How to Calculate Hotel Tax

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Traveling on the company dime can be confusing, especially when it comes to figuring out what the company will and will not reimburse. Some companies reimburse the hotel tax while you are on the road, but this becomes tricky when you travel during the peak season, the time of the year when hotels raise their prices to much higher levels to match the increased demand for rooms. There are ways to calculate the hotel tax, however.

  • Find your rates. At minimum, you need the total cost of the room, the maximum allowable room rate for the area and the cost of the room before taxes. If you have the hotel tax rate and the cost of tax per night, you can skip the next step.

  • Calculate the hotel tax rate. Subtract the cost of the room before taxes from the cost of the room after taxes. This is the tax per night. To get the hotel tax rate, a percentage, divide the tax per night by the cost of the room before taxes. Multiply the answer by 100 to get the rate. For example, the total cost of a night's stay is $134.50, with the room's pre-tax cost at $115. Your tax per night would be $19.50. To get the rate, divide 19.5 by 115, which equals .1696. Multiply by 100 to get the tax rate: 16.96 percent.

  • Calculate your reimbursable taxes. If you travel on company business, your employer may reimburse you for the tax paid each night at the hotel. If the price of your room is lower than the allowable rate, simply multiply the per night amount of taxes by the number of nights to get the total taxes paid. If the price of your room is higher than the allowable rate, you have more to do. Get the per night taxes paid by multiplying the tax rate by the allowable rate and then dividing by 100. Finally multiply this number by the number of nights stayed to get the total taxes paid that you can ask to be reimbursed. In the earlier example, the allowable rate at the room is $105. Multiply $105 by 16.96 to get 1708.8. Divide this by 100 to get $17.09, your reimbursable tax per night. Multiply it by the number of nights to get your total.

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