Listing a property on Airbnb can be a great source of extra income. But, the convenience of using this platform comes at a cost. To pay for its services and 24/7 support, the company charges an Airbnb service fee – something hosts need to understand. As such, we’ll use this article to explain everything you need to know about these fees.
Specifically, we’ll cover the below topics related to AirBnB’s service fee and how it affects hosts:
- Airbnb Service Fee: How Does It Work?
- How Much Is the Airbnb Service Fee?
- Do Hosts Have to Cover Airbnb Service Fees?
- How To Avoid Airbnb Service Fees
- Final Thoughts on Airbnb Service Fees
Airbnb Service Fees: How Does It Work?
Airbnb provides services – to both guests and hosts. The company lists and markets properties for hosts, and it provides them to guests for rent. Additionally, customer service representatives make themselves available 24/7 to support both guests and hosts.
These services cost money. To offset the costs – and earn a profit – AirBnB charges a service fee. More precisely, it charges guests and hosts a service fee. To properly forecast revenues, hosts need to understand how these fees work.
Broadly speaking, hosts need to pay one of two service fees. Most hosts will pay a fee shared between the guest and host. However, for larger hosts that qualify as hospitality businesses (rare for individual hosts), AirBnB imposes a host-only fee. Regardless of approach, the company nets fees from your earnings. In other words, Airbnb collects its fees automatically, so hosts don’t need to pay them separately.
How Much Is the Service Fee?
Airbnb calculates its service fee based on the stay’s subtotal. This subtotal includes the nightly rate, the cleaning fee, and any additional guest fees. Taxes do not factor into this subtotal. Of note, cleaning and additional guest fees are optional for hosts. But, if hosts add them, they will increase the subtotal used to calculate the Airbnb fee.
Airbnb does not publish the precise criteria it uses in calculating fees. But, it offers clear enough guidelines for hosts to reasonably estimate these costs.
For shared guest and host fees, hosts typically pay 3% of the subtotal. For example, say you charge $100/night and a single $50 cleaning fee. A three-night subtotal equals $350 (3 x $100 + $50). The typical service fee would then equal $10.50 ($350 x 3%). As a result, the host would net (ignoring taxes) $239.50 ($350 subtotal – $100 cleaning – $10.50 AirBnB fee) on the three-night stay.
For hosts using the host-only fee structure, fees range from 14% to 20% of the subtotal. While this seems significantly higher at face value, it provides hosts more flexibility. That is, these hosts can control how much of the fee guests pay, rather than Airbnb dictating the guest fee amount.
However, hosts should also note that their cancellation policies can affect fees. Hosts who select a “super strict” cancellation policy can expect to pay an additional 2% in service fees. This strict policy requires more administrative support, so Airbnb charges a premium for it.
Lastly, some hosts may need to pay an experienced fee, as well. This technically falls outside of the service fee, but hosts should still understand it. If in conjunction with your listing you offer an experience on Airbnb (e.g., local brewery tour, kayaking, bar crawl, etc.), the company takes a cut. And, it’s a large cut – 20% of the Airbnb-listed price of the experience.
Do Hosts Have to Cover These Fees?
Yes, hosts need to cover the service fees. Though rough on your bottom line, these fees allow AirBnB to provide its high-quality services and customer support. However, hosts do have flexibility in how they pay the fees.
The traditional AirBnB model splits fees between the host and guest. Generally speaking, hosts pay 3% of the subtotal, while guests pay 5% to 18% (14.2% on average). On the other hand, hosts can choose to pay the entire amount. With this host-only model, fees range from 14% to 20% of the subtotal. This set-up also allows hosts to indirectly pass on as much or little of that fee to guests as they’d like.
Regardless of which model you choose, AirBnB automatically deducts its service fees. As a result, hosts at least don’t need to deal with the additional time and administrative burden of tracking, withholding, and remitting Airbnb fees.
How to Avoid Service Fees
If you want to use Airbnb as a host, you need to pay its service fees. But, a little planning can help you minimize their effect on your bottom line. If you treat your AirBnB operations like a business, you should have a target net rate. That is, accounting for the service fee, how much do you want to earn each night?
For instance, say you don’t charge a cleaning fee, and you want to put $50 in your pocket every night. A little math will tell you what you need to charge to net $50/night. What listed rate – with a 3% fee deducted – will total $50? Divide $50 by 97% (100% – 3%), and you get roughly $51.55/night. With this system, you effectively avoid AirBnB services, as you factor them into your listed rate. Now you’ll of course need to account for market rates in your area with this approach. But, with a little research and planning, you can net your target nightly rate.
Alternatively, hosts can avoid service fees by not using Airbnb. Plenty of competitors exist – some with lower fees. Hosts can choose to list their properties on some of these websites. Or, if hosts build up a loyal enough guest base, they may not need to use any service. For instance, many families frequent the same vacation spots year-after-year. Hosts can offer direct-booking services to these repeat customers. While you lose AirBnB’s customer support, this approach can also save you from paying service fees.
Final Thoughts on Airbnb Service Fees
Airbnb has turned millions of Americans into landlords, creating tons of extra income. But, these services come at a cost. For most AirBnB hosts, the question becomes: do the benefits of listing on Airbnb outweigh the associated service fees? For most, the answer is yes. Service fees represent a part of doing business. And, by planning for them, you can minimize their effects on your overall profit.
Figuring out AirBnB fees – and how they affect your taxes – can seem daunting. That’s why we’re here to help! At Shared Economy Tax, we live and breathe taxes for Airbnb hosts. Drop us a note, and we’ll be happy to set up a tax planning session.
FAQs
Most guest service fees are under 14.2% of the booking subtotal (nightly rate + cleaning fee + additional guest fee, if applicable—excluding Airbnb fees and taxes). This fee varies based on a variety of factors and is shown during checkout before you book so you know what to expect.
What does Airbnb service fee include? ›
Unless otherwise agreed to by the host and Airbnb, we charge a 20% service fee for experiences to help cover the costs of the products, services, and support we provide, including maintaining liability insurance for most experiences.
Can I avoid the service fee on Airbnb? ›
In short, no. You can't reduce the overall service fee. However, you can reduce your cost as the host by introducing the split-fee option. You could also consider reviewing your cancellation policy, as hosts with stricter policies typically have higher service fees.
Do you have to charge a service fee for Airbnb? ›
As a host, you're charged a service fee whenever a reservation is confirmed. For hosts who offer accommodations, the fee amount is usually 3%, and for hosts of Airbnb Experiences, it's 20%. In most cases, guests are also charged a service fee when they book a stay on Airbnb.
How do I avoid Airbnb service fee as host? ›
How Hosts Can Stop Paying Fees on Airbnb
- Create Your Own Website. In short, the best way and most obvious way for hosts to stop paying fees on Airbnb are to use other platforms, preferably their own. ...
- Provide Guests With the Option to Move Transactions to Direct-Booking Websites. ...
- Get Listed on Alternative Platforms.
Most Hosts pay a flat service fee of 3% of the booking subtotal. The subtotal is your nightly price plus any optional fees you charge guests, such as a cleaning fee, and it doesn't include Airbnb fees and taxes.
How much do Airbnb hosts make? ›
Average Annual Host Revenue By Arrangement Type: 2021/2020
| ARRANGEMENT TYPE | AVERAGE ANNUAL HOST EARNINGS 2021 | AVERAGE ANNUAL HOST EARNINGS 2020 |
|---|
| Entire Home | $14,498 | $8,749 |
| Hotel Room | $8,452 | $4,885 |
| Private Room | $5,260 | $2,994 |
| Shared Room | $2,158 | $1,536 |
The cleaning costs for Airbnb hosts are often higher than those for hotels because they likely can't take advantage of economies of scale. For example, hotels have commercial-size laundry machines. Plus, listings are typically spread out geographically, so there's the inefficiency of traveling miles between properties.
Do I lose the service fee if I cancel Airbnb? ›
The service fee is refundable if you cancel before your reservation's free cancellation period ends (or any time before check in, for reservations in Italy and South Korean travellers in some cases) or if the Host decides to refund you in full after you cancel.
What percentage does Airbnb take from hosts? ›
The host pays a flat rate of 3% of the total booking cost and the guest pays a percentage of their reservation fee (this is somewhere between 5-20% depending on the length of stay, the location, and the cost of the reservation to start with).
Airbnb Owner Salary
| Annual Salary | Monthly Pay |
|---|
| Top Earners | $397,000 | $33,083 |
| 75th Percentile | $181,500 | $15,125 |
| Average | $131,526 | $10,960 |
| 25th Percentile | $39,000 | $3,250 |
A good Airbnb occupancy rate should be above 50%. Otherwise, it means that your short-term rental is staying vacant for more than half the time for which it is being listed for booking. An occupancy rate below 50% is a sign of excessive ADR or insufficient Airbnb marketing efforts.
Who pays the AirBnB service fee? ›
The traditional AirBnB model splits fees between the host and guest. Generally speaking, hosts pay 3% of the subtotal, while guests pay 5% to 18% (14.2% on average). On the other hand, hosts can choose to pay the entire amount.
How do I stop AirBnB cleaning fees? ›
The best way to go about this is to message the host and simply ask if they would be willing to refund some or all of the cleaning fee after your stay if you provide your own sheets and linens. It doesn't take much extra effort, and you would be surprised that hosts are pretty flexible when it comes to this.
What is the difference between host service fee and guest service fee on AirBnB? ›
Historically, Airbnb has had a single fee structure for all Hosts, in which a service fee is charged to both the Host (3%) and the guest (under 14.2% in most cases).
Why does Airbnb charge a service fee? ›
To help Airbnb run smoothly and to cover the cost of services like 24/7 customer support, we charge a service fee when a booking is confirmed. There are 2 different fee structures for stays: a split-fee and a Host-only fee.
Are Airbnb guests expected to clean? ›
Treat your Host's home like your own
Cleaning fees set by Hosts are only meant to cover the cost of standard cleaning between reservations (ex: laundry, vacuuming, etc.). Litter: Guests should put their trash in designated trash receptacles and be mindful of excessive amounts of trash.
Does Airbnb full refund include service fee? ›
Refund conditions
Cleaning fees: Always refunded if you cancel before check-in. Airbnb service fees: Service fees are refunded if you cancel during the free cancellation period for your reservation.
How much do Airbnb Superhosts make? ›
From October 2021 to September 2022 Superhosts have collectively earned over $23 billion in income from hosting on Airbnb. In Q3 2022 the typical Superhost earned 64% more than a regular Host.
What is the most profitable Airbnb? ›
According to data shared by Mashvisor, one of the top Airbnb host calculators, Nashville in Indiana is one of the US cities that offer the highest short-term rental cash on cash returns. Hosts can expect a monthly short-term rental income of about $5,000, with daily rates averaging at $260.
It is meant to cover any expenses they incur in supporting and processing your guest's transactions. The host fee is based on the booking subtotal (nightly rate + cleaning fee + any additional guest fee, minus any security deposit or Airbnb fees and taxes incurred) and is automatically deducted from the host payout.
Should you do the dishes in an Airbnb? ›
Load and run the dishwasher before you go. Respect your host and their time by washing any dishes you've dirtied. It's also a good idea to wipe down counters and leave the kitchen as you found it.
Should I tip my Airbnb cleaner? ›
Considering the fact that Airbnb requires its United States hosts to pay its cleaners a living wage, there's no need to tip housekeepers.
What is the Airbnb fee problem? ›
Airbnb has a pricing strategy problem on extended stays (28+ nights), which make up to 25% of the nights it sells each quarter. The reason for this disconnect is that its service fees are too high compared to the value it brings as an intermediary to hosts and guests on these longer stays.
Does cancelling an Airbnb hurt your rating as a guest? ›
As a host, if you cancel, an indelible mark appears on your reviews and in your statistics. As a guest, you can block a host's dates and cancel as many times as you want, it does not appear on your profile.
Are cameras in Airbnb illegal? ›
Airbnb prohibits security cameras or recording devices that are in or that observe private spaces like bedrooms, bathrooms, or sleeping areas. You must indicate the presence of all security cameras or other recording devices in or around a listing, even if they're not turned on or hooked up.
Is Airbnb hosting worth it? ›
Renting through Airbnb could be more lucrative than renting to a long-term tenant, depending on your location. Your costs may be higher if you rent through Airbnb, since you'll be expected to provide furnishings, keep the place clean, and pay utilities.
Is owning an Airbnb profitable? ›
Is Owning an Airbnb Profitable? An Airbnb short-term rental that has a steady queue of occupants may be more profitable than leasing the same property to someone on a long-term basis. The reason is that Airbnb nightly rates are usually higher.
How much do Airbnb hosts make on average per month 2023? ›
As of Jun 7, 2023, the average annual pay for an Airbnb Host in the United States is $59,296 a year. Just in case you need a simple salary calculator, that works out to be approximately $28.51 an hour. This is the equivalent of $1,140/week or $4,941/month.
Is Airbnb profitable in 2023? ›
According to the latest reports, the short-term rental industry will witness unprecedented growth in the coming years. This means that Airbnb rentals will also be profitable and prove to be a good investment for real estate investors.
If you're considering renting out your apartment, residence, or property on Airbnb, here are 10 tips for running a successful Airbnb business.
- Quality Photographs Make a Difference. ...
- Time. ...
- First Impressions. ...
- Individualized Experience. ...
- Price. ...
- Response Time. ...
- Installing a Lockbox. ...
- Legalities.
For hosts in North America, the peak season is between May and September. The rest of the year is classified as 'off-season', but with pockets of busy periods. Thanksgiving, Christmas, and New Year are all big holidays and they just so happen to be in the off-season.
Is Airbnb declining 2023? ›
While bookings may feel slower, nightly rates and overall revenue are still growing YOY. For 2023, AirDNA forecasts that average daily rates (ADRs) will grow 1.7%. This is slower than the previous couple years, though, so you'll need to manage your listing more proactively to make sure you get your piece of the pie.
Should I split Airbnb per person or per room? ›
I would split the rent by room. The person who gets their own room and bathroom should pay a full half of the rent. Unless one room is much larger or fancier than the other, it's fair to split the cost by bedroom.
What is a host fee? ›
A Host Service Fee is a fee you pay to list your property on Airbnb's platform. It's a percentage of the total booking price and is calculated based on how many nights guests book, how much they spend per night and the price of your listings.
How does Airbnb make money? ›
The majority of its revenue comes from service fees from bookings charged to both guests and hosts. Airbnb raised $3.5 billion in its initial public offering on Dec. 10 at a fully diluted valuation of around $47.3 billion, debuting on the Nasdaq under the ticker ABNB and pricing its IPO at $68 a share.
Does the service fee go to the host or Airbnb? ›
The Host service fee, which is generally 3% of your booking subtotal ($10.80 USD), is deducted from your earnings, and a service fee of 14% ($50.40 USD) is charged to guests and included in the total price they pay.
What is Airbnb service? ›
The company lists and markets properties for hosts, and it provides them to guests for rent. Additionally, customer service representatives make themselves available 24/7 to support both guests and hosts. These services cost money. To offset the costs – and earn a profit – AirBnB charges a service fee.
How do I get my cleaning fee back from Airbnb? ›
Submit your request: You'll describe the issue, provide photos or video if you can. You can ask the Host to fix the issue, request a refund of the cleaning fee, or, for severe issues, you could request to cancel your reservation for a full refund of remaining nights.
Can you ask Airbnb host for full refund? ›
If you'd like to request a refund before or after your trip, refund requests of any amount can be handled through our Resolution Center. We recommend discussing any refund amounts with your Host through your Airbnb message thread before submitting a request in the Resolution Center.
Here's the general rule of thumb that most etiquette experts can agree on: Whoever does the hosting does the paying. So, in this situation, hosting your own birthday meal means volunteering to cover the bill.
Does a host pay for everything? ›
Sometimes the host arranges and pays for everything. Then the guest takes the host out for dinner for night as a gesture of gratitude. Others pay for their own and bring or leave a gift of some sort. Or you could talk it over and decide ahead of time who will pay for what.
What are the cons of Airbnb? ›
The pros of Airbnb include affordability, local experience, more amenities than a standard hotel room, access to unique spaces, and the ability to connect with helpful hosts. The cons of Airbnb include a lack of standards, risky situations, no hotel services, paying in advance, and varying cancellation policies.
What percentage do Airbnb hosts keep? ›
The host pays a flat rate of 3% of the total booking cost and the guest pays a percentage of their reservation fee (this is somewhere between 5-20% depending on the length of stay, the location, and the cost of the reservation to start with).
What are the pros and cons of hosting Airbnb? ›
In conclusion, while hosting through Airbnb has many advantages such as being able to make money and meeting new people from around the world, there are also some drawbacks such as high commissions and liability risks associated with damages caused by guests during their stay at your property.
