Tourist Tax and City Tax on Short-Term Rentals: How to Charge It Properly
This article is general information, not tax advice. Tourist and occupancy taxes are set locally, they change, and the rules for your property depend on where it is and how it is let. Confirm the current position with your city or local authority, or with an accountant, before you charge or remit anything.
A family of four books Villa 1 for five nights. The price is agreed and the deposit is paid. Then you remember that your municipality charges a tax per person, per night, and it was never in the quote.
You have two bad options. You ask the guest for more money after they have booked, which feels like a hidden charge even though it isn’t. Or you pay it yourself, out of your margin, on every booking you forgot to price it into.
The fix is to put tourist tax in the price before the guest pays, as its own visible line.
What these taxes are called
The same idea goes by many names: tourist tax, city tax, occupancy tax, lodging tax, bed tax, accommodation levy, tourism levy. They all mean a charge on the guest for staying in paid accommodation, collected by whoever takes the booking and passed on to a public authority.
It is not your income. You are collecting it on someone else’s behalf. That matters for your books, and we come back to it below.
The three shapes a tourist tax takes
Every local scheme is different, but nearly all of them are built from one of three shapes.
| How it is worked out | What the guest pays | What you need to know |
|---|---|---|
| Per person, per night | A fixed amount for each guest for each night | The number of guests and the number of nights |
| Percentage of the price | A share of the accommodation charge | What counts as the taxable price (with or without cleaning, after or before discounts) |
| Flat, per night or per stay | A fixed amount per night, per room or per booking | The number of nights, or nothing at all |
On top of the basic shape, local rules often add conditions: exemptions (children under a certain age, residents, guests staying for work), caps (tax charged only up to a maximum number of nights), and different rates by type or grade of property. Some places require you to register before you can collect at all.
That is why this article quotes no rates: they vary by authority and are revised, and a number in a blog post goes out of date without anyone noticing.
Who collects it: you or the platform
This is the question that trips hosts up most often.
- On some listing platforms, in some places, the platform collects and remits the tax for you. The guest pays it at checkout on the platform, and it never reaches you.
- In other places the platform does nothing, or collects it and passes it on to you to remit.
- On a direct booking, it is always on you. If a tax applies and the guest books with you directly, nobody else is collecting it.
The risk runs both ways. Charge it where the platform already has, and the guest pays twice. Assume the platform collected it when it didn’t, and you owe money you never took. Check who is responsible, per platform and per location.
How to charge it on your direct bookings with Airflow
For bookings taken through your Airflow booking page, the tax goes into the price the guest sees before they pay. In Settings, open the Rates & Payments tab. There are two panels that matter here.
The Taxes panel, for percentage taxes
The Taxes panel is for charges worked out as a percentage: VAT, a tourism levy set as a percentage, or any other percentage-based tax. You give each one a name and a Tax rate %, and it is included in every booking total from then on.
A percentage tax is worked out on:
- the accommodation price after any discounts,
- plus the cleaning fee,
- plus any mandatory fee you have marked as Taxable.
It is not worked out on the pre-discount list price. If a guest earns a stay-length discount, the tax follows the price they actually pay.
The Mandatory fees panel, for everything else
A per-person-per-night tourist tax is not a percentage, so it does not go in the Taxes panel. Add it under Mandatory fees instead, and choose how it is charged:
- Flat fee — once per booking
- Per night
- Per guest
- Per guest/night — the usual shape for a city tax
- Per extra guest and Per extra guest/night — only guests above a number you set
- % of accommodation
Mandatory fees are included in every booking and the guest cannot opt out, which is what you want for a tax. Each one has a Taxable tick box. If your percentage tax should not be charged on top of the tourist tax, untick it. Whether it should is a question for your accountant, not a default to guess at.
Two limits to know about
Per guest counts everyone. Adults and children are added together. If your city exempts children, Airflow will not know that. You would need to handle that case yourself, for example by adjusting the booking.
Airflow does not know your local rules. It does not look up rates, apply caps on nights, file returns or pay the authority. It charges what you configure, correctly and every time. Getting the configuration right is still your job.
What the guest sees
Each tax and each mandatory fee appears as its own named line in the price breakdown before the guest pays. A percentage tax shows its rate next to its name. Nothing is folded into the nightly rate, so the guest can see exactly what they are paying for.
Here is an illustrative quote for Villa 1. The figures are invented to show the arithmetic; they are not any city’s real rate.
| Line | How it is worked out | Amount |
|---|---|---|
| Accommodation, 5 nights, after discount | Seasonal rate less stay-length discount | 900.00 |
| Cleaning fee | Mandatory fee, flat, marked Taxable | 100.00 |
| City tax | Mandatory fee, 2.00 per guest/night, 4 guests, not Taxable | 40.00 |
| Sales tax (10%) | 10% of 900 + 100 | 100.00 |
| Total | 1,140.00 |
The same lines follow the booking afterwards: in the price breakdown in the guest’s trip portal, and on the booking confirmation PDF they can download. Optional extras such as an airport transfer sit in their own section, separate from the charges the guest cannot skip. See selling the airport pickup at checkout for how that side works.
In your books: re-code it before you approve
When the booking flows into your accounting draft, each tax and each mandatory fee arrives as its own named line, so nothing is buried in the accommodation figure.
There is one step to check. By default, tax lines are coded to your revenue account and mandatory fees to your extras account. Tourist tax you collect to pass on is not your revenue. When you review the draft invoice, move those lines to a liability account (for example, “Tourist Tax Collected”) before you approve it. Our guide to cleaning fees, deposits and taxes in your books explains why that matters. If you are also VAT-registered, VAT for short-term rentals covers how VAT interacts with the rest of the booking.
A checklist to get it right
- Find out whether a tourist tax applies to your property, from your city or local authority, and whether you need to register to collect it.
- Note its shape: per person per night, percentage, or flat. Note any exemptions and caps.
- Find out who collects it on each platform you list on, so you never charge it twice.
- Add it in Airflow: percentage taxes under Taxes, everything else under Mandatory fees with the right charge type.
- Set Taxable deliberately on each mandatory fee.
- Run a test quote on your booking page and check the breakdown line by line.
- Re-code the tax lines to a liability account when you review each draft invoice.
- Keep a record of what you collected so the return you file matches what you took.
Put it in the price, not the follow-up email
A tax the guest sees before paying is part of the price. One added after booking looks like a surprise charge. Set it up once and every direct booking carries it, itemised and ready for your books.
See what else is included on the features page, or get started and add your first tax in the Rates & Payments tab.