Taxes can be confusing sometimes because certain channels treat them differently. This article shows how to set up your taxes according to the channel requirements.
Channels with taxes included
Most channels expect the rates to have taxes included, so we recommend that properties enter the rates to include the tax.
- Let's say you had a room that costs $100, and you have a 12.5% tax.
- We recommend the rate you would enter into myallocator would be $112.50 as shown below:
Channels that don't expect taxes included
For the few channels that expect rates without taxes (such as Orbitz), you can set a Base Rate Adjustment so that the rates have the tax percentage taken out.
As per the example above, since there is a 12.5% tax included in the rate, you would need to remove that percentage from the rate for these channels that don't expect the tax to be included.
To determine the percentage discount:
- Take the following formula to obtain the rate difference:
1 Divided by (1 + TAX Rate) = Rate Difference
- Determine the percentage:
1 Minus the Rate Differerence Times 100 = % Discount
Let's take the same example for the tax percentage of 12.5%:
- 1 / 1.125 = .88889 Rate difference
Next, to determine the percentage to discount:
- (1 - .88889) * 100 = 11.111 % Discount
Once you have determined the % discount, you can then apply it to the channel:
- Click on Manage.
- Select Setup Channels.
- Click on Setup Completed on the channel to update
- In the Base Rate Adjustment section, click on the drop-down menu.
- Update the Base Rate Adjustment to take out/reduce the tax percentage.
- Update the rate difference column with the given discount.
- Click Next.
- Go to Availability.
- Click on Full Refresh.
- You can choose to refresh all channels or select to refresh specific channels only. Click Start Refresh.