| Purpose | Explains how to choose, for each exclusive percentage based tax or fee, whether it is charged on the price without inclusive taxes and fees or on the price including them. |
| Best for | Property owners and admins who set up taxes and fees |
| Use this when | A local tax, such as a city tax or visitor levy, must be calculated on a specific price. Also use it when a tax amount looks different from what you expected. |
| You need | Owner or admin access to Cloudbeds PMS. The Taxes and Fees role permission must be enabled for your user. |
| Expected result | Each exclusive percentage based tax or fee is calculated on the price your local rules require. |
| Important limit | Changing the setting affects new charges only. Charges already posted to a reservation stay as they are. |
You can now choose, for each exclusive percentage based tax or fee, whether it is charged on the price without inclusive taxes and fees (Net) or on the price including them (Gross). Before this change, a single property-wide setting that you could not see or change decided this for every exclusive tax and fee. Now you can set each tax or fee to match its own rule.
Why this matters
Many rates already include a tax, such as VAT. When you add another percentage tax on top, local rules decide which price it is calculated on. Some taxes are charged on the price without VAT, and others on the full price. With this setting, you can match each tax or fee to its rule.
Set what a tax or fee is charged on
- Go to Account
> Settings
> Finance
and click the Taxes and Fees tab.
- Click + New tax or fee, or open an existing tax or fee to edit it.
- Set the tax to Exclusive (leave Included in price unchecked) and set the rule to Percentage of total or Rate-based percentage.
- Under What is this tax/fee charged on?, choose one option:
- Price without inclusive taxes and fees (Net): the tax is charged on the rate after all inclusive taxes and fees are removed. This is the default for new taxes and fees.
- Price including inclusive taxes and fees (Gross): the tax is charged on the full rate, including inclusive taxes and fees.
- Click Save.
Hover over the question-mark icon next to the heading to see when the setting applies. Hover over the icon next to each option to see a worked example.
[Screenshot: the What is this tax/fee charged on? options in the tax setup window]
Example
A rate of $110 includes a 10% inclusive tax, so the price without that tax is $100. You add a 5% city tax.
| City tax charged on | Calculated on | Guest pays for city tax |
|---|---|---|
| Price without inclusive taxes and fees | $100.00 | $5.00 |
| Price including inclusive taxes and fees | $110.00 | $5.50 |
When the setting applies
The What is this tax/fee charged on? setting appears only on exclusive taxes and fees that use the Percentage of total or Rate-based percentage rule.
It does not apply to:
- Inclusive taxes and fees
- Fixed-amount taxes and fees
- Add-ons, and manually posted taxes and fees. These are always calculated on the price including inclusive taxes and fees.
- A tax or fee charged on top of another tax or fee. It is calculated on the amount of that tax or fee. See Compound Taxes (Tax on Tax).
What happens to my existing taxes and fees?
Nothing changes in what your guests are charged. Each existing tax and fee already shows the option it was using, so you do not need to take any action. New taxes and fees start on Price without inclusive taxes and fees.
If you change the option, it applies to new charges only. Charges already posted to a reservation stay as they are.
Frequently asked questions
Which option should I choose?
It depends on your local tax rules. Ask your accountant or local tax authority. Cloudbeds cannot give tax advice.
Will my current tax amounts change?
No. Existing taxes and fees keep the option they were already using, so what your guests are charged does not change.
A tax amount looks wrong. What should I check?
- Go to Account
- Check What is this tax/fee charged on? and recalculate. Net is the rate with all inclusive taxes and fees removed. Gross is the full rate.
- Check whether the tax is charged on top of another tax or fee. If so, it is calculated on that tax or fee's amount, not on the rate.
- If the charge came from an add-on or a manual posting, it is always calculated on the price including inclusive taxes and fees.
- If the option was changed recently, older posted charges keep the previous calculation.
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