Online Work Isn't Just A Side Hustle Anymore—It's Feeding the Filipino Economy Too

When we think of freelancing and digital work, it’s easy to imagine big dollar paychecks, financial freedom, and all sorts of conveniences compared to traditional work. But the reality is quite different.

The State of Online Taxation 2025 report released by Taxumo shows that most online taxpayers in the Philippines are largely middle-income earners working hard to make ends meet.

According to the report, nearly half (47.5%) of digital taxpayers come from the middle-income class, while 30% are still classified as poor. In other words, the country’s growing digital workforce is being powered not by the rich, but by ordinary Filipinos working hard.

Despite not being among the country’s wealthiest, this digital workforce has become a backbone of the Philippine economy. Data from the Philippine Statistics Authority revealed that in 2024, the digital economy contributed PHP 2.25 trillion, which is equivalent to 8.5% of the country’s GDP.

We are definitely seeing a surge in the digital workforce becoming a mainstream source of income among Filipinos, particularly Gen Z and Millennials.

The report acknowledged that Millennials and Gen Z grew up with technology, making them "more inclined" in the digital space, and allowing them to easily participate. 

"As they continue to make up a larger share of active users, we can expect digital tax filing to become even more common—driven by their comfort with technology and preference for seamless, online experiences," the report said.

According to the report, Millennials continue to dominate the digital workforce, making up 66.81% of online tax filers in 2025, though their share dipped slightly from 71.23% in 2024.

On the other hand, Gen Z is quickly catching up, climbing from 17.94% to 22.13%. While many Gen Z earners are still starting out, they are increasingly embracing online platforms for both income and compliance.

It is worth noting, though, that Gen Z's income tax dropped from 13.01% to 12.70%. This suggests that while more Gen Z individuals are entering the formal tax system, many are still "early in their careers and earning within lower tax brackets."

The report also shows a staggering improvement when it comes to the participation of women in the digital economy: Millennial women account for 40.03%, the highest share among groups, while Millennial men follow at 25.61%. 

Similarly, among Gen Z, women also take the lead at 13.60%, compared to 7.86% for their male counterparts.

Indeed, freelancers, virtual assistants, and other digitally-driven workers are not just chasing side hustles; they are literally fuelling national growth. Their participation in the economy shows promising growth that requires attention from the government to help improve the systems that govern online jobs, as well as provide support for their compliance.

"While the surge in online taxpayer registration and gender diversity points to increased awareness and compliance, 2025 may be signaling a stabilization in growth. This makes it an ideal moment for policymakers, platforms, and the BIR to focus on deeper support: improving systems, reducing friction in compliance, and unlocking the untapped economic potential of this sector," Taxumo said.

"As the BIR aims to hit its P3.2 trillion revenue target, understanding the digital workforce’s role becomes essential," it added.