Last Updated on September 24, 2022 by
Every host on Airbnb pays a flat service fee of 3% to the company. This amount comprises the booking subtotal, covering cleaning costs, rates charged per night, and any additional fee the host includes in the listings, excluding the Airbnb fee and taxes. Airbnb ensures fairness to owners by not setting the processing fee for withdrawals to facilitate bookings.
Many factors determine the amount of money Airbnb takes from the hosts using various payout methods. The service fee is mandatory, but the cleaning fee may or may not be included by the host. All these charges are explained in detail below.
The service fee Airbnb takes from hosts or owners
Airbnb categorizes the service fee as either a host-only fee or a split fee. Both types of fees vary based on factors such as the type of hosts and region. Super hosts and hosts with special cancellations will always pay higher than the stipulated rates.
Host-only fee
Airbnb deducts 14% to 16% of the total amount from the owners’ payout. This amount is payable by most hosts, except those in China who pay 10%.
Split-fee
This is the actual 3% that Airbnb takes from owners with average hosting services. Hosts from Italy, Airbnb plus hosts, and super hosts pay more.
Benefits of hosts paying the service fee to Airbnb
Airbnb benefits from the fee paid by every host to facilitate its activities. In return, Airbnb markets homeowners/hosts property online to potential guests. The company also uses some money to train hosts and the rest to pay its employees. The company has a large team of workers like the support team, trainers, etc. It is, therefore, essential for hosts to deliver the service fee to benefit from all these services in every way.
Simplified pricing for Airbnb’s owners
A simplified pricing fee was launched in 2020 to give hosts control over their rates, with slight adjustments to the regular pricing fee. Airbnb’s simplified pricing charges a 15% guest fee from owners as the only amount to all software-based connected hosts. From the price, hosts can adjust their rates to qualify in the competitive market of online renting to increase bookings. Most global hosts will have their amount deducted by Airbnb except those in Uruguay, Canada, the US, Bahamas, Thailand, Taiwan, Mexico, and Argentina.
Criteria used by Airbnb to deduct money from hosts
As a host, the amount Airbnb can deduct from your payout varies depending on the period of reservations, lowest payout amounts, and Value Added Tax (VAT). The company makes and releases payments in monthly installments, which may create the need to adjust your hosting periods. The VAT may also be included in the amount deducted, but this will be separate from the service fee.
Payout currency also determines the amount Airbnb takes from the hosts. Due to conversion rates, hosts with a different payout currency may pay higher amounts. To avoid this fee, owners can always change their pricing settings.
How hosts or owners lower the Airbnb costs?
The increasing service fee on Airbnb has created the need for most owners to find ways of paying small amounts of payment or eliminating the service fee. These are ways hosts manage to get high returns while paying less to Airbnb.
Negotiating with the guests to include fewer reservation days
While a guest may negotiate with the host to lower the cost of the listing, hosts also deal with guests to get their proper amounts. For instance, a guest who needs two weeks reservation will have the host reduce it to one day. From there onward, the host will deal with the guests directly through direct payment methods. Likewise, the guest will benefit by evading the high cost and saving more for 13 days.
Referring guests to book directly from their websites
Owners are in the business of creating their sites where the service fee is lower than that of Airbnb. Hosts can also refer guests who want to have prices lowered directly to their websites. Guests have to search the name of their hosts’ listing online to make a direct booking, which significantly reduces the fees paid, which decreases the cost further.
Advancing their listings to alternative sites
The desire to succeed as a host makes owners get listed on alternative sites like VRBO. They charge fair prices using the same rentals to make their guests afford their fees and for them to reduce the service fee imposed by Airbnb.
Frequently Asked Questions
How much does Airbnb take from hosts as an experienced fee?
Experience fee only arises if the host has linked their apartment with an experience. Some hosts do so to let their guests have future consideration when booking a reservation. Airbnb will charge an experienced fee of 20% from hosts for each experience offered. The deduction is automatic from the host’s payout.
How Airbnb takes service fees from owners during payouts
Once the host has finished with the guests and everything is clear, Airbnb will release the money to the owner. However, this amount will be exclusive of the service fee, which is deducted before releasing the payout to the host. Many hosts have different amounts taken by Airbnb based on location, and type of host, among other factors, discussed earlier.
How much does Airbnb take from hosts for posting on their site?
The entire process is free, from signing up to posting on the Airbnb platform, and hosts don’t pay any amount for having their properties advertised online. Airbnb only takes the fee when the advised property from the host starts to get bookings. There’s also no subscription fee for posting on their site.
How Airbnb makes money from hosts for long-term reservations
Owners who rent their property for the long-term get payment separately from short-term owners. Airbnb charges a down payment to hosts for any stay of more than 28 days during the first month before releasing the money for subsequent periods. Hosts can always go through the dates of their monthly payments once Airbnb confirms it.
Sometimes it may charge for upcoming payments. Therefore hosts need to confirm from their payment receipts. Hosts who charge security deposits should expect a temporary hold of their money for 48 hours before release. Airbnb holds the funds for authorization to give the owners and guests enough time to confirm that everything is as expected.
How does Airbnb pay hosts?
Hosts on Airbnb receive payment based on the period they have used the platform and the reservation period for their guests. New posts on the forum may get their funds at the end of the month regardless of their hosting period. Veteran hosts with short-term rentals get paid within the first two days after the guests arrive and check out. Any host who rents the property for 38 nights gets paid at the end of the month.
The platform provides hosts with transaction history to follow up with any pending and finalized transactions. The company also offers various payment methods like PayPal, Western Union, and Payoneer. International wire transfers may take some time to process, usually between 3 business days to one week. Otherwise, PayPal account transfers are fast and can be done within one business day.
Withdrawal requests made on weekends and holidays are forwarded to the following week because most banks don’t operate during these periods. Hosts have the right to have multiple payment methods linked to other listings. However, they are supposed to choose the default payment method but can always change in future transactions under the settings.
How much does Airbnb take from hosts as co-host payment?
Hosts who find it challenging to run and manage their properties may hire co-hosts to help them run the business more effectively. Co-hosts will mainly help in inspection, key exchange, and take over other responsibilities allocated to them by owners. Airbnb will take 10-30% of the hosts’ daily amount, excluding extra charges and cleaning fees.
Host Early Pay Fee for Airport hosts
Owners who desire to get funds as soon as possible can request a host early pay fee to have the amount transacted within the shortest time, like during an emergency. Airbnb deducts a small amount of money from the host’s payout for the early payment fee. Keep in mind that not all hosts qualify for the early payment fee. Owners with long-term reservation rentals are not eligible to access this fee. Likewise, hosts with Western Union payment methods, co-hosted rentals, those residing outside the US, and strict reservations are not allowed to request the Early Host Pay Fee.
What expenses are deducted from Airbnb’s hosts’ income?
Airbnb does not tax all of its hosts’ income. Various factors contribute to the taxable facilities, like owning or renting a property, tax status, etc. Airbnb only deducts expenses from the host’s rental commissions, mortgage, insurance, and other costs, and the cleaning fee is included in the listings.
Final Thoughts!
Airbnb charges for hosting, but many owners are looking forward to lowering the service fee and other costs. As its charges keep increasing, frequent travelers are opting for cheaper alternatives. The Airbnb platform may have to reduce the amount it charges hosts to remain competitive in the market. Nevertheless, it is an excellent platform to invest in as a host.
References:
https://www.airbnb.com/help/article/1857/airbnb-service-fees
