Taxes and Fees - Everything you need to know

Lorena Pamplona

Updated July 01, 2026 15:30

Purpose	Explains how taxes and fees work in Cloudbeds PMS, including the two-step setup process, the available configuration options, and how taxes apply to OTA reservations.
Best for	Property owners, admins, and managers setting up or reviewing tax configuration
Use this when	You're new to taxes and fees in Cloudbeds, reviewing your current setup, or trying to understand why OTA reservation totals don't match what you see in Cloudbeds PMS
You need	Admin or owner access to Cloudbeds PMS settings
Expected result	You understand how taxes and fees work in Cloudbeds, know what configuration steps are required, and can identify the right setup guide for your property's needs
Important limit	Creating a tax or fee does not automatically apply it to reservations. You must complete a second step to apply it to the correct reservation sources or products.

Overview

The Taxes and Fees section in Cloudbeds PMS lets you configure sales taxes, tourism fees, service charges, and other mandatory or optional charges for reservations and products at your property.

Taxes and fees can be used to:

Apply taxes to reservations
Apply taxes to products and services
Apply taxes only to specific accommodation types
Apply taxes only during specific date ranges
Apply taxes based on the nightly room rate (rate-based dynamic tax)
Include taxes within the room rate or add them on top as a separate charge

How taxes and fees work in Cloudbeds

Setting up taxes and fees always requires two separate steps:

Create the tax or fee in Finance > Taxes and Fees.
Apply it to the reservation sources and/or products in Property Settings where it should be used.

Creating a tax or fee does not apply it automatically. After creating a tax or fee, you must go to Property > Sources and apply it to the correct reservation sources. Until you complete this step, new reservations will not include the tax.

Once applied, new reservations and products will include the configured tax or fee based on its settings. If you apply a tax to a source that already has future reservations, Cloudbeds PMS may prompt you to recalculate those reservations so the new tax configuration takes effect.

Where taxes and fees can be applied

Depending on your property's requirements, taxes and fees can be applied in different ways.

Reservations

Taxes applied to reservation sources are automatically added to qualifying reservations. Common examples include VAT, sales tax, occupancy tax, and tourism tax.

To apply a tax to reservations, you assign it to one or more reservation sources in Property > Sources. Each source, such as Booking.com, Expedia, or your Booking Engine, can have its own tax configuration.

Products and services

Taxes can also be applied to products and services sold through Cloudbeds PMS, such as restaurant charges, spa services, or retail items. You assign these taxes directly on the product in Settings > Products .

Specific conditions

Taxes and fees can also be set to apply only under specific conditions:

By accommodation type - useful when different room types have different tax requirements
By date range - useful for seasonal taxes or temporary fees
By nightly rate (rate-based) - useful for GST-style taxes where the percentage depends on the room rate

Inclusive and exclusive taxes

When you create a tax or fee, you choose whether it's inclusive or exclusive. This setting changes how the tax amount is calculated and displayed.

	Exclusive tax	Inclusive tax
How it works	Tax is added on top of the room rate	Tax is already included within the room rate
Room rate shown	Pre-tax amount	Tax-inclusive amount
Guest pays	Room rate + tax on top	Room rate only (tax already inside)
Common use	US properties, occupancy taxes	European properties, VAT-inclusive rates

Both types appear as separate line items in the reservation folio and on guest invoices, so guests and accounting teams can always see the tax breakdown.

OTA reservations and taxes

If your property receives reservations from Online Travel Agencies (OTAs) such as Booking.com, Expedia, Agoda, or Priceline, it's important to align your tax configuration in Cloudbeds PMS with how each OTA sends rates.

OTAs can send rates in two ways:

Tax-inclusive - the rate already includes taxes. Cloudbeds PMS should not add taxes on top.
Tax-exclusive - the rate does not include taxes. Cloudbeds PMS should add taxes separately.

Why OTA totals may not match Cloudbeds

If your OTA sends tax-inclusive rates but Cloudbeds PMS is set to apply taxes on top (exclusive), the reservation total in Cloudbeds will be higher than what the OTA shows, because tax is being added twice. The reverse is also true: if the OTA sends tax-exclusive rates but no tax is applied in Cloudbeds, the reservation total will be lower than expected.

Before making manual adjustments to any reservation, review your source tax configuration to confirm the setup matches the OTA's behavior.

To check or update your OTA tax configuration, go to Account > Settings > Property > Sources > Third-Party Sources and select Configure Taxes/Fees For Source next to the relevant OTA.

Once taxes are configured to the reservation sources, they will be applied to the reservation according to the configuration and displayed on Folio as the example below:

Taxes showing as missing in the folio? If you don't see tax line items in a reservation folio, check whether you're viewing Posted transactions only. Taxes on upcoming room nights appear under Pending transactions until the room rate is posted. Switch the folio filter to show both Posted and Pending transactions to see the full breakdown.

Common tax configuration scenarios

Scenario	Recommended configuration
VAT applies to all reservations	Percentage-based exclusive or inclusive tax applied to all sources
Tourism fee applies only during a specific season	Tax by date range
Resort fee applies only to selected room types	Tax by accommodation type
Government tax varies depending on the nightly room rate	Rate-based (dynamic) tax
OTA sends tax-inclusive rates (e.g. Booking.com in some markets)	Set tax as inclusive on that source, or apply no exclusive tax to that source
OTA sends tax-exclusive rates (e.g. Expedia in some markets)	Apply exclusive tax to that OTA source in Property > Sources

Next steps

Use the guides below to complete your tax setup or find answers to specific questions.

Guide	Use this when
Create and apply taxes and fees	You need to create a new tax or fee and apply it to reservation sources or products
Set up advanced tax options	You need to apply taxes by date range, by accommodation type, or using a rate-based (dynamic) rule
Set up and manage the convenience fee	You want to configure a convenience fee for your booking engine or specific sources
Taxes and fees FAQ	You have a specific question about tax behavior, OTA reservations, folios, or invoices