How much does a hotel stay really cost, occupancy tax included?
Hotel tax isn't sales tax — it's a separate 'occupancy tax' layered on top, averaging over 15% nationally.
The national average lodging tax is about 15.2% — nearly double a typical sales tax rate — plus a flat per-night fee averaging $2.74. Some cities layer a full sales tax AND an occupancy tax on the same bill (New York City runs roughly 14.75% combined, plus flat nightly fees), which is why a hotel bill often has more separate tax lines than any other purchase you make.
- Uses the national average combined lodging tax rate (15.22%) rather than a specific city or state — actual rates range from single digits to well over 20% depending on where you stay.
- Resort fees and other mandatory hotel amenity charges (common in destination markets) are a real additional cost not modeled here — they're a fee set by the property, not a tax.
The 15.2% lodging tax and $2.74 nightly fee are national averages. Lodging tax is set mostly at city level, so the real figure depends on the city rather than the state — New York City, Chicago and Houston all run well above this average.
The income tax in this figure is still computed from Texas and your filing status.
to cover a hotel stay
- Income tax (federal, FICA, state)30%$295
- Excise tax10%$100
- Hotel stay60%$600
- Income tax (federal, FICA, state)
- Excise tax
- Hotel stay
Data for nerdssources, confidence, assumptions
Where each number comes from
| Component | Amount | Confidence |
|---|---|---|
| Item price | $600.00 | Your figureHigh confidence. You supplied this, so it is exact by definition. |
| Excise tax | $99.54 | StatutoryHigh confidence. This number is the law — federal, FICA and state tax rates are published rates, so the only real risk is staleness. |
| Income tax to earn it | $294.83 | StatutoryHigh confidence. This number is the law — federal, FICA and state tax rates are published rates, so the only real risk is staleness. |
Jurisdiction applied
- State:
TX - Local income tax: none selected
Assumptions
- Uses the national average combined lodging tax rate (15.22%) rather than a specific city or state — actual rates range from single digits to well over 20% depending on where you stay.
- Resort fees and other mandatory hotel amenity charges (common in destination markets) are a real additional cost not modeled here — they're a fee set by the property, not a tax.
Sources
Year after year
$9,944 over 10 yrsHotel stay, once a year — $994 of income every year, and 28 hrs of your life.
Year by year
| Year | Spent | Invested instead |
|---|---|---|
| 1 | $700 | $700 |
| 2 | $1,399 | $1,448 |
| 3 | $2,099 | $2,249 |
| 4 | $2,798 | $3,106 |
| 5 | $3,498 | $4,023 |
| 6 | $4,197 | $5,004 |
| 7 | $4,897 | $6,054 |
| 8 | $5,596 | $7,177 |
| 9 | $6,296 | $8,379 |
| 10 | $6,995 | $9,665 |
Prices and wages are held at today's levels, and the return above is inflation-adjusted to match — consistent by design. The invested-instead line assumes the cash is contributed at the end of each year and left alone; it is an alternative use of the same money, never an extra cost on top.
Your position in the tax system
29.65% on the next dollarEvery extra dollar you earn is taxed at your marginal rate, not your average one — which is why a purchase costs more to fund than a paycheck stub suggests.
Marginal rates are read in gross-income terms: below the standard deduction an extra dollar of pay adds nothing to taxable income, so the true rate there is 0%, not the lowest bracket's. Excludes pre-tax deductions (401(k), HSA), which would lower all three.
Same purchase, different state
TX is #7 of 51Only income tax and sales tax move — the sticker price is held constant, so this is the part of the cost your address actually controls. Spread across all 51: $141, from Alaska to Oregon.
- $994
- Texasyou$994
- $1,136
Click a state name to compare against somewhere else.
Where every dollar goes
30% never reaches youThe $994.37 you must earn, followed to where it lands. Hover a band to isolate it.
- Federal income tax$218.76
- FICA (Social Security + Medicare)$76.07
- Hotel stay$600.00
- Excise tax$99.54
Each tax layer is the extra tax this purchase causes — that layer's tax at your income subtracted from its tax at your income plus the gross-up — so bracket boundaries the purchase straddles are handled correctly rather than smoothed over with an average rate.
Is a raise actually a raise?
you keep 70%A raise arrives on top of everything you already earn, so it is taxed at your marginal rate — not the average rate on your whole salary.
Federal, FICA, state and any local income tax — no pre-tax deductions, benefit changes, or payroll withholding quirks, all of which move the real figure. Moving into a higher bracket never taxes the income below the threshold: only the dollars above it pay the higher rate.