Getting Paid in USD? How Foreign Income Works Under the 8% Rate

If you invoice clients in Upwork, Deel, or straight bank transfers from abroad, that income is taxable in the Philippines as long as you are a resident citizen. The 8% rate applies to it exactly the same way it applies to peso income.

Converting to pesos

The BIR expects foreign-currency receipts to be recorded in Philippine pesos, converted at the exchange rate on the date you received the payment.

Under RMC 12-2024, the default rate is the Bankers Association of the Philippines (BAP) weighted-average reference rate for that date — the same daily figure the BSP republishes in its Reference Exchange Rate Bulletin. Other sources (Bloomberg, Reuters) are only allowed if you file a notarized sworn statement electing them, and that election is irrevocable for at least one taxable year. For almost everyone, the BAP rate is the one to use.

That is the rule for US dollars. For another currency (euros or Australian dollars, say), BIR's digest of RMC 12-2024 says the BSP's published rate is used instead, and that converting through US dollars first is superseded.

RaketTax fills in the right rate automatically for the payment date: the BAP rate for US dollars, and the BSP's published rate for euros and Australian dollars. Whichever rate ends up on the entry, be consistent and keep the evidence: a screenshot of the platform payout or the bank credit advice is enough.

Example

You receive USD 1,000 from a client on a day the rate is ₱57.20.

1,000 x 57.20 = ₱57,200 — that is the gross receipt you log for the quarter.

Common mistakes

1. Recording the invoice date instead of the payment date. Tax follows cash receipt, not billing.
2. Using one blanket rate for the whole year. Each payout gets its own rate.
3. Forgetting platform fees are not deductible under 8%. The flat rate is on gross receipts — you cannot net out Upwork's cut.
4. Using the platform's or your bank's conversion rate. The peso amount Wise or your bank actually gave you is not the figure the BIR expects. Convert the foreign amount at the official rate for the payment date, as above.

Upwork, Fiverr, Wise and Payoneer: what to keep

The rules above are the same whichever platform pays you. What changes is where you find the records. Each quarter, download and keep:

• Upwork: your transaction history for the quarter, which lists each client payment and each Upwork fee separately.
• Fiverr: your earnings and withdrawal history for the quarter.
• Wise and Payoneer: your account statement for the quarter, showing each foreign-currency payment you received.

Log each client payment in its original currency, at the official rate for its date. If you are ever asked, these statements are your proof of both the amount and the date.

Where RaketTax fits

When you log a payout in RaketTax, you enter the amount and the payment date, and RaketTax fills in the official rate for that date (you can still type your own if you need to). It stores both, so your ledger already has the peso figure — and the paper trail — before the BIR ever asks. At filing time, freelancers and small business owners can generate the 1701Q or 1701A and file through eBIRForms, or send it to the RaketTax VIP Concierge — you approve the return and a partner bookkeeper files it with the BIR for you.