FlipStay blog · 21 October 2026 · updated 22 October 2026

Australian Motel Tax: 10% GST, Dining Splits, and Invoices

Master Australian GST for motels. Learn how to handle the 10% tax on room rates, manage dining splits, and issue compliant ATO tax invoices.

Running an independent motel in Australia means accounting for the 10% Goods and Services Tax (GST) across every booking, breakfast pack, and late cancellation. Small calculation errors or non-compliant receipts can trigger scrutiny from the Australian Taxation Office (ATO) and create unnecessary bookkeeping cleanups.

Here is how to manage the 10% GST rate, handle mixed dining supplies, and issue legally compliant guest tax invoices for your motel.

How GST applies to short-term accommodation

Under Australian tax law, motels qualify as commercial residential premises. If your annual turnover is $75,000 or more, you must register for GST and remit tax on your sales.

Short-term accommodation (stays under 28 continuous days) attracts the standard 10% GST rate. In Australia, prices displayed to consumers must be inclusive of GST. If you advertise a queen room for $165 per night on your direct booking page or roadside board, that price must already include the 10% tax.

To calculate the GST component from a tax-inclusive total, divide the gross amount by 11. For a $165 room charge:

• Total charge: $165.00
• GST component ($165 / 11): $15.00
• Net room revenue: $150.00

If a guest stays continuously for more than 27 days, special concessional rules may apply (either treating the supply as input taxed or charging GST on a reduced value). For standard leisure and business motel bookings, however, every room night is fully taxable at the standard 10% rate. Check with your accountant if you host long-stay contractors or seasonal workers beyond 27 consecutive nights.

Dining splits, breakfast packs, and minibar items

Many regional motels offer breakfast trays, chargeback arrangements with local pubs, or front-desk coffee. Australian GST treats food and beverage differently depending on whether it is prepared food or basic groceries.

Prepared dining and breakfast services

Cooked breakfasts, continental breakfast trays delivered to rooms, toasted sandwiches, and brewed coffees are prepared food. These items always attract standard 10% GST. It does not matter whether the guest eats in a breakfast room or in bed.

If you sell a room package advertised as "Bed and Breakfast for $195", the entire package is taxable at 10%. You do not need to split the GST rate between the room and the meal because both are taxable supplies. However, you should still separate the revenue lines in your internal daily books to track kitchen revenue versus room revenue.

Basic groceries vs. snack packs

Certain basic supermarket groceries are GST-free under Australian law. Examples include plain long-life milk, still bottled water with nothing added, and fresh whole fruit. If you purchase these in bulk to restock rooms, you do not pay GST on the purchase.

However, when you sell these items to guests as part of an accommodation service or through a minibar, the rules shift. Snack items (chips, chocolate bars, soft drinks, alcoholic beverages, and salted nuts) always attract 10% GST. If you assemble a minibar basket or charge guests separately for snacks at checkout, apply 10% GST to every sale.

Third-party restaurant chargebacks

If a local bistro bills dinner to a motel room folio, your property is acting as an intermediary. Ensure the bistro provides a valid tax invoice with their own Australian Business Number (ABN). When you post the charge to the guest folio, treat it as a taxable item or a direct disbursement, depending on how your merchant agreement is structured. If you only pass the charge on as an agent (a disbursement), the GST on the meal is the bistro's to account for and you claim no credit for it; if you buy the meal and resell it to the guest, you can claim the credit and must charge GST on the full amount you bill, with or without a markup. Consult your tax professional to confirm which applies.

ATO requirements for guest tax invoices

Issuing a simple card terminal slip is not sufficient for business travellers claiming work-related travel deductions. If a guest asks for a tax invoice, the ATO requires you to provide one within 28 days, unless the sale is $82.50 (including GST) or less, and business guests need one to claim GST credits on purchases over that amount.

For guest totals between $82.50 and $1,000, your tax invoice must clearly show:

1. That the document is intended to be a tax invoice (use the words "Tax Invoice" at the top).
2. Your motel's legal or registered business name.
3. Your Australian Business Number (ABN).
4. The date the invoice is issued.
5. A brief description of the items supplied, including the quantity (if applicable) and price (for example, "2 nights accommodation – Room 4" and "Cooked breakfast").
6. The total amount payable, including GST.
7. Either the explicit GST amount payable, or a clear statement that the total price includes GST (valid only if all items on the invoice are taxable at 10%).
8. The extent to which each item is a taxable sale (this matters when a bill mixes taxable and GST-free items).

For sales of $1,000 or more (such as corporate bookings, multi-room group stays, or extended family stays), the invoice must also show the buyer's identity or the buyer's ABN.

Modern cloud management tools simplify this process. In a property management system like FlipStay, the Australia setup treats your room rates as GST-inclusive, works out the 10% GST on room charges and extras, and prints "Tax Invoice" and your ABN on an itemised PDF at checkout. It has no field for a business guest's ABN, and stays of 28 days or more need adjusting by hand, so check those invoices with your accountant.

Worked billing example

Consider a corporate guest checking into Room 12 for two nights. During the stay, the guest orders one cooked breakfast and consumes two drinks from the minibar.

Here is how the charges and GST break down:

• Room charge: 2 nights at $154.00 per night = $308.00
• Breakfast: 1 hot breakfast delivered to room = $22.00
• Minibar: 1 craft beer ($9.00) + 1 bottled soda ($4.50) = $13.50
• Gross total billed to guest: $343.50

Because every line item in this stay is a taxable supply, you calculate the total GST liability using the one-eleventh rule:

$$\text{GST Amount} = \frac{\$343.50}{11} = \$31.23$$

$$\text{Net Revenue} = \$343.50 - \$31.23 = \$312.27$$

On the final tax invoice presented to the guest, the itemised lines appear with their GST-inclusive figures, followed by a tax summary box:

Item Description · Rate · Total (inc. GST)

Accommodation: 2 Nights (Room 12) · $154.00 · $308.00 Dining: Room Service Breakfast · $22.00 · $22.00 Minibar: 1 Beer, 1 Soda · Various · $13.50 Invoice Total · · $343.50 Includes GST of · · $31.23

This presentation gives business travellers the exact data needed for their corporate expense reporting and BAS filings.

Managing deposits and cancellations

When a guest pays a deposit for a future stay, you do not account for GST until you issue an invoice or receive the payment, depending on whether you report your Business Activity Statement (BAS) on a cash or accruals basis.

If you report on a cash basis, you record the GST in the reporting period in which you receive the funds. If you report on an accruals basis, you account for GST in the period you issue the invoice or receive payment, whichever happens first. These rules apply when the deposit is a part payment for the stay. If your booking terms make it a security deposit that the guest forfeits on cancelling, GST is generally accounted for only when you apply it to the bill or keep it after a cancellation, so check how your terms work with your accountant.

If a guest cancels outside the free cancellation window and you retain a cancellation fee, that fee is generally treated as consideration for a taxable supply (for example, your agreement to release the guest from the booking). You must remit 1/11th of that retained cancellation fee to the ATO. Ensure your billing software records retained fees under a taxable category.

If you want the GST on each bill worked out for you without paying subscription software overheads, you can create a free account on FlipStay's signup page and produce itemised PDF invoices at checkout directly from your browser. It records advances when the guest checks in, so keep deposits taken earlier, and any cancellation fees you retain, in your own books.

What to do this week

1. Verify your invoice template: Inspect the checkout receipt your front desk prints or emails. Confirm that your ABN is present, the words "Tax Invoice" appear at the top, and the GST amount is stated.
2. Review your minibar and dining rates: Ensure that all displayed dining prices, printed room service menus, and minibar menus state GST-inclusive totals.
3. Audit long-stay bookings: Identify any guests staying close to or past 27 continuous days, and review the applicable concessional GST rules with your bookkeeper or accountant.

Frequently asked questions

What happens to GST if a motel guest stays longer than 27 days?

A stay of 28 continuous days or more is long-term accommodation. If fewer than 70% of your stays are that long, you charge normal GST for the first 27 days and, from day 28, GST on 50% of the normal GST-inclusive price; only premises where at least 70% of stays are long-term can apply the reduced GST to the whole stay. You can instead choose to treat all your long-term stays as input taxed: no GST on them, and no GST credits on the related costs. Check with your accountant to choose the best method for your motel.

Can I add a credit card surcharge to a guest invoice, and does it attract GST?

Not on the cards most guests use. From 1 October 2026, businesses can no longer add a surcharge to Visa, Mastercard, eftpos or American Express payments, so build card costs into your room rates. Surcharges that do not depend on how the guest pays, such as a public holiday surcharge, are still allowed; they are part of the price of the stay, so they attract 10% GST. For example, a $1.10 surcharge includes 10 cents in GST.

Do I need the guest's business name and ABN on the invoice?

For invoices under $1,000, you only need to show your own motel name and ABN. If the total invoice value is $1,000 or more, ATO regulations require you to include the buyer's identity or their ABN for the document to be a valid tax invoice.

← All articles