How to Calculate and Record Your Management Fee
Your management agreement says “20% commission”. Your owner reads that one way, you read it another, and the first time the two of you notice is when the monthly statement lands and the number is a few hundred short of what they expected.
The percentage is rarely the argument. The base is. Twenty percent of what the guest paid and twenty percent of what the channel actually sent you are different numbers, and on a busy month the gap is real money. This guide walks through the choices, shows how each one changes what the owner is paid, and explains how Airflow calculates and records the fee so you never work it out by hand again.
This is general information about how Airflow records a management fee. It is not accounting or tax advice. How your fee should be treated for tax, and whether owner funds need trust accounting where you operate, is a question for your accountant.
Why “20%” is not a complete sentence
Every booking passes through several numbers before any of it reaches the owner:
- Gross revenue is what the guest paid for the stay.
- Channel or platform commission is what the booking channel keeps. On a channel booking it is the difference between what the guest paid and what the channel pays out. We covered how large that slice gets in What Your Channel Commission Actually Costs.
- Net payout is what is left after that commission: the money that actually arrives.
- Expenses are what you spend running the property on the owner’s behalf: cleaning, repairs, supplies, utilities.
A management fee can be charged on the first number or on the third. Which one you pick matters more than whether the rate is 18% or 22%, and a lot of agreements never say.
The same month, three ways
Take an illustrative month at Villa 1. Guests paid 10,000. The channels kept 1,500, so the net payout was 8,500. You spent 600 on cleaning and a repair. The fee is 20%, or a flat 1,200 for comparison.
| Fee charged on | Management fee | Expenses | Net to owner |
|---|---|---|---|
| 20% of gross revenue | 2,000 | 600 | 5,900 |
| 20% of net payout | 1,700 | 600 | 6,200 |
| Flat 1,200 per month | 1,200 | 600 | 6,700 |
(Figures are illustrative, not from any real property.)
In every row the owner’s figure is the same sum: net payout, minus your management fee, minus expenses. Only the fee changes. Charging on gross means you are paid on money the owner never received, because the channel kept it. Charging on net payout means you and the owner share the cost of the channel. A flat fee ignores both, which suits some arrangements and upsets others in a slow month.
None of these is the “right” answer. What is wrong is leaving it unwritten. Put the base in the agreement, in words: “20% of net payout”.
Percentage or flat?
- A percentage grows and shrinks with the property. You earn more in peak season, the owner pays less in a quiet month, and nobody renegotiates in January.
- A flat fee is predictable for you. It suits a property that is mostly owner-occupied, or a service agreement where you do the same work whatever the occupancy.
- Both at once is common: a percentage for managing bookings, plus a fixed monthly charge for software, insurance or a retainer. Keep them as separate lines so the owner can see each one.
Setting your management fee in Airflow
Airflow calculates the fee for you every time it builds a statement. You set the rule once.
In the portal, open Org Settings and choose Owner statements from the row of buttons at the top. On that page you will find two settings.
Default management commission (all properties)
This is your standard rate for the whole portfolio. Choose a Type (Percentage or Flat (USD / period)), enter the Value and, for a percentage, pick what it is Charged on: Net payout or Gross revenue. Then Save default. Every property without its own fee uses this.
Management fee for this property
Some owners negotiate. Pick the property at the top of the page, then set its own Type, Value and Charged on under Management fee for this property and Save fee. That rule overrides the default for this property only. Leave it on No fee and the property falls back to the default.
Recurring charges for this property
Fixed monthly costs, such as a software fee, an insurance retainer or a fixed management fee on top of the percentage, go under Recurring charges for this property. Give each one a label and a category, choose a flat amount or a percentage of payout or gross, and Airflow adds it as its own line on every statement for that property.
How the fee is recorded
When you Generate statement for a property and a month, Airflow collects every booking that checked out in that month, leaving out cancelled ones, and lays out the arithmetic in the same order every time:
- Gross revenue
- Channel / platform commission (subtracted)
- Host payout
- Management fee (subtracted, calculated from your rule)
- Manager fees & expenses (subtracted, itemised underneath)
- Net to owner
You never type the fee in. It is calculated from the rule, so changing a rate and regenerating a draft statement gives you the new figure. The statement stays a draft until you Finalize it. After that it is locked, and you have to Reopen it before it can be regenerated. The owner sees the finalised statement read-only. The full statement workflow, including forwarding receipts in as expenses, is covered in Owner Statements That Write Themselves.
Your fee never appears on the guest’s invoice
The management fee is between you and the owner. It sits on the owner statement and nowhere else. When Airflow drafts an invoice for a booking, the invoice is built from the booking itself, and by default a direct booking’s invoice shows what the guest actually paid. Your management fee plays no part in it. A guest never sees how the money is split behind the stay.
A booking agent’s fee is not your management fee
Airflow also has an Agent fee field on a booking. It is for a third party, such as a travel agent or a concierge, who sent you that one guest and is owed a commission for it. You add it, with the Agent name, when you add a booking by hand or in the Booking value & payout card on the booking. It can be a percentage or a flat amount.
An agent fee reduces that booking’s payout. So if your management fee is charged on Net payout, the agent’s commission comes off first and your fee is worked out on what remains, and the owner’s statement reflects it without any extra step. The bookings financial PDF also totals what you owe each agent under Agent commissions payable.
Keep the two apart: use the agent fee for commission owed to someone else on one booking, and the management fee for your own share of the whole month.
Honest scope
- Statements are calculated in US dollars, and a flat fee is entered in USD. Multi-currency owner statements are not built yet.
- The fee is charged on gross revenue or net payout. There is no option to charge it on the figure after your expenses. If your agreement works that way, check the statement against it.
- One rule per property. A percentage or a flat fee, plus any recurring charges. Tiered or sliding-scale fees, such as 15% up to a threshold and 20% above it, are not supported.
- Owner statements are reached from Org Settings, not from the main menu.
- The agent fee is for bookings you add by hand. It is not available on bookings a guest makes online through your own booking page.
Next step
Write the base into your agreement, set it once in Airflow, and let every statement do the arithmetic. If you manage properties for owners, get started with Airflow and set your default management commission on day one. To see how the whole owner statement fits together, from the booking to the owner’s inbox, take a look at owner statements in Airflow. For the channel-commission line that sits above your fee, read How to Track OTA Commissions as Expenses.