Create all your different types of Taxes and Fees on Cloudbeds PMS, based on your property requirements.
This article explains which are these Taxes and Fees, a complete description of the available types and the difference between each one of them.
Exclusive/Inclusive Taxes and Fees
When the tax/fee is not included in the rate. Example: If you enter a rate of $100 and set up a tax of 10%, the guest will pay $110. This is because the tax/fee is not included in the rates you have entered. Your 10% tax has been added to the rate.
Configuration:
- Room Rate set: $100
- Tax: 10%
Result:
- Room Rate: $100
- Tax: $10
- Total: $110
When the tax/fee is already included in the rate. Example: If you enter a rate of $100 and set up a tax of 10%. The guest will pay $100 because the tax/fee is included in the rate. They will see on their booking summary that 10% of the $100 they paid was the tax.
Configuration:
- Room Rate set: $100
- Tax: 10%
Result:
- Room Rate: $90.91
- Tax: $9.09
- Total: $100
Here is another example of the difference between exclusive/inclusive taxes and how it appears on guest's folio: For the Exclusive Tax, the reservation total is higher (55,00) since the taxes are added on top of this amount. The Inclusive Tax shows everything included in the reservation total.
It is not possible to create an inclusive flat fee/tax per reservation/per accommodation in Cloudbeds PMS.
By setting the tax as inclusive, the system takes the total room rate of $100 and calculates what the rate would need to be to reach the total of $100 when a 10% tax is applied.
In the example above, the inclusive tax is calculated as 10% of the actual room rate (10% of 90.91, which adds up to 100).Here is the formula for this calculation:
- Tax excluded price = Total item price / ((tax rate /100) + 1 )
Example:
- 100 / ((10/100) +1 ) = 90.91
Read this detailed article from an accounting website about calculating inclusive and exclusive taxes.
Fixed Taxes and Fees
The system will apply a fixed amount of the tax/fee under each room night/item. It can also be an inclusive or exclusive tax/fee.
This type of fee/tax can be only an exclusive tax and the system will apply a fixed amount based on the number of accommodations existing in the reservation. If this Fixed Per Accommodation tax is changed to Inclusive, the system will change it back to Exclusive automatically by default.
- Example: If you have 2 accommodations under the same reservation, the system will apply the tax twice on the guest's folio, regardless of the room nights quantity:
This type of fee/tax can only be exclusive as well, and the system will apply a fixed amount to each reservation.
- Example: If you have 2 accommodations under the same reservation, the system will apply the tax once on the guest's folio, regardless of the room nights quantity or number of accommodations.
Other Taxes and Fees
The system will calculate the percentage of the tax/fee based on the total amount of each daily rate.
- This type can be Inclusive or Exclusive.
- If it's a tax, you can charge this tax on top of any existing fee.
Here is an example of a 10% exclusive fee of total amount:
Per Person/Per Night option means that the number of adults and children is multiplied by the number of room nights. If this type is selected, you can choose whether this tax/fee should be applied to adults only or adults and children.
For each check box selected, the system will display a field to enter the tax/fee value, so the amount for children can be different from adults.
- Currently it will only be offered as an exclusive tax/fee
- It's not possible to apply the per person per night reservation's tax/fee only for children. The user needs to apply it for Adults + Children or only for Adults only.
- Only a fixed amount will be allowed
- The per person per night tax/fee can only be calculated for reservations at this time
Set a Max Length Rule for the Per Person/Per Night Tax
Indicate if your percentage of total amount tax has a maximum length to be applied.
- Selecting No means that the per person tax/fee will charge daily for the entire length of a guest’s stay.
- If Yes is selected in the max length option, you can add a max length of nights, which means that the tax will only be calculated for a specified number of days. After this, the tax would stop applying.
Rate-Based Tax, or Dynamic Tax, helps to serve the properties who are required to charge the GST tax according to the law (for example, in India). This tax percentage is calculated depending on the nightly room rate.
For detailed information on how to setup this tax type, see: Rate-Based Tax (Dynamic Tax)
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