Co-hosting in Toronto - How does the tax work?

Answered!
Ayse-Gulru0
Level 2
Toronto, Canada

Co-hosting in Toronto - How does the tax work?

Hi, 

 

I am a Superhost who have been active since 2018 and now I will be co-hosting another condo in Toronto. We agreed on me getting only 20% of the income from AirBnb earnings as the place is not mine and I will only help virtually with bookings. The money from all reservations should be split by 20% to 80%. As it will be my first time co-hosting an AirBnb, I was wondering if it is possible to split earnings to 2 co-hosts in different percentages, or if one person gets the earnings? 

 

If latter, what should be the next steps? How does the tax work? Who pays the tax? 

 

Will be really happy if you can let me know on how these work in Toronto as the last thing I want would be getting in trouble with CRA 🙂 

 

Thanks,

Gulru Yetkin

1 Best Answer
Helen3
Level 10
Bristol, United Kingdom

You can look at your government's tax service website about how taxes work in your country @Ayse-Gulru0  or speak to an accountant to help advise you on taxes for your cohosting business.

 

If you are splitting your fees with another cohost,  they can invoice you for their services and this can be deducted as a cost against your business.

View Best Answer in original post

5 Replies 5
Ashley1570
Level 2
Toronto, Canada

I'm following. Maybe Airbnb can explain??

@Ashley1570 @Ayse-Gulru0 I am so confused with this thread. Tax is fundamentally simple - You get paid and you probably get taxed. You avoid tax by claiming all possible tax reductions, you evade tax at your peril.

Which part of all this do you want Airbnb to help with?

It is the first time I will be co-hosting. I am trying to understand can you set things up on Airbnb to split all the earnings to 2 people based on the pre-defined percentage by the co-hosts. 

 

Because if only one host gets the payments then they need to send a part of it to the other co-host based on what they agreed on as %. Then do the main host pay taxes from 100% of the income or the 80% as they shared the earnings with another host but as only 1 host got the payment from AirBnb then will Airbnb state it as if only one host gets all the earnings? @Mike-And-Jane0 . 

 

I know it is pretty complicated to explain 🙂 

@Ayse-Gulru0 In the UK it is relatively simple. Even if Airbnb says I have 100% of the income I can just tell the inland revenue where the income actually went (my wife) and all will be well as long as she declares it.

In your country I don't know how the tax authorities work - In principle any payments to co-hosts etc are just an expense but wether you also need to supply the tax authorities with how much you have paid them I just do not know.

Helen3
Level 10
Bristol, United Kingdom

You can look at your government's tax service website about how taxes work in your country @Ayse-Gulru0  or speak to an accountant to help advise you on taxes for your cohosting business.

 

If you are splitting your fees with another cohost,  they can invoice you for their services and this can be deducted as a cost against your business.