax evasion


5.

Fulfilling your moral and ethical obligations
 Registering helps you sleep better at night, knowing you have fulfilled your duties as a worker, an upright business provider, and a citizen of the Philippines.

Avoiding penalties
 Paying taxes may be tedious, but in the long run it will help keep your business or income generation secure. As long as you pay your taxes on time, you can avoid penalties and surcharges.

Whether as a professional or a small business owner, registering has advantages that further boost your work and your brand, and the benefits gained as a freelancer.

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THE PROCESS OF REGISTERING AS A FREELANCER There's an idea out there that freelancers don’t need to pay taxes or

The Bureau of Internal Revenue classifies freelancers and home-based service providers as self-employed workers (Full Suite Blog: Independent Professional vs Sole Proprietor). Here is a summary of the registration process you need to undergo with the BIR: 1.

Gather the necessary BIR forms (online or offline), along with your documentary requirements.


2.

Submit your requirements to the BIR RDO (Revenue District Office) that your business address is under.


3.

Obtain copies of your official receipts (or sales invoices, if applicable) through a BIR-accredited printer. 


register their businesses. (Full Suite Blog: Pinoy Freelancers & Income Tax). While there are freelancers who intentionally evade these responsibilities, many don’t actually know what they're supposed to do. According to Section 74 of the National Internal Revenue Code of 1997 an individual receiving income within or outside the Philippines is required to pay taxes. You are considered as self-employed if you are:
 •

A sole proprietor who owns a small or home-based business;

•

A professional who practices a profession, even without being affiliated with a company; or

•

Anyone who “(pursues) an art and make their living therefrom,” including writers, athletes, and others.


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Freelancers: Registration & Basics 


Requirements for Registering a Freelance Business Prepare these documents before you start your registration. 1.

Birth Certificate or any documents showing name, address, and birthdate;
 Just to be safe, prepare these beforehand:

2. 3.

Mayor’s Permit, if applicable;
 Photocopy of your birth certificate


2.

Photocopy of your marriage certificate (if married) and the birth certificate/s of your dependents, if you have any


3.

Photocopy of proof of address


4.

Photocopy of ID with name, birth date, and signature


DTI Certificate of Business Name, if applicable;


4.

Professional Regulation Commission ID, if applicable; and


5.

Payment of Professional Tax Receipt (PTR) from the local government, if applicable


•

1.

NOTE: Ask your RDO for possible conditions when submitting your PTR payment. Some cities don’t require this. Others may ask you to submit this personally, or you may be allowed to have an authorized party do so for you. 


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Submitting Your Registration Requirements Once you have these documents, here’s what you’ll need to do: 1.

•

2.




3.

Accomplish two copies of BIR Form 1901 (for individuals) and submit it along with the required attachments to the RDO that has jurisdiction over your business’ address. If you already have a Tax Identification Number (TIN), this makes your application easier. 
 NOTE: The BIR has a directory to help you find which RDO your business will be under. You may also call the BIR Trunkline at 981-7000 to confirm your RDO address.
 Pay the registration fee of P500.00 using BIR Form 0605 (Payment Form) to any Authorized Agent Bank located within the RDO. Prepare one original and two photocopies of this form.
 Pay P 15.00 for the Certification Fee and P15.00 for the Documentary Stamp Tax.

4.

Attend a taxpayer’s briefing at your RDO. This is where you will learn your rights and responsibilities as a taxpayer.


5.

At this point, if you’ve submitted all of your requirements, you will be issued your TIN (in case you don’t have one), the BIR Certificate of Registration (COR or Form 2303), and an "Ask for a Receipt" Notice (ARN). The COR will reflect the returns that must be filed and the taxes to be paid, so keep it close by.


You may opt to accomplish your BIR forms using the Offline eBIRForms Package instead of manually filling them up. You can encode, edit, and validate your details online. Print them out and submit along with a confirmation email when you pay your fees. Once you’ve paid everything, you can submit the printed forms to your RDO. Be careful when attempting to apply for a TIN online. If you’re freelancing, you will need to go to BIR’s eRegistration system, which is for single proprietors and mixed income earners. If you’re an employee, don’t do it. Application of new TINs online can only be done by employers. (Full Suite Blog: BIR Tin Application for Employees)

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Once you become a registered professional, you’ll need to

Receipts &

have your own sales invoices or official receipts (OR) printed. The BIR has a strict policy regarding receipts. (Full Suite Blog: Everything You Need to Know about the new BIR Ruling on Official Receipts and Invoices) It would be best to work on getting your receipts on the same day you’re processing your registration.

Bookkeeping

You may sometime hear the terms “receipts” and “invoices” interchangeably. Don’t get confused. If you’re selling goods, you are expected to issue invoices. If you’re offering services, you must issue ORs. (Full Suite Blog: Sales Invoice vs Official Receipt) So if you’re a freelancer who offers services, you need to get ORs.


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How to Obtain an Official Receipt 1.

Fill up 3 copies of BIR Form 1906, or Authority to Print (ATP) Official Receipts, Invoices, and other Commercial Invoices. Also, bring a copy of your BIR Certificate of Registration (COR) or BIR Form 2303 and 0605.


2.

Submit your requirements to your RDO. You may have to wait up to two weeks for your ATP to be released.


3.

Submit your ATP to an accredited BIR printer. 


4.

Wait for at least 10 to 15 working days for the release of your receipts.


a duplicate (or a triplicate if you’re running a huge operation). Your receipts will be preserved for 3 years from the close of the taxable year. You may use carbon paper to help you make copies of your receipts. Or if you can spare a few extra pesos, you may opt to get a carbonized copy. This will save you the effort of stocking up on carbon paper and rewriting details again. 
 •

You may also need to issue a billing statement. A billing statement is issued when you bill a client for services, after which you issue an OR once you’re paid. Some clients specifically request for billing statements while some don’t. If you are unsure if you’ll need a billing statement, it’s always best to get one so you don’t have to worry about the downtime brought by updating your ATP and printing out receipts. 


•

If your business sells goods, you will need to issue a collection receipt. This is given to the client when receiving payment after delivery of goods.


Take note of the following when you issue receipts: •

Receipts are serially numbered.


•

The receipt should show the professional’s name, business style, TIN, and business address. You may choose to add a logo or other customizations, but adding these will require approval and take more time printing.


•

The receipt should be issued during every transaction. The client will receive the original copy, and you will keep

Freelancers: Registration & Basics 


Registering Your Books of Accounts

1.   

Submit a copy of BIR Form 1901.

2.   

Bring your books of accounts (journal/ledger/

The BIR also requires you as a professional to maintain books

subsidiary professional income book and subsidiary

of accounts.  These could be managed by any acceptable

purchases/expenses book) and have them stamped by the

method of accounting (accrual or cash basis) in a consistent

same RDO.

manner. Like your receipts, these will be preserved for 3 years

3.   

Pay P15.00 for the Documentary Stamp.

from the close of the taxable year for post audit examination. Take time to have them processed along with your registration

The business registration process is a tedious task, but once

and receipts.

you accomplish everything, you can present yourself more confidently to clients as an honest-to-goodness business (Full Suite Blog: Independent Professional vs Sole Proprietor).

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Freelancing is not only a way to earn extra income and experience, it also serves as an alternative way to start a business. Some home-based businesses start as freelance work (Full Suite Podcast: Freelancing vs Other Jobs), which eventually gain their own following eventually becoming their own brand. Otherwise, you can stick to what you're good at because clients will keep coming if they want what you've got to offer.

It helps that companies nowadays recognize the need to outsource work (page 4), leading to the trend of hiring freelancers. This is why freelancing has become competitive and lucrative as a business or career.


Freelancers: Registration & Basics 


Raking in the Big Bucks Filipinos are said to be among the most active freelancers worldwide (page 1). They take jobs in some of the top industry niches, such as virtual assistants, design and multimedia, and content. Working as General Virtual Assistants is the most popular niche among Filipinos, followed by content writing and strategy, digital marketing, web development, and customer support.

$8 per hour, or a monthly average of $480 to $1280 (P24,000 to almost P65,000). Content/article writers are also popular, but they earn the least. They get paid a fixed rate between $9 and $25 per 500-word article (around P450 to P1,200). SEO specialists, while also paid fixed rates, get below $1,000 monthly (around P50,000) per client.

But how much do freelancers actually earn? While jobs for General Virtual Assistants are aplenty, a survey by Freelancing.ph showed that content editing and strategy is the highest paying job category, at an hourly rate of $6 to $15 per hour. That’s up to $2,400 (or about P120,000, as per the current exchange rates) on average monthly. Project managers and web developers, next on the list of high-earning jobs, both earn up to $1,920 (P97,000) on average monthly. The difference is that web developers charge $6 to $12 (around P300-P600) per hour, while project managers charge a minimum of $9 (around P450). General Virtual Assistants, on the other hand, earn $3 to

Other freelancing jobs that are becoming popular despite their moderate, varied rates are social media managers, application developers, recruiting managers, transcriptionists.   What’s assuring about freelance jobs is that their rates will probably go higher in the years to come. That’s because there are other factors considered in setting rates, such as the location of the freelancer, expertise, length of experience in a particular field, and even inflation rates and the demand.

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Freelancers: Registration & Basics

Websites for Freelancers Freelancers who can’t get direct referrals turn to job portals for work. Job portals not only post regular job openings, but they also offer online jobs. Some of these websites have become havens for freelancers. Here are some of the popular websites for freelance work. Upwork (https://www.upwork.com/) – Upwork is one of the major sources of online jobs around the world. Among the most sought after jobs here are web developers, virtual assistants, writers, and consultants. Freelancer (https://www.freelancer.com/) – Another popular website, Freelancer caters to businesses and freelancers in the field of website IT and software, mobile applications, and design.

 It also hosts contests launched by businesses looking for creative ideas through crowdsourcing. Toptal (https://www.toptal.com/) – Toptal claims to hire the “top 3% of freelance talent”, or the top software developers, designers, programmers, and finance experts in the world. It also boasts of an international clientele consisting of top brands, enterprise, and startup clients. MyOutDesk (http://www.myoutdesk.com.ph/) – virtual assistant jobs PH – MyOutDesk offers part-time and full-time jobs for real estate virtual assistants in the Philippines. Hired applicants are said to earn a guaranteed $500 to $800 a month. They also offer trainings to qualified applicants.

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Freelancers: Registration & Basics

RareJob (https://www.rarejob.com.ph/)   – RareJob, an online English school, offers openings for freelancers who would like to become ESL tutors.  Selected tutors teach English to Japanese students via Skype. Not to be confused with RareJobs (https:// rarejob.ph/), which is under the same company but offers office-based jobs related to ESL. 99Designs (https://99designs.com/) – Calling itself the world’s largest graphic design marketplace, 99Designs connects businesses looking for logos, web and app design, and other design templates. Thousands of Filipino designers to date are part of 99Designs, and the Philippines is one of the website’s top designer communities.

Raket.ph (https://raket.ph/) – A job search site with a local twist, Raket.ph makes use of the Filipino social dynamics of giving referrals for a particular job. It also acts as a third-party to bridge clients and freelancers. The site currently has over 38,000 freelancers and clients working together, as well as thousands of unique inquiries for jobs. OnlineJobs.ph (https://www.onlinejobs.ph/) – Another website catering to Filipino freelancers, OnlineJobs.ph opens the market for virtual assistants and employees. Freelancers can earn a minimum of $300 to $350 a month (that’s full-time). If you’re new to freelancing, you need to take a job that matches your skills and pays good money for them. Knowing the right job for you and the right place to find it will help you go a long way.

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By now, you may have decided to start freelancing. You’ve found the niche you want to work in, and either you see yourself managing a full-blown business or accepting clients on a per-project basis. It could get inconvenient to do your stuff in your workplace or a coffee shop all the time, so a good thing to consider is to work at home.

Freelancers: Registration & Basics 


The Perks of Working at Home Having your own workplace at home is advantageous in a lot of ways. 1.

Working at home can make you more productive. With all of your resources close by, you can concentrate on the tasks at hand and maintain your momentum. You get less of the distractions present in regular offices. It also feels good when you work in a place where you’re most comfortable.


2.

Apart from commuting to your regular job (if you have one), you don’t need to travel often. That saves you time wasted mostly on traffic, gasoline, and fare, relieving you from a lot of stress.


3.

Working at home can be healthy. That means less work-related stress plus more time to rest and exercise.


4.

Working at home helps you achieve a work-life balance. You have plenty of time to work, even at your own pace. With a flexible schedule, you can spend more quality time for yourself and your family. That includes finishing chores, studying, playing with your children and/or pets, and accomplishing personal tasks that you can’t make time for as a regular employee.


5.

Working at home can give you a sense of independence. By learning to balance your time, set goals, budget your expenses, and maintain discipline, you can make your home-based job a successful and profitable venture.

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Identify Your Work Area

Setting Up

Pick an infrequently used part of your house, where you can easily move around. Make sure it’s well-lit and ventilated. You may want a workplace with a good view, like a window view, but ensure that it is less prone to distractions such as environmental noise. Once you have a space to work on, pick a suitable desk where you can work at ease. You’ll also need a comfortable chair, as well as added space for your tools and paperwork. If you have the budget, you may want to get space-saving furniture, like DIY shelves and double-duty file cabinets. The key is to install office furniture that provides functionality, ease, and comfort.

Your Workspace

“But what if I want to work in my bedroom?” you may ask. The same principle of functionality, ease,  and comfort applies here. Just don’t get tempted to plop into bed every now and then, unless you’re disciplined enough to work where you’re most comfortable. One other thing: keep your wires out of the way when you can. Plan this way ahead while setting up your furniture. Badly installed wires can cause fires.


Freelancers: Registration & Basics 


Tools of the Trade

Organize Your Files

Once you know what equipment you have and need, make some space in your workplace to keep them safe from the elements. Your computer must be set up in a manner where you don’t feel cramped.

The next thing you need to do is organize your papers. If you registered with the BIR, you may already have your Certificate of Registration, also known as the BIR Form 2303, among others (page 7). Keep your books of accounts on a dedicated shelf. You will need to look at them periodically, especially now that you are required to pay income taxes (Full Suite Blog: Freelancer's Guide to Paying Income Tax). To prove that you’re a bonafide taxpayer, display your Form 2303 and your Ask Your Receipt Notice in a conspicuous part of your home.

Your basic tools as a freelancer are your computer/ laptop, a telephone (if applicable), and internet connection. Later on, you may decide to get a printer or scanner. If your job requires chatting online, invest in a video camera and headset. If you work with pictures or graphics, a camera and some art tools or software will be useful. Think of what services you are offering, and what tools will make your job easier. Save and invest in them as you go along.


Other business-related documents you may have on hand are client profiles, email and letter templates, proposals, directories, and other legal papers. File everything related to your services in one cabinet, your clients’ papers on another, and other materials and references in a shelf or two.


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Design Your Office Aesthetics will help your productivity at home. Here are some basic ways to do this: 1.

Assign a space for everything -- your equipment, files, etc. -- in a way that flows best for the way you work. 


2.

Make sure you've got lots of storage and keep the room free from clutter (even organized messes can silently stress the mind). 


3.

Showcase objects that interest you like books and and souvenirs so that you can continually inspire yourself throughout the day (If you have clients coming over, your literary choices may pique their interest on you.) 


4.

If you can, paint your workspace with a color that helps induce productivity or a state of relaxation. 


The key to an organized workplace is not only to maximize its functions, but also to make your surroundings pleasing to work in and visit.




Working at home has a lot of perks. Your home office will be the first step to making a giant step for your freelancing career, so establish it according to your needs and preferences.

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