Use the tax-inclusive pricing model to treat prices in Guesty as gross amounts—tax is already part of the price, and the system extracts the tax value from the total instead of adding it on top. This keeps your financial reporting accurate and simplifies managing rates across regions and channels.
Understanding the hybrid tax model
Mix inclusive and exclusive taxes for the same account or listing. For example, set up VAT as "inclusive" and already included in your pricing, and set up city tax as "exclusive" to be calculated on top of the gross amount.
- Inclusive: The tax is already inside the price. Guesty extracts the tax amount from the total. (Pilot feature)
- Exclusive: The tax is added on top of the price—the existing default.
If you combine inclusive and exclusive rules, Guesty calculates exclusive tax based on the total gross amount.
For example, if VAT is an inclusive tax in a gross amount of $400, an exclusive city tax of 5% is calculated on top of that $400, or $20.
Financial breakdowns on the guest folio
The guest folio stays consistent, regardless of whether you use inclusive or exclusive prices. Once a reservation is created, Guesty applies the correct tax logic and breaks down the total.
The folio displays the "net income" and the "tax amount" as separate lines, ensuring your accounting reports are accurate and standardized.
- VAT tax set up as 20% of accommodation fare, inclusive
- Configured accommodation fare = €240
- Base calculated as €240 divided by 20% = €200
- Tax is 20% of €200 = €40
- Local tourism tax set up as 5% of cleaning fee, exclusive
- Base = €60
- Tax calculated as €60 x 5% = €3
- Total = €63
Folio breakdown:
- Accommodation Fare (Net): €200.00
- VAT (20%): €40.00
- Cleaning Fee (Net): €60.00
- Local Tourism Tax (5%): €3.00
- Total Charged: €303.00
Adjusting inclusive taxes in the guest folio
Guesty displays all amounts in the guest folio as separate net and tax components. Because adjustments in the folio are net-based, you must calculate the net value of an adjustment before applying it. Entering a gross value directly results in an incorrect total because the system will treat that value as net and then recalculate the tax again.
Calculation formula
To ensure accurate results when making adjustments, convert the intended gross amount into a net amount using this formula:
Net = Gross ÷ (1 + tax rate)
If a nightly rate is €100 (gross, including 10% tax) and you want to remove one night:
Calculate the net adjustment: €100 ÷ 1.1 = €90.90.
Apply the adjustment: Enter -€90.90 to the Accommodation Fare.
Check the result: The system calculates the tax (€9.10) automatically, resulting in the correct gross total of €100.
Channel synchronization for inclusive taxes
To maintain consistent pricing and prevent guests from being double charged, Guesty syncs differently for inclusive taxes.
For inclusive taxes, Guesty syncs only the "gross price" (the total amount) to the channels.
What Guesty doesn't sync
Guesty does not send tax rule setups to the channel for inclusive taxes. Since the price already includes the tax, sending the rule could cause the channel to add the tax again.
Important:
You must disable taxes on the channel's extranet to match this setup and avoid double taxation.
Understand rules and limitations
- No conditional logic: Conditional taxes are not supported for tax-inclusive rules.
- Markups and discounts: Guesty calculates all markups, discounts, and promotions based on the full gross amount if you use tax-inclusive pricing.
- Hybrid compounding: Guesty calculates exclusive tax based on the total gross amount if you combine inclusive and exclusive rules.
- New tax rules or changes only affect new reservations and cannot be applied retroactively to existing ones.
- Identify your tax calculation needs: Decide which taxes are included in your rates (gross) and which are added on top (net).
- Fixed taxes: Any tax set as "inclusive" is extracted from your accommodation fare. Calculate any inclusive flat tax into your accommodation fare rates.
- Update tax rules: Access each tax rule and switch to "Inclusive" where needed.
- Review channel settings: Log in to your channel extranets (Booking.com, Airbnb, etc.) to ensure taxes are disabled to avoid double charging guests.
- Check markups and discounts: Review your current promotions to ensure they align with calculations based on gross price.
Create a new inclusive tax
Create the tax on the account level if it's relevant for all or most of your listings. If it's only relevant to specific listings, create it on the listing level.
- Sign in to your Guesty account.
- In the side navigation menu, click
Financials to open the dropdown menu. - Under Items, select Tax configurations.
- To the right, click New tax.
- Select the tax type from the dropdown.
- Under "How do you want this tax to be calculated?", select Tax included in price.
- Enter the tax settings:
- Name: Identifies the tax in Guesty. This appears as a line item in the guest folio and guest invoice.
- Tax amount: Choose a percentage or fixed amount, and enter the amount.
- Per: Determine if the tax is per night, per guest, per stay, or per guest per night.
- Invoice items to tax: If a percentage tax, choose the items to include in the calculation. For example, calculate tax out of accommodation fare only, or accommodation fare plus specific fees.
- Click Continue.
- In the top-right corner, click Save tax configuration.
- Sign in to your Guesty account.
- In the side navigation menu, click
Properties. - Click the relevant listing. (If the listing is a multi-unit, edit the main settings of the multi-unit. The changes apply to all sub-units.)
- In the side navigation menu, click Pricing & Policies, then select Tax configuration.
- If relevant, toggle off Use your account's default settings.
- To the right, click New tax.
- Select the tax type from the dropdown.
- Under "How do you want this tax to be calculated?", select Tax included in price.
- Enter the tax settings:
- Name: Identifies the tax in Guesty. This appears as a line item in the guest folio and guest invoice.
- Tax amount: Choose a percentage or fixed amount, and enter the amount.
- Per: Determine if the tax is per night, per guest, per stay, or per guest per night.
- Invoice items to tax: If a percentage tax, choose the items to include in the calculation. For example, calculate tax out of accommodation fare only, or accommodation fare plus specific fees.
- Click Continue.
- In the top-right corner, click Save tax configuration.
Change existing tax from exclusive to inclusive
Important:
Changing the tax calculation mode only affects newly created reservations. If you have taxes set up on channels, disable them to avoid double taxation.
- Sign in to your Guesty account.
- In the side navigation menu, click Financials to open the dropdown menu.
- Under Items, select Tax configurations.
- Click
to the right of the relevant tax and select Edit tax. - Under "How do you want this tax to be calculated?", select Tax included in price.
- Click Continue.
- In the top-right corner, click Save tax configuration.
- Sign in to your Guesty account.
- In the side navigation menu, click Properties.
- Click the relevant listing. (If the listing is a multi-unit, edit the main settings of the multi-unit. The changes apply to all sub-units.)
- In the side navigation menu, click Pricing & Policies, then select Tax configuration.
- Click to the right of the relevant tax and select Edit tax.
- Under "How do you want this tax to be calculated?", select Tax included in price.
- Click Continue.
- In the top-right corner, click Save tax configuration.
Tip:
After creating a new tax or changing an existing one, test the breakdown: Open a test reservation and review the Guest Folio to confirm "net income" and "tax amount" are separated correctly.