In many jurisdictions, property managers must charge VAT — or an equivalent tax such as GST or sales tax — on the management fees, commissions, and billable expenses they pass on to owners. VRTrust supports this by letting you apply a tax rate on top of any fee, commission, or expense.
When a tax rate is applied, VRTrust automatically calculates the tax, includes it in the amount billed to the owner, and records it on the property manager's side of the ledger — so the manager can remit it to the relevant tax authority.
How tax on fees, commissions, and expenses works
Tax is set up once and then applied wherever you need it:
Create a tax rate once under Settings → Tax Rates.
Select that tax rate on an individual fee, commission, or expense.
VRTrust calculates the tax on top of the fee, commission, or expense amount, adds it to the owner's bill, and records it for the property manager to remit.
The same tax rate can be reused across as many fees, commissions, and expenses as you need. You can apply a tax rate in the following places:
Transaction | Where the tax rate is selected |
Management commissions | Advanced Settings on the commission template |
Booking channel fees | Advanced Settings on the fee template |
Merchant fees | Advanced Settings on the fee template |
Cleaning fees | Advanced Settings on the fee template |
Other fees | Advanced Settings on the fee template |
Expenses | The Amount field when adding or editing an expense |
Expense markups | The Markup Editor when adding or editing an expense |
Step 1: Set up your tax rate
Before you can apply tax to a fee, commission, or expense, the tax rate must exist.
From Settings, click Tax Rates to open the Tax Rates page.
Review the default tax rates. VRTrust inherits a default list based on the operating country you selected during onboarding.
To add a new rate, click +Add tax rate and enter a Tax name, Rate (%), Payable account, and Country.
Each tax rate is linked to a general ledger account that VRTrust uses to track the tax it calculates. You can override that account when creating or editing the rate.
For full detail on adding, editing, archiving, and accounting for tax rates, see Manage tax rates (VRTrust).
Apply tax to a fee or commission
A tax rate can be applied to any fee category — Management Commissions, Booking Channel Fees, Merchant Fees, Cleaning Fees, or Other Fees.
Go to the Fees & Commissions page.
Open the fee or commission you want to edit, or click Add to create a new one.
Open Advanced Settings.
Select the Tax Rate to apply.
Click Save.
VRTrust calculates the tax on the fee or commission amount and charges it on top. Use the Fee Preview to confirm the tax is calculating as expected before applying the fee to listings.
⚠️ Updating a fee will not recalculate tax on any reservation that already appears on a published owner or manager statement. Finalize tax settings before publishing statements.
Apply tax to an expense or markup
Tax can be applied to the base expense amount, to an expense markup, or to both.
Tax on the base expense
Go to Expenses and click Add expense, or open an existing expense.
Under Amount, enter the expense amount.
Click Select tax and choose a tax rate from the list.
Tax on a markup
Add one or more expense lines.
Under Markup, click the markup field to open the Markup Editor.
Enter the markup amount, then click Select tax and choose a tax rate.
Save the expense.
Where a jurisdiction requires tax on the full billable amount, VRTrust calculates it on the expense and markup combined.
Example: a $100 base expense with a $10 markup, taxed at 15%, produces $16.50 of tax ($110 × 15%) — a total of $126.50 charged to the owner. For more detail, see Add taxes to expenses and markups (VRTrust).
How the tax is calculated and billed
Tax is always calculated on top of the fee, commission, or expense — it is added to the amount, not carved out of it. The tax is included in the calculation and appears as a billable line, so it is clearly disclosed on the owner statement.
Worked example — a management commission with VAT:
Commissionable revenue: $1,000
Management commission (20%): $200
VAT on the commission (20%): $40
Total charged to the owner: $240
How the tax is recorded
For a fee or commission, VRTrust posts a journal entry that debits the expense account (tagged to the Owner) and credits the revenue account (tagged to the Manager). When a tax rate is applied, the tax follows the same direction:
The tax is billed to the owner, on top of the fee or commission.
The tax is recorded on the property manager's side of the ledger, to the account configured on the tax rate.
The property manager then remits the collected tax to the tax authority.
Tax on expenses and markups is treated the same way: billable to the owner, and recorded for the property manager. No new tax accounts are required — the account configured on the tax rate determines where the tax is tracked.
By default, system-calculated tax posts to the Expense Sales Tax account assignment (account 2410 in the default VRTrust chart of accounts). You can override the account on each tax rate. See Manage tax rates (VRTrust) for details.
Best practices
Use clear, descriptive tax names (e.g., VAT – UK 20%) so they are easy to identify when applying them.
Confirm the account linked to each tax rate aligns with your chart of accounts and reporting needs.
Use the Fee Preview to validate tax calculations before applying fees to listings or publishing owner statements.
Finalize tax settings before owner statements go into review or published status — changes will not recalculate on reservations already on a published statement.
Archive tax rates that are no longer in use rather than deleting them, to preserve historical accuracy.
For jurisdiction-specific VAT, GST, or sales tax treatment, always consult your accountant or tax advisor.
Related articles