The IRS assumes everyone getting paid by a US company owes US taxes. That’s the default.
Form W-8BEN is how your Filipino remote worker proves they’re not a US person.
It tells the IRS: “I live in the Philippines. I work in the Philippines. I’m not subject to US withholding.”
Without this form, you legally have to withhold 30% of every payment. That’s not optional.
With it, you withhold nothing. The US-Philippines tax treaty drops that rate to 0% for services performed outside the US.
Let me walk you through exactly how this works.
The Actual Form (Line by Line)
Download the form from IRS.gov. Search “Form W-8BEN” and grab the October 2021 version.
Your remote worker can fill it out digitally or print and scan it. Either works. They sign it, date it, and send it back to you as a PDF.
Here’s what goes where.
Part I: Basic Information
Line 1: Full Legal Name
This needs to match their government ID exactly. Not a nickname. Not how they sign emails. Their actual legal name.
Juan Dela Cruz, not “JD.”
Line 2: Country of Citizenship
Philippines.
Line 3: Permanent Residence Address
Their real address in the Philippines. Street, city, postal code, then “Philippines.”
No PO boxes. No US addresses (even if they have family there). The IRS will reject it.
Line 4: Mailing Address
Only fill this if their mailing address is different from where they live. Most people skip this line.
Line 5: US Taxpayer Identification Number
Almost every Filipino remote worker leaves this blank. They don’t have a US Social Security Number or ITIN, and they don’t need one.
Line 6a: Foreign Tax Identifying Number
This is their Philippine TIN. It’s a 12-digit number issued by the Bureau of Internal Revenue.
If they don’t have one, they can get it free through BIR eRegistration. It takes about a day.
If they genuinely don’t have a TIN and can’t get one, they check box 6b that says “FTIN not legally required.” But this might cause issues with claiming treaty benefits, so getting the TIN is better.
Line 7: Reference Number
This is optional. Some companies use it for internal tracking (like “Contractor-001”). Your remote worker can leave it blank unless you specifically ask them to fill it.
Line 8: Date of Birth
Format it as MM-DD-YYYY.
Part II: The Part That Actually Matters
This is where the 30% withholding drops to 0%.
Line 9: Country
Philippines.
Line 10: Treaty Article and Rate
This is the line that saves everyone money.
Your remote worker should write: “Philippines, Article 14, 0%”
Article 14 covers “Independent Personal Services.” That’s contractor work. Article 7 (“Business Profits”) also works if they’re operating as a business entity.
The rate is 0% because they’re performing services in the Philippines, not in the US.
If this line is blank, you’re back to withholding 30%. Don’t skip it.
Part III: Sign and Date
Your remote worker signs under penalty of perjury. They’re certifying they’re not a US person and everything above is accurate.
They date it (MM-DD-YYYY format) and send it to you.
Done.
What a Completed Form Looks Like
Here’s a quick example:
Line 1: Maria Santos
Line 2: Philippines
Line 3: 123 Barrio Street, Quezon City 1100, Philippines
Line 6a: 123-456-789-000
Line 9: Philippines
Line 10: Philippines, Article 14, 0%
Signature and date at the bottom
That’s it. Not complicated once you know what goes where.
Some Common Mistakes To Keep In Mind
I’ve seen the same errors over and over.
Using a US Address
Some remote workers put a relative’s US address thinking it looks more “official.” The IRS sees that and treats them as a US person. Now you’re withholding 30% when you shouldn’t be.
Always use their actual Philippine address.
Mismatched Names
Their legal name on the form has to match their tax records exactly. “Maria” vs “Maria Luisa” will trigger a rejection.
Missing Line 10
This is the treaty benefit line. Without it, the form doesn’t do much. You’ll still be withholding.
No TIN
Some remote workers skip Line 6a because they don’t have a Philippine TIN yet. Get them to register for one. It’s free and fast, and it prevents headaches later.
Expired Forms
W-8BEN is valid for three years. After that, you need a new one. Set a reminder.
The Cost of Getting This Wrong
Let’s say you’re paying your remote worker $3,000 per month.
Without a proper W-8BEN, you’d withhold $900 every single month.
That’s $10,800 per year—money your contractor shouldn’t lose and you shouldn’t have to process.
This applies whether you’re paying one person or building an entire team. The form works the same way.
When You Need to Collect a New One
Three situations:
Every three years (forms expire)
When their address changes
When their circumstances change (like if they move to the US)
Set a calendar reminder for 60 days before the three-year mark. Email your remote worker and ask for a fresh form.
If they’re still at the same address with the same details, they just re-sign and re-date. Takes two minutes.
Your Responsibilities as the Employer
You’re required to:
Collect Before First Payment
Not after. Before.
Validate the Information
Check that the name matches, the address is in the Philippines, and Line 10 is filled out.
Store It Securely
The IRS can audit you and ask to see these forms.
Pay the Correct Amount
With a valid W-8BEN claiming treaty benefits, you withhold nothing.
Don’t Issue a 1099
Foreign contractors performing services abroad don’t get 1099s.
File Form 1042-S Only If You Withheld Taxes
If the W-8BEN is done right, you won’t withhold anything, so you won’t file this.
Some tools like ManagePh can help you manage these forms especially If you’re hiring a lot of remote workers, that’s worth looking into.
Quick Checklist Before You Send Payment
Here’s what to verify before you pay your Filipino remote worker for the first time:
You have a signed, dated W-8BEN on file
Line 1 matches their legal name exactly
Line 3 shows a Philippine address (not US)
Line 6a has their Philippine TIN
Line 9 says “Philippines”
Line 10 says “Philippines, Article 14, 0%”
The form is less than three years old
You’ve saved it somewhere secure
If all those boxes are checked, you’re good. Pay the full amount.
What Happens If You Skip This
The Withholding Scenario
You withhold 30% of every payment. Your remote worker loses a huge chunk of their income.
You have to hold that money and remit it to the IRS.
Then your remote worker has to file for a refund, which can take months. It’s a mess for everyone.
The Audit Scenario
Or you don’t withhold, and the IRS audits you. Now you’re on the hook for penalties and back taxes.
Neither option is good.
Just get the form upfront. It takes 10 minutes.
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