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Calculating Ratios to Automate the Division of Airbnb Custom Taxes
Calculating Ratios to Automate the Division of Airbnb Custom Taxes
Jason avatar
Written by Jason
Updated over a week ago

In most jurisdictions, Airbnb hosts have the option to collect and remit taxes from Airbnb directly, rather than opting for Airbnb to do this on their behalf. In many cases this is preferred. To do this in Airbnb, you can set up a Custom Tax in each of your listings.

This article is about dealing with more than one Custom Tax and how to automatically translate the split of these taxes with Bnbtally .

For example, let's say you have two Custom Taxes set up in your Airbnb listing. In your area you want to collect and remit two taxes a "Tax A" of 5% and a "Tax B" of 10%. After each of these Custom Taxes are set in your Airbnb listings, Airbnb will send these taxes directly to you (see How to add taxes to listings in Airbnb).

After you set Custom Taxes in your Airbnb listings, in Bnbtally you can split the proper amounts of each tax by calculating the ratio of each. Here's how to calculate each ratios:

Example Custom Taxes

Tax A = 5%

Tax B = 10%

Translating Example Custom Taxes into Bnbtally Ratios

  1. Calculate the sum of both taxes which will be used as the denominator: 5 + 10 = 15

  2. Calculate the Bnbtally Ratio for Tax A: 5/15 = 33.33%

  3. Calculate the Bnbtally Ratio for Tax B: 10/15 = 66.67%

In Bnbtally, add two lines of type "Custom Taxes" in your invoice settings and set the ratio for each as calculated above. Now your Custom Taxes are being allocated for each tax authority and you have a perfectly automated division of Airbnb Custom Taxes.

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