The short answer
You can pass the tax on, but Airbnb will not do it for you automatically. The Cayman Islands is not on Airbnb's list of places where it collects and remits occupancy tax, so nothing is added to a Cayman booking unless you add it.
- The tax is 13% of the room charge - nights × nightly rate - and the host (the proprietor) owes it to DoT.
- How you recover it from guests is a pricing decision. DoT's calculation does not change.
- Whatever you collect, you still file a return and pay by the 28th of the month after check-out.
The Tourist Accommodation Tax guide covers the tax itself. This article is about the guest-facing side.
Your options on Airbnb
Airbnb's manual tax collection help page lists three ways for a host to collect a tax Airbnb does not handle on a stay:
- Add taxes to the listing.
- Include taxes within a special offer.
- Collect from guests through the Resolution Center after check-in.
The same page says you must tell guests the exact tax amount before they book, and that Airbnb cannot help with manual collection. A fourth approach - the one many hosts use in practice - is to set a nightly price high enough to absorb the tax.
Asking for money through the Resolution Center after the guest has arrived is the weakest of these. It relies on the guest agreeing to pay a request after booking, and Airbnb's US pricing display page encourages hosts to include taxes Airbnb does not collect in the nightly price rather than charging them separately, for example at check-in. Most hosts will want option 1 or a tax-inclusive price.
Option 1: a tax line on the listing
Airbnb has a custom tax tool that adds a tax to the guest's price and pays it out to you separately. According to Airbnb's adding taxes to a home listing article, you set it up from the listing's Settings, under Taxes, where you:
- choose a tax type;
- choose how it is charged - a percentage per booking, a fee per guest, per night, or per guest per night;
- choose what a percentage tax applies to - for ordinary listings, the base price and, optionally, fees such as cleaning;
- enter your tax registration number, and say whether a long-term stay exemption applies.
For Cayman, the natural setting is 13%, percentage per booking, applied to the base price only. That mirrors DoT's calculation, so the amount the guest pays matches the amount you owe, booking by booking.
Points to know before you rely on it:
- It may not be offered for your listing. Airbnb's collecting taxes for bookings page says the feature is not available in all regions or cities. Check the Taxes section of your own listing; if the option is not there, use option 2.
- You attest to the amount. Airbnb asks you to confirm the tax is correct, to pay it once it reaches you, and to let Airbnb share tax and transaction information with tax authorities.
- Guests see a higher total. Airbnb notes that your total price increases when you add a tax. If you had already built the 13% into your nightly rate, lower the rate at the same time or guests pay it twice.
- Payouts arrive separately. Taxes added with the tool are paid out apart from the booking payout, and Airbnb says aggregated tax reporting appears in your Transaction History.
For a stay booked through an inquiry, a special offer can include the tax. Whichever route you use, state the 13% in the listing description too, so the guest knows the amount before booking.
Option 2: build it into the nightly price
The simplest method is to raise the nightly rate so the tax comes out of it. There is nothing to set up, and the price the guest sees in search is the price they pay.
The catch is what you write on the return. DoT works from the figures on your form: the room charge in column L and 13% of it in column M. If your nightly price already includes the tax, the room charge you report is the price without it - the price divided by 1.13 - so that column M equals the 13% you collected and DoT receives exactly its share. Writing the tax-inclusive price as the room rate would make you pay 13% on the tax as well.
For a host who wants $250 a night before tax:
| Nightly price to the guest | Room rate on the form (price ÷ 1.13) | Tax on the form (13%) |
|---|---|---|
| $282.50 | $250.00 | $32.50 |
Keep the arithmetic consistent: the same ÷ 1.13 on every stay, every month, and a note in your records of how the price was built.
The two approaches side by side
| Tax line on the listing | Tax inside the nightly price | |
|---|---|---|
| Setup | Listing settings; may not be available | None |
| Guest sees | A separate tax amount | One all-in price |
| Matches DoT's base | Yes, if applied to the base price only | Yes, if you report the price ÷ 1.13 |
| Money flow | Tax paid out separately | Mixed into the booking payout |
| Reconciling the return | Easy: collected = owed | You work out the tax yourself each month |
VRBO and direct bookings
VRBO's own lodging tax options (found under Property, then Taxes, in the Owner Dashboard) are offered only in listed eligible locations - currently parts of the United States, Canada, Greece and Amsterdam. The Cayman Islands is not on that list, so on VRBO most Cayman hosts build the 13% into the rate. Check your dashboard in case that changes.
For direct bookings you control the invoice: show the room charge, then the 13% tax as its own line, then any cleaning fee. That invoice also serves as the guest folio DoT asks for with each return.
The tax base stays the room charge
However you present it to guests, what you owe DoT is worked out the same way: 13% of the gross room charge, before your costs. DoT's guidance says the tax is calculated before you deduct cleaning, electricity, maintenance or agent fees, so Airbnb's host service fee does not reduce it. Work from the nightly price the guest paid, not your payout. A separately charged cleaning fee belongs in the guest's total bill on the form, not in the room charge - see what the 13% applies to.
Two consequences follow. Charging guests more than 13% does not let you keep the difference as "tax", and charging them less does not reduce what DoT is owed. And if a guest is exempt - a Caymanian or resident guest with proof - you owe nothing on that stay, so do not charge them the tax line either if you can avoid it.
Keeping records - and remembering it is not paid yet
Tax collected from a guest is money you are holding for DoT. It reaches DoT only when you file the return and pay - by the 28th of the month after the guests check out, or the working day before if the 28th is a weekend or public holiday. A late payment adds an automatic 20% surcharge, whatever you collected from the guest.
- Keep each reservation's price breakdown and Airbnb's earnings export for the month.
- If you use the tax tool, match the tax payouts in your Transaction History against the return.
- Consider moving the collected tax to a separate account as it arrives, so it is there on the 28th.
- Keep the return, the folios and proof of payment together - see how to file and pay.
- File a nil return for months with no check-outs.
Hosts.ky reads your Airbnb earnings export, takes the room charge for each stay, and fills in DoT's return with the 13% worked out - so you can check what you collected against what you owe before you pay.