Taxes and Fees FAQs

Lorena Pamplona

Updated October 26, 2026 11:59

Purpose	Understand and troubleshoot how taxes and fees are configured, applied to reservation sources, displayed in folios, and shown on invoices in Cloudbeds PMS.
Best for	Property owners, Manager/GM, Admin, and Front Desk users reviewing or troubleshooting tax and fee behavior.
Use this when	You need to understand how a tax or fee behaves, why it is missing or duplicated, how reservation sources affect taxes, whether a group booking link changes tax treatment, or how taxes and fees appear on folios and invoices.
Requirements	No special setup is required to use this reference article. Configuration changes may require the appropriate Taxes and Fees or invoicing permissions.
Expected result	You understand why a tax or fee is or is not appearing, how to fix a common configuration issue, or where to complete the related setup.
Limitations	Tax and fee behavior can depend on the reservation source, inclusive or exclusive configuration, transaction status, and invoicing experience. Some tax configurations are not supported.

Introduction

Taxes and fees in Cloudbeds PMS can behave differently depending on how they are configured, which reservation source creates the booking, whether a transaction has posted, and how the invoice is configured.

Use this FAQ to understand the most common tax and fee questions, troubleshoot unexpected behavior, and find the correct setup article when a configuration change is required.

Who this affects and how
Taxes and fees basics
Taxes and reservation sources
Taxes in folios and invoices

Who this affects and how

Tax and fee questions often involve different parts of the property workflow. Use the table below to identify the sections most relevant to your role.

Role	What to know
Front Desk	Use Taxes in folios and invoices when taxes appear missing, totals look unexpected, or a guest asks how taxes and fees are displayed.
Manager/GM	Use Taxes and reservation sources to understand why OTA, Booking Engine, or group reservations can receive different tax treatment based on configuration.
Admin	Use Taxes and fees basics and the source-configuration FAQs when creating taxes, assigning permissions, or applying taxes and fees to reservation sources.
Owner	Use the basics and invoice FAQs to understand supported tax behavior and property-level configuration decisions.

Taxes and fees basics

Use these FAQs for general tax and fee definitions, permissions, supported configurations, and setup limitations.

What is the difference between a tax and a fee?

A tax is a financial charge imposed by a government authority, for example VAT, sales tax, or ISS.

A fee is a charge in exchange for a service, for example a cleaning fee, service charge, or booking fee.

Both are configured in Finance > Taxes and Fees and follow the same general setup process.

For the complete configuration workflow, see Set Up and Apply Taxes and Fees.

How many taxes or fees can I create?

You can create as many taxes and fees as your property requires. There is no system limit.

See Set Up and Apply Taxes and Fees for the complete setup steps.

Who can set up taxes and fees?

Users need the Taxes and Fees role permission enabled to create or edit taxes and fees. By default, property owners have this access.

Owners can grant this permission to other users. See Add, edit or delete roles for the complete role-management workflow.

Can I create a tax with 0%?

No. Cloudbeds PMS does not allow a tax to be configured with a rate of 0%.

If you need a placeholder or a charge that should not add an amount, consider whether a fee with a $0 amount meets your operational need.

Can I create an inclusive flat fee per reservation or accommodation?

No. Inclusive calculation is only available when using the Percentage of total rule.

A percentage-based tax can be calculated either on top of the base price or as a component of the final price. Fixed-amount taxes and fees can only be configured as exclusive.

Taxes and reservation sources

Reservation sources determine which taxes and fees apply to different booking paths. Use these FAQs when taxes are missing, duplicated, or different from what you expected for OTA, Booking Engine, or group reservations.

Why are my taxes not being applied to OTA reservations?

Creating a tax in Finance does not automatically apply it to OTA reservations. The tax must also be connected to the applicable reservation source.

To apply a tax to an OTA source:

Click the Account Menu and go to Settings > Property > Sources > Third-Party Sources.
Find the OTA source, for example Booking.com or Expedia.
Click Configure Taxes/Fees For Source.
Select the correct tax and click Save.

Before applying taxes to an OTA source, confirm whether the OTA sends rates as tax-inclusive or tax-exclusive. Applying an exclusive tax to a source that already sends tax-inclusive rates can cause the tax to be added twice.

See Taxes and Fees - Everything you need to know for more information about inclusive and exclusive tax behavior.

Why does the OTA reservation total not match what I see in Cloudbeds?

A mismatch between an OTA total and the Cloudbeds PMS total is commonly caused by a difference in how taxes are configured on each side.

OTAs can send rates as either tax-inclusive or tax-exclusive, and the Cloudbeds configuration needs to match that behavior.

Common causes include:

Tax added twice: The OTA sends a tax-inclusive rate, but an exclusive tax is also applied to that source in Cloudbeds. The Cloudbeds total can therefore be higher than the OTA total.
Tax missing entirely: The OTA sends a tax-exclusive rate, but no tax is applied to that source in Cloudbeds. The Cloudbeds total can therefore be lower than the OTA total.
Wrong tax type: The OTA expects inclusive handling, but the tax in Cloudbeds is configured as exclusive, or vice versa.

Before making manual adjustments to the reservation, click the Account Menu and go to Settings > Property > Sources > Third-Party Sources.

Confirm that the source configuration matches the OTA's tax behavior.

See Taxes and Fees - Everything you need to know for more information.

Can I make reservations from a group booking link tax-exempt?

No. A group booking link does not create a separate reservation source for taxes and fees.

Reservations created through an Allotment Block or group booking link use the Website/Booking Engine source. Taxes and fees configured for that source therefore continue to apply to those reservations.

A private group rate controls who can access the negotiated rate, but it does not provide separate tax or fee configuration for that group.

If a specific group requires different tax treatment, the group booking link itself cannot be used to bypass the taxes and fees configured for the Website/Booking Engine source.

A private group rate changes access to the negotiated rate. It does not change the Website/Booking Engine reservation source used to determine taxes and fees.

Taxes in folios and invoices

Taxes may appear differently depending on whether you are reviewing a reservation folio or a generated invoice. Expand the relevant question below to troubleshoot missing tax lines, understand tax calculations, or control how tax and fee details appear on invoices.

Why do taxes look missing in the reservation folio?

If you open a reservation folio and do not see tax line items, you may be viewing posted transactions only.

Taxes associated with future room nights remain pending transactions until the corresponding room rate is posted, so they do not appear when the folio is filtered to Posted only.

To review the full tax breakdown:

Open the reservation and go to the Folio tab.
In the Transactions filter, change the view from Posted to include Pending transactions.
Review the tax line items alongside the pending room charges.

If taxes still do not appear when both Posted and Pending transactions are visible, review the tax configuration for the reservation source under Account Menu > Settings > Property > Sources. The tax may not be applied to that source.

How will taxes and fees appear on a guest invoice?

On the invoice summary, taxes and fees appear separately from the room rate total. By default, the summary shows the combined total for all taxes and the combined total for all fees.

If you want each individual tax and fee type to appear separately on the invoice, enable Show tax/fee specifics on the invoice.

Click the Account Menu and go to Settings > Finance.
Select the Invoicing tab.
Click Invoicing Settings.
Enable Show tax/fee specifics on the invoice.
Click Save.

The example below shows the invoice summary with combined Taxes and Fees totals.

When tax and fee specifics are enabled, the invoice also shows the individual tax and fee transactions in the detailed section.

This setting applies only to invoices generated after the change is saved. Existing invoices are not updated retroactively.

For the complete invoicing configuration workflow, see How to set up invoicing.

Which price is my exclusive percentage tax charged on?

Each exclusive percentage tax or fee has its own setting, What is this tax/fee charged on?, under Finance > Taxes and Fees.

This setting determines whether the tax or fee is calculated using:

Net: The price without inclusive taxes and fees.
Gross: The full price, including inclusive taxes and fees.

New taxes and fees use Net by default.

For more information, see Choose what price an exclusive percentage based tax or fee is charged on.

Did my existing tax amounts change?

No. Each existing tax or fee retained its previous calculation setting, so the amounts charged to your guests did not change.

If I change the setting, do existing reservations change?

No. Changes to the tax or fee calculation setting apply to new charges only.

Charges already posted to a reservation are not recalculated and retain their original amounts.

A tax amount looks wrong. What should I check?

If an exclusive percentage tax or fee is not calculating as expected, review its configuration and calculation base.

Go to Account > Settings > Finance > Taxes and Fees and open the tax or fee.
Confirm that it is configured as Exclusive and uses either the Percentage of total or Rate-based percentage calculation rule. If it uses another calculation type, this setting does not apply.
Check What is this tax/fee charged on? and verify the selected calculation base:
- Net: The rate with all inclusive taxes and fees removed.
- Gross: The full rate, including inclusive taxes and fees.
Recalculate the expected tax or fee amount using the selected option.
Check whether the tax is configured to apply on top of another tax or fee. If so, it is calculated using that tax or fee's amount rather than the room rate.
If the charge comes from an add-on or was posted manually, remember that these taxes and fees are always calculated using the price including inclusive taxes and fees.
If you recently changed the calculation setting, check when the affected charges were posted. Previously posted charges retain their original calculation.

For more information about the calculation options, see Choose what price an exclusive percentage based tax or fee is charged on.

Which option should I choose?

The appropriate calculation option depends on your property's local tax requirements and applicable regulations.

Consult your accountant or local tax authority to determine whether your tax should be calculated using Net or Gross.

Cloudbeds cannot provide tax advice.

Now that you understand the most common tax and fee behaviors, review this resource for a more advanced tax setup scenario that may apply to specific property requirements: