Pilot: Adjusting the guest folio with tax per line item (new version)

Since the guest folio is a financial record of a reservation, line items cannot be deleted or removed. You can change the price of an existing line item, like the accommodation fare or an additional fee, and you can add a new line item. Values can be entered as a positive or negative amount.

How taxes behave during adjustments

When you adjust or add a line item, Guesty automatically calculates the related taxes based on the listing's tax settings (tax-inclusive, tax-exclusive, or mixed).

Except when using a standalone total tax adjustment, the total tax on the folio equals the sum of all individual line-item taxes.

Adjusting a taxable base price

When adjusting a base amount (such as an accommodation fare or fee), taxes calculate according to the tax setting:

• Tax-exclusive: Guesty adds tax on top of the entered amount. For example, adding a $50 fee with a 10% exclusive tax results in a total guest charge of $55.

• Tax-inclusive: Guesty treats the entered amount as the gross total and reverse-calculates the net price and tax. For example, applying a -$100 discount with a 10% inclusive tax reduces the net price by -$90.91 and tax by -$9.09.

• Mixed taxes: For items with both inclusive and exclusive taxes, Guesty calculates the inclusive tax from the entered amount, then applies the exclusive tax rate to that same amount.

Calculation examples

The table below illustrates how Guesty calculates line items across different tax configurations:

Add or adjust a base line item

To add a new line item or adjust an existing base charge, such as accommodation fares or add-on fees, follow the steps below.

Step by step:

1. Sign in to your Guesty account.
2. In the side navigation menu, click Reservations.
3. Select the relevant reservation.
4. In the left submenu, click Guest folio and invoice.

5. Perform your desired action:

   • To adjust an existing item: Click Adjust line item. Select the line item, and enter the positive or negative adjustment amount.

   • To add a new item: Click Add line item. Select the item category, and enter the total amount.

6. Review the tax breakdown preview displayed in the side panel to verify how inclusive or exclusive taxes are calculated. 

7. Under "Realization date", choose one of the following:

   1. Enter the realization date to recognize the full amount as revenue on a specific day.

   2. Select Break the amount to be realized nightly to spread the adjusted amount across each night of the reservation.

8. Click Adjust or Add.

Adjust a specific tax amount

To apply custom tax exemptions or resolve small rounding discrepancies without altering revenue reports, adjust individual tax amounts directly without changing the base price.

Supported items for tax adjustments

You can perform tax-only adjustments on the following items:

• Accommodation fare: Tax on base accommodation fares, markups, extra person fees, discounts, promotions, and coupons.

• Other line items: Tax on additional fees, such as breakfast, parking, and cleaning.

• Markup on fees: Total tax amount adjustments.

To adjust individual line item taxes directly, follow the steps below.

Step by step:

1. From the dropdown, select the tax you want to adjust (e.g., "City tax").
2. Select the specific line item the tax applies to (e.g., "Breakfast").
3. Enter the amount to add or deduct in the "Adjust by" field. The "Expected amount" will update in real time.
4. Enter a description or reason.
5. Under "Realization date", choose one of the following:

   1. Enter the realization date to recognize the full amount as revenue on a specific day.

   2. Select Break the amount to be realized nightly to spread the adjusted amount across each night of the reservation.

6. Click Adjust.

Adjust total tax across the folio

When adjusting a total tax (lsuch as "Total VAT"), you have two options for how the change is applied.

Option 1: Distribute the adjustment across all items (Default)

This option distributes the adjustment proportionally across all line items with that tax, ensuring individual tax lines match the new total.

1. From the dropdown, select the total tax to adjust.
2. Enter the amount to add or deduct.
3. Enter a reason.
4. Under "Realization date", choose one of the following:
   1. Enter the realization date for when the full amount is recognized as revenue.
   2. Click Break the amount to be realized nightly to have the adjusted amount realized across each night of the reservation.
5. Click Adjust.

Option 2: Add as a standalone adjustment

This creates a separate line item named "Total Tax Adjustment – Manual". Use this option to balance the folio for tax filings without altering the history of original line items.

1. From the dropdown, select the total tax you want to adjust.
2. Enter the amount to add or deduct.
3. Turn on the Add as a standalone adjustment toggle.
4. Enter a mandatory reason for the adjustment.
5. Under "Realization date", choose one of the following:
   1. Enter the realization date for when the full amount is recognized as revenue.
   2. Click Break the amount to be realized nightly to have the adjusted amount realized across each night of the reservation.
6. Click Adjust.