Airbnb’s New 15.5% Host Fee: How to Protect Your Income

If you are an existing Airbnb host moving from the old split-fee system to Airbnb’s new single host fee, you have probably already seen plenty of advice telling you how much to increase your prices.

Unfortunately, some of that advice is misleading and some of the calculations being shared on social media are simply wrong.

So let’s make this straightforward.

The important thing is not the percentage Airbnb charges. It is making sure that, after Airbnb takes its fee, you are still receiving the income you intended to earn.

And that means understanding what number you are starting with.

Under Airbnb’s traditional split-fee model, most hosts paid around 3% of the booking subtotal to Airbnb.

The guest then paid their own Airbnb service fee on top.

And this is the part that is sometimes getting lost in the noise surrounding the new 15.5% host fee:

Your guest was already paying a substantial Airbnb service fee, generally between 14.1% and 16.5% of the booking subtotal.

Under the new single-fee model, that separate guest service fee disappears. Instead, Airbnb deducts the service fee from the host.

For most affected hosts, that fee is 15.5%. Brazil and Mexico have different rates, including a 16% single host fee.

So although seeing “15.5% host fee” may initially sound alarming, it does not mean your guest suddenly has another 15.5% added to the cost of their stay.

They were already paying Airbnb a sizeable fee, but now, the fee is essentially moving from one side of the transaction to the other.

But you MUST adjust your pricing correctly, and this is where hosts can lose money.

If Airbnb starts deducting 15.5% from your current price and you do nothing, you will have a payout shortfall.

And simply adding 15.5% to your existing base price is not mathematically sufficient if what you are trying to do is protect a net amount.

Why?

Because Airbnb takes its 15.5% from the new, higher figure.

If the amount of your net/base rate is $100, the calculation is not:

$100 + 15.5% = $115.50

because Airbnb will deduct 15.5% of $115.50, leaving you with $97.60.

If you want to continue to receive $100 after Airbnb takes its 15.5% fee, you need to charge $118.34 (18.34% higher, not 15.5% higher).  

Airbnb’s 15.5% fee of $118.34 is $18.34.

$118.34 – $18.34 = $100  

That is the difference between simply adding a percentage and correctly grossing up a price.

Still not sure?
As a simple rule of thumb, if you need to protect your net/base price from Airbnb’s 15.5% fee, your Airbnb price needs to be approximately 18.34% higher.

So if your net/base price is $100, your Airbnb price would be $118.34.

(Hosts who have tax included in their nightly rate should see the section later in this article, as the amount you need to gross up may be different.)

This is slightly different.

Let’s say your current Airbnb price is $100.

Under the old split-fee system, Airbnb takes approximately 3%, so you actually receive:

$97

If all you want to do is make sure you continue receiving that same $97, you need to gross up your current Airbnb price by approximately 14.8%.

Your new Airbnb price would therefore be approximately $114.79.

Why is this different from the 18.34% example above?

Because in the first example, you wanted to receive the full $100.

In this example, you were already receiving only $97 after Airbnb’s old 3% fee. You are simply protecting that existing $97 payout.

For hosts whose accommodation price excludes taxes:

If you need to receive $100 net from Airbnb, increase your price by approximately 18.34%:

$100 → $118.34

If your current Airbnb price is $100 and you simply want to continue receiving the same payout you received under the old 3% split-fee system, increase your current price by approximately 14.8%:

$100 → approximately $114.79

There is another complication for many European hosts.

Airbnb may charge VAT or IVA on its service fee.

If that VAT is an unrecoverable cost to you, your gross-up needs to take it into account as well.

Rental Scale Up has calculated approximate increases for hosts moving from the 3% split-fee structure who need to preserve their existing payout:

These percentages reflect the relevant VAT/IVA treatment of Airbnb’s service fee.

However, if you are VAT/IVA registered and can recover the VAT/IVA charged on Airbnb’s service fee through your VAT/IVA return, Rental Scale Up recommends using the standard adjustment rather than adding an unrecoverable VAT/IVA allowance.

So before changing your prices, check your Airbnb payout statement and establish whether Airbnb is charging VAT or IVA on its service fee and whether that tax is recoverable in your particular circumstances.

If you are unsure, check with your accountant.

In markets such as the United States, sales and occupancy taxes are normally dealt with separately from the advertised accommodation rate and Airbnb service fee.

Airbnb states that its service fee is calculated on the booking subtotal, which excludes taxes.

So a host whose $100 base rate excludes sales or occupancy taxes should not add those taxes into the figure before carrying out the host-fee gross-up.

The same principle applies wherever taxes are separately identified and excluded from Airbnb’s booking subtotal.

Always check how Airbnb handles taxes for your particular listing and jurisdiction.

The new 15.5% Airbnb fee doesn’t just apply to your nightly rate.  Airbnb also deducts it from additional charges such as cleaning fees, pet fees and extra guest fees.

So if you charge a $75 cleaning fee, Airbnb will deduct approximately $11.63, leaving you with:

$63.37

If you need to continue receiving the full $75, you’ll need to increase your cleaning fee by approximately 18.34%, to:

$88.76

Airbnb deducts approximately $13.76, leaving you with your original $75.

The same principle applies to your other host-set fees.

There are already a lot of posts, reels and graphics appearing telling hosts simply to:

“Add 15.5% to your Airbnb price.”

That advice can be wrong.

Others quote 18.34% without explaining what that figure is designed to protect.

And others talk about increasing prices without considering:

• the 3% fee you may already have been paying
• VAT or IVA on Airbnb’s service fee
• cleaning fees and other additional charges
• whether you want to protect your current payout or a separate base/net price
• the fee percentage that actually applies to your country and account

So please don’t copy somebody else’s percentage and apply it across your calendar.

Start with your own numbers.

The simple checklist

Before changing your Airbnb prices:

1. Check your current Airbnb fee structure.
2. Check the actual percentage Airbnb will charge you under the single-fee model.
3. Decide what you need to protect: your current Airbnb payout or your true base/net price.
4. Check whether VAT or IVA is being charged on Airbnb’s service fee and whether you can recover it.
5. Review cleaning, pet, extra-guest and other host-set fees as well as your nightly rate.
6. Check discounts, promotions and seasonal pricing after making the adjustment.
7. Preview several real bookings in Airbnb and check both what your guest will pay and what Airbnb says you will earn.

Airbnb provides a price breakdown within your calendar that allows you to preview the guest price and your expected earnings. My recommendation is to use it and check it back with the advice I have provided here.

If you are still unsure how much you need to increase your Airbnb prices – I’m happy to help you.  Just pop me off a message via the contact form and I’ll get right back!