Understanding how fees work is essential for managing your listing and maximising your earnings. We'll explore everything you need to know about Airbnb host fees, helping you navigate this important aspect of hosting.

As an Airbnb host, it's crucial to have a clear understanding of the fees associated with your listing. These fees can impact your profitability and influence your pricing decisions.

By familiarising yourself with the different types of fees and how they are calculated, you'll be better equipped to make informed choices that align with your hosting goals.

Airbnb service fee’s

Overview of Fee’s

Airbnb charges hosts typically around 3%.
Airbnb’s commission can go up to 14% or more for hosts with certain cancellation policies or if you use channel management software to manage multiple listings, this is to try and encourage hosts to list their property only on their platform.

Fees For Guests:

Service Fee: This fee is a percentage of the total reservation cost and normally is around 3% for guests.

Occupancy Taxes and Fees: In some locations, Airbnb collects and remits occupancy taxes and fees on behalf of the host or local authorities. The amount varies by location.

Cleaning Fee: Hosts can charge a cleaning fee to cover cleaning. The host sets this fee in addition to the nightly rate, this cost depends on the size of the property and can range from £50-£150 per stay, the bigger the property, the bigger the fee’s for cleaning

Extra Guest Fee: If the number of guests exceeds what was initially specified in the reservation, hosts may charge an additional fee per extra guest, this can be around £10-£20 per guest but some host’s may not charge this.

Security Deposit: Some hosts require a security deposit to cover potential damages or rule violations. Airbnb holds the deposit, which is returned to the guest after their stay, this normally costs around £150-£250 depending on the size of the property and the value of the belongings inside for guests to use.

Fee’s For Hosts

Service Fee: Airbnb also charges hosts a service fee, a percentage of each booking’s subtotal – 3% for most hosts, up to 14% with certain cancellation policies and if you host your property on more then just Airbnb.

Fee Structure

Split-fee: Where service fee is split between the host and guest automatically taken out at payout.

Host-only fee: The entire Airbnb commission is dedicated to your payout, usually 14-16%. For some listings, like hotels, a host-only fee is mandatory.

Extra fees

Airbnb used to charge an additional 2% fee for bookings of listings with SuperStrict cancellation policies, totalling 17%. However, since March 2023, Airbnb has no longer charged an additional 2%.

Other Fee’s

Their are other fee’s that you need to consider before becoming An Airbnb host that is not directly related to Airbnb but are still costs to consider, i am going to break these down for you.

Rent/Mortgage

If you do Rent to rent or own your Airbnb property, you need to factor in the rent or mortgage cost, this can be around 20% if you own and 30% if you rent your property of your revenue at a very rough estimate.

Utilities

Gas - This is normally combined with electric or may not be a cost with this if you have an electric only property, but your electric bill will be much higher vs if you have both gas and electric, as an estimate this would be 10%.

Electric - This is an important costs as guests often use a lot of electricity, especially through heating in the winter, i would account 10% for this.

Water - Not a big charge but is one to consider, 5% for this.

WIFI - Also not a big charge but you will need to provide fast and reliable WIFI for your guests, 5% for this one also.

Council Tax/business rates - You will need to pay for council tax or business rates for your property, i would speak to your local authority on which would be best to use as some offer discounts if on business rates, i would account 10% for this.

Other Fees to Consider

Maintenance - This can be a big one or a small one depending on the property, for example old houses require a lot of maintenance especially if it has been a while since the property has been refurbed, but new build flats can have little to no maintenance, i would account 5% for this.

Management - Depending on if you want your Airbnb investment to be passive or a more hands on business, then you will need to account for Airbnb management, Stayful can help with this and we charge 15% for management, prices for management can be between 14%-20%.

Bin Collection fees - Some councils will not let use use council collection for bins if they find you to be doing Airbnb in your property, this would be around 5%.

Tax & VAT

Taxation and value-added tax (VAT) are crucial considerations for Airbnb providers, these charges are more on the profit after the above fees, but these will need to be paid before you can claim your net profit.

VAT

The value-added tax (VAT) is an important consideration for serviced accommodation providers. In many countries, the provision of short-term accommodation is subject to VAT but if your accountant can do it, you can apply for TOMS, this will make you pay VAT on profit vs turnover which is a massive help in profitability in your serviced accommodation property.

Important things to note:

Not every accountant does TOMS so you need to find one that can, we recommend Riverview portfolio.

TOMS accountants will cost a lot more than regular accountants both in terms of hourly charge and how many hours they do on your books.

VAT is not applicable for guests staying over 28 days, this is because guests staying over this length of time are classed as “long term” and tenant like, so they do not need to have VAT charged to them.

As much as it is important to do this from the beginning, you will not need to become VAT registered until you exceed £90,000 off revenue.

TOMS

You should use TOMS if you buy in and resell accommodation, passenger transport, car hire, trips/excursions, guides or airport lounges as principal to a consumer. TOMS is better than registering for VAT in every country in which you operate.

TOMS is a year-end tax calculation. Think of it like a corporation tax computation. It makes you pay UK VAT on the margin on EU destinations. You cannot reclaim UK or foreign input VAT on the corresponding costs of sale so the overall effect is that you pay VAT on the selling price of EU accommodation.

Important things to note:

HMRC does not like R2R companies or serviced accommodation companies using TOMS, but currently you can apply, this has gone to court and was ruled that serviced accommodation companies can use this rule, however HMRC are contesting it.

TOMS is quite complicated as most accountants will say, to better explain read this article on the government website.

Tax

Serviced accommodation companies will pay the normal rate for corporation tax which currently stands at 20% of gross profit, some items you can claim back as expenses:

Rent/mortgage costs.
Utilities.
Furniture.
Interior design.
Kitchen & Bathroom appliances.
Fuel

Speak to an accountant for more information on this.

Tips for managing and minimising host fees

Understand the fee structure:

Familiarise yourself with the different types of fees charged by Airbnb, such as the host service fee, cleaning fees, and any additional taxes or charges. This will help you make informed decisions about your pricing and ensure that you are not overlooking any significant costs.

Optimise your cleaning process:

Streamline your cleaning process to minimise the time and resources required to prepare the accommodation for each new guest. This may include investing in high-quality cleaning supplies, training your cleaning staff, or exploring the use of professional cleaning services, this will help decrease cleaning costs overall.

Consider offering discounts For Long Stay’s

Offering discounts for longer stays or off-peak periods can help to attract more bookings and offset the impact of host fees. Focusing on having a high average customer value is going to be the key to maximising the profits.

Leverage Airbnb's tools and features:

Airbnb provides a range of tools and features to help hosts manage their listings, including automated pricing and calendar management. Use these tools to minimise the time and effort required to manage your hosting business meaning even if you make less profit, it has taken less of your time and effort to get it making a better investment allowing you to scale more and make more profit on having more properties.

If you are interested in learning more about Airbnb you can join our free Airbnb academy here.

If you are interested in Airbnb management then let’s have a chat.

Airbnb Host Fees, Everything You Need to Know