This guide is for individuals who own or lease a car or motorcycle and carry passengers on Grab or a similar ride-hailing app, with fares paid to them, full time or part time. It is not for delivery-only riders (GrabFood, GrabExpress), who carry goods rather than passengers and are not covered by Sec. 117 (see the self-employed guide); drivers paid a wage or a share by an operator who holds the franchise and collects the fares; fleets run through a corporation; or anyone already facing a BIR assessment, who should see a tax practitioner.
Which taxes a TNVS driver-operator pays
You pay two taxes: a percentage tax on fares and an income tax on profit.
Percentage tax, 3% of fares (Sec. 117). As amended by the Ease of Paying Taxes Act, Sec. 117 covers "transportation contractors, including persons who transport passengers for hire, and other domestic carriers by land for the transport of passengers", who "shall pay a tax equivalent to three (3%) of their quarterly gross sales" (RA 11976). The BIR's own Form 2551Q lists it as tax type PT 040, "Domestic carriers and keepers of garages (Sec. 117)", 3%. This is not the Sec. 116 tax for small non-VAT businesses (PT 010), and it has no ₱3,000,000 ceiling in its text.
Income tax, graduated rates. Net income is taxed under the 2023 graduated table (NIRC Sec. 24(A)(2)): 0% up to ₱250,000, then 15% to 35%. Net income is fares minus itemized, receipted expenses, or fares minus the 40% Optional Standard Deduction, which needs no receipts (NIRC Sec. 34(L)).
Why not 8%? The 8% option replaces graduated rates and "the percentage tax under Section 116" only (RA 10963). Because a passenger carrier's percentage tax falls under Sec. 117, RR 8-2018 shuts the 8% option for them. Electing 8% on a return does not remove the 3% Sec. 117 tax.
How much: worked example for ₱720,000 of fares
Inputs (illustrative driver-operator, 2026): ₱720,000 of passenger fares for the year, spread evenly over four quarters. Documented expenses (fuel, maintenance, insurance, depreciation, other receipted costs) of ₱430,000. No other income.
| Item | Working | 40% OSD | Itemized expenses |
|---|---|---|---|
| Percentage tax, Sec. 117 | ₱720,000 x 3% | ₱21,600 | ₱21,600 |
| Net income | ₱720,000 minus ₱288,000 OSD, or minus ₱430,000 | ₱432,000 | ₱290,000 |
| Income tax, 2023 table | ₱22,500 + 20% of ₱32,000; or 15% of ₱40,000 | ₱28,900 | ₱6,000 |
| Total for the year | ₱50,500 | ₱27,600 |
Each quarter's percentage tax is ₱5,400 (3% of ₱180,000). Itemizing saves ₱22,900 here because expenses run at 60% of fares, well above the 40% OSD. If your receipted costs are below 40% of fares, the OSD gives the lower tax. Test your own figures on the income tax calculator and the percentage tax calculator.
Under the 8% formula, the same driver would have computed (₱720,000 minus ₱250,000) x 8% = ₱37,600 with no percentage tax. A driver who files that way underpays by the whole ₱21,600 of Sec. 117 tax and pays income tax under a regime the rules do not allow.
The base for both taxes is the fares from your trips, not your profit after fuel. We have not found a BIR issuance that says whether Grab's commission is part of a driver's gross sales, so this example uses fares as the input and takes no position on the commission.
Driving part time next to a job
If you also earn a salary, your salary and your driving profit are both taxed under the graduated table, and you still pay the 3% Sec. 117 tax on fares. Because the 8% option is closed to Sec. 117 taxpayers anyway, the mixed income rules for 8% do not help you. You file Form 1701, which covers mixed income earners (BIR Form 1701).
What you file and when
| Return | Covers | Deadline | Source |
|---|---|---|---|
| Form 2551Q, ATC PT 040 | 3% Sec. 117 tax on the quarter's fares | April 25, July 25, October 25, January 25 | NIRC Sec. 128 (RA 11976); BIR schedule |
| Form 1701Q | Quarterly income tax, Q1 to Q3 | May 15, August 15, November 15 | BIR schedule |
| Form 1701A (purely driving income with OSD) or Form 1701 (itemized or mixed income) | Annual income tax | April 15 of the following year | Form 1701A; NIRC Sec. 51(C)(1) |
Registration costs the ₱30 documentary stamp tax on your Certificate of Registration (BIR Form 1901). The ₱500 annual registration fee that some help pages still mention "was also removed under the EOPT Act" (BIR EOPT flyer).
Next steps
- Get a TIN if you have none (how to get a TIN) and register as self-employed (BIR registration guide).
- Make sure your registration includes percentage tax under Sec. 117, then file Form 2551Q using ATC PT 040 each quarter.
- Decide OSD or itemized for the year: keep fuel and maintenance receipts in your name if you plan to itemize.
- Put the dates from quarterly tax deadlines in your phone.
How to tell it worked: each quarterly 2551Q shows ATC PT 040 and 3% of that quarter's fares, and your annual return's income tax matches the graduated-table figure for your net income. If your returns show the 8% option or ATC PT 010, correct them with your RDO before the next deadline.