New host single fee.

[Petrona2]

Hi all, is any host happy with the new single fee. I am struggling to comprehend it. If you set too high high you may not be booked, set too low and loose a big chunk in 15.5 deduction. So I am thinking of going back to split fee. Let me know what your thoughts are.

[Elaine701]

@Petrona2 

I've been on single fee for years and for me, it simplified a number of things. 

It's the same system used by every other platform, so it's easier to keep price consistency among them. It simplifies accounting tasks. And it's actually a slight discount from the 18% previously charged on split fee, so hosts actually profit a few cents more, while keeping the guest price the same.

But I understand that uniquely in the UK, hosts are taxed on the full amount that the guest pays, including the VAT. So UK hosts aren't happy about it. It only raises your tax bill unnecessarily. 

But it would be the same on every other platform, so it appears that for UK hosts, Airbnb just removed one key advantage over other platforms.

Yet other platforms charge even more commission, so I wouldn't expect a mass migration to other platforms by UK hosts. No advantage there. 

I believe Airbnb is phasing out split fee globally, so I doubt you'll be able to go back to it. Or maybe they'll make an exception just for UK hosts?

Good luck 🤞 

[Petrona2]

Hi Elaine i think you are right. I tried to return to split fee but the platform prevent me from doing so.

[Helen471]

@Petrona2   You had until the end of September to change from Split Fee to Single Fee. Even if you had waited to make the change, the system would have automatically changed it to the Single Fee, as that is the new fee structure now. Airbnb gave hosts a few weeks notice to decide on how much they wanted to increase their nightly rate. Most of us do not want to lose money, so the math is simple to increase the rate to an additional 15.5%, which the system will do for you. But you can still set your nightly rate lower.

The only thing you do have to be careful with is if you have any "promotions" set up, as Guests will still be offered any promotions you have set up when you lower your nightly rate.

[Vasanth13]

India has similar tax issues. Rental up to Rs 7,500 per night attracts 5% GST but GST zooms to 18% once rental crosses Rs 7,500.

[Elaine701]

@Vasanth13 

Lucky you! I pay 21% across the board. 

But we pay tax on what we actually earn, not what the guest pays, which is about double what we earn. 

[Vasanth13]

GST is Good & Service Tax by Govt of India on all sales. This is not income tax, which is separate from GST and it is based on your overall earnings and other income. 

[Elaine701]

@Vasanth13 

Ok thanks for the explanation.

We pay 21%VAT on the necessary goods and services that we purchase as part of our operational costs. But that's an expense we can deduct from our income taxes. 

[Shelley159]

You're in the UK @Petrona2 so you can't go back to a split fee. All UK hosts have a mandatory single fee (since June this year). Good news - it saves you the trouble of having to decide 😀

Like @Elaine701 it looks to me as if split fee may be on its way out altogether.

[Petrona2]

Hi  Shelley, thank you very much for. I will go back to split fee.

[Shelley159]

You can try in your settings @Petrona2 but I really don't think it will be an option for you.

[Petrona2]

I think you are correct, it’s not an option.

[Helen3]

You can't go back to a split fee in the UK @Petrona2 

[Petrona2]

Thank you. Which is better split or single fee

[Shelley159]

Single fee is simpler and in line with other platforms as @Elaine701 has said.

The main disadvantage is that hosts who do plenty of business may reach a threshold (such as mandatory VAT registration) sooner.