Does gross annual income include taxes or refundable deposits?

No. Amounts collected on behalf of others—like lodging/occupancy taxes and refundable security or damage deposits—are pass-throughs and are typically excluded from gross annual income.

Should I include cleaning fees in gross annual income?

Include cleaning fees only if you recognize them as your revenue (for example, when guests pay you and you pay cleaners separately). If cleaners are paid directly by the guest or platform, those amounts should not be counted as your revenue.

How is gross annual income different from NOI and Net Annual Income?

Gross annual income is revenue before deductions. Net Operating Income (NOI) subtracts operating expenses but excludes debt service and income taxes. Net Annual Income goes further, subtracting all expenses—including debt service—to show what you keep.

Cash basis or accrual—what should I use?

Be consistent with your accounting method. Cash basis recognizes revenue when cash is received; accrual recognizes revenue when the stay occurs. Many owners use accrual for performance metrics and cash for tax tracking.

Is Gross Booking Value (GBV) the same as gross annual income?

Not exactly. GBV often includes the guest’s full basket on the platform (rates, taxes, and fees). Gross annual income is your recognized revenue—usually excluding pass-through taxes and refundable deposits.

Gross Annual Income

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Definition: What Does Gross Annual Income Mean?

Gross annual income is the total amount earned in a calendar or fiscal year before any deductions. For vacation rentals and lodging, it captures all revenue recognized from booked stays and upsells—prior to subtracting platform commissions, operating expenses, debt service, or income taxes.

Think of it as the “top line” for the year. It’s the starting point for evaluating pricing performance, sizing a business, and preparing the numbers that flow into NOI, RevPAR, and other profitability metrics.

What Typically Counts—and What Doesn’t

Common inclusions: nightly rates; owner-retained cleaning, pet, hot-tub, or parking fees; add-on rentals (kayaks, bikes); early check-in/late checkout fees; experience upsells you deliver.
Common exclusions: pass-through lodging/occupancy taxes; refundable security/damage deposits; platform/merchant fees charged to the guest and remitted directly; owner advances and reimbursements.

How to Calculate (Single Property)

Sum all recognized revenue lines for the year, excluding pass-throughs and refunds.

Formula (conceptual): Gross Annual Income = (Nightly Rate Revenue + Owner-Retained Fees + Add-Ons + Other Earned Income) − (Refunds and Chargebacks)
Example: $62,400 rates + $3,600 fees + $2,000 add-ons − $0 refunds = $68,000

How to Calculate (Portfolio)

Roll up property-level totals from your PMS or accounting software. Reconcile against channel statements to ensure that what’s recognized as your revenue matches how fees and taxes were handled on each channel.

Pull annual revenue by property from your PMS.
Confirm handling of taxes and deposits per channel.
Remove pass-throughs; add owner-retained fees; net out refunds.

Why Gross Annual Income Matters

Pricing & performance: Track growth and seasonality alongside ADR, occupancy rate, and RevPAR.
Budgeting & planning: Establish revenue expectations for maintenance, CapEx, and marketing.
Financing: Lenders and investors often start with top-line revenue to assess scale before reviewing operating expenses and NOI.
Tax prep: It’s the gateway figure that eventually feeds into AGI and taxable income under your chosen accounting method.

Tips for Clean Reporting

Be consistent: Choose cash or accrual for management reporting and stick with it.
Segment revenue: Break out nightly rates vs. fees and add-ons to see what’s truly driving the top line.
Document pass-throughs: Track taxes and deposits separately so they never inflate your revenue.
Reconcile quarterly: Match PMS reports to bank deposits and channel statements to catch discrepancies early.

Examples

Individual lake home: $60,000 in rates + $5,000 in owner-retained fees (cleaning, pets) + $1,200 in gear rentals − $200 refunds → $66,000 gross annual income.
Boutique waterside inn: $520,000 in room revenue + $75,000 in packages/experiences − $5,000 refunds → $590,000 gross annual income.

Related Terms

Frequently Asked Questions

Do platform commissions reduce gross annual income?

No. Commissions and payment processing fees are expenses. Record them below the top line; they reduce NOI and net income, not gross annual income.

What about gift cards, credits, or vouchers?

Recognize revenue when earned under your accounting method. If a credit is applied to a stay, it reduces cash received but not necessarily revenue recognized.

How should I treat cancellations and refunds?

Reverse previously recognized revenue for cancelled stays and subtract refunds in the period they’re recognized. Keep a separate line for clarity.

If a platform collects and remits taxes, do I still track them?

Yes—track tax amounts for audit and reconciliation, but do not include them in your gross annual income if they were never your revenue.

What reports show gross annual income?

Use your PMS “Revenue by Month/Year” report and reconcile with channel statements and bank deposits. For portfolios, export per-property totals and roll up to a master sheet.

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